Chart a path to climate leadership through CSRD compliance

The Corporate Sustainability Reporting Directive (CSRD) and its accompanying European Sustainability Reporting Standards (ESRS) raise the bar for global sustainability reporting. While its disclosure requirements across a range of environmental, social and governance (ESG) matters are regarded as best practices, they also introduce unprecedented complexity — particularly when it comes to climate change.  

On February 26, 2025, the European Commission released proposed changes through the omnibus legislative package, simplifying the requirements of the CSRD. These proposed changes will be submitted to the European Parliament and Council for review and potential adoption. Though the scope of the CSRD may change, the principles give businesses a valuable opportunity to align with the global climate agenda, build transparency into operations and garner trust from stakeholders and customers alike. 

As with any compliance shift, early insight and planning will make the difference between businesses who flounder and those who thrive. With a clear formula and expert support, firms can use the directive to become an industry leader. Start mapping a productive way forward with the following insights from our eBook, A Formula for CSRD Success. 

FOR MORE CONTEXT

Raising the stakes of climate inaction 

As average temperatures hit new highs, climate action has become an urgent priority around the globe. The CSRD reflects this urgency — as well as evolving customer priorities. Its rigorous climate change disclosure standards (ESRS E1 Climate Change) signify a deliberate step in the fight for a greener future that’s achieved through careful and thorough measurement. They demand full insight into value chains and detailed planning to reduce greenhouse gas emissions, all with the aim of helping companies make measurable progress in decarbonization. 

Under the ESRS, climate change impacts are subject to double materiality. As with the CSRD’s other sustainability matters, companies have to prepare detailed assessments of their impact and financial materiality. This extends to dependencies on natural and social resources, revenue streams and other impacts, risks and opportunities (IROs). 

Organizations must also develop a step-by-step climate transition plan on how they will measure emissions, develop reduction targets, implement a decarbonization strategy and continually track progress. Investors, regulators and customers increasingly demand transparency from companies regarding their transition plans. Failing to present a clear strategy could result in significant backlash and damage to their reputation.  

Preparing a report on material issues in accordance with the topic-specific ESRS requirements is the final step for companies working toward CSRD compliance. It’s an extensive process, with many potential roadblocks lurking along the way, especially in the climate category.

HOW IT’S CONDUCTED

Facing a new set of reporting challenges 

While the CSRD seeks to reshape how companies disclose their environmental and social impacts, it also adds many new complex tasks to busy teams’ workloads. All double materiality assessment (DMA) results are subject to third-party audits. All reporting must comply with the European Single Electronic Format (ESEF).  

Without early research, preparation and outside support, businesses often run into the following challenges: 

• Data quality and accessibility: The entire process, from DMAs to the ultimate CSRD report, is founded upon high-quality data addressing supply chain impacts, emissions and financial details. This necessitates a systematic approach to collecting, verifying and analyzing these metrics across complex value chains. However, businesses often struggle with limited data availability, scattered data across different platforms — and the balance between quantitative and qualitative assessments. 

• Digital transformation demands: The CSRD requires that businesses submit reports in an electronic, machine-readable format. The technical complexities involved in XHTML reporting and XBRL tagging are immense. And when businesses rely on non-reporting software or forms-based approaches, they can’t guarantee that their reports will be completely compliant, accurate and consistent. 

• Departmental silos: Reporting on diverse environmental and social impacts calls for collaboration with departments across an organization. Breaking down departmental silos can be a significant challenge for many companies, especially without the technology to facilitate easy data sharing and communication. 

• Experience and resource gaps: Finally, limited time, personnel and other internal resources can make gauging and reducing a company’s climate impact a major struggle. And when a team lacks sustainability expertise, they may be uncertain as to how to approach double materiality assessments and other CSRD requirements. 

Though meeting CSRD requirements seems daunting, it gets easier and more efficient when businesses lean on trusted expertise, processes and technology to smooth the road forward and produce actionable insights. 

WHAT YOU NEED TO DO

Defining a clear roadmap for success 

CSRD compliance is not just a reporting burden; it’s a necessity for strengthening business resilience against climate crises and thriving in increasingly sustainability-conscious markets. By leveraging a structured approach and experienced collaborators, organizations can streamline disclosures while surfacing operational efficiencies and reaching their sustainability targets faster.  

Expert consulting support gives teams access to a scalable, standardized process for meeting each CSRD requirement and managing complex data. Consultants bring efficiency and accuracy to the whole process, developing roadmaps to meet targets for material topics, preparing and interpreting data points and highlighting areas for performance improvements.    

Sphera Sustainability Consultants bring over 30 years of experience and extensive expertise to support companies with their specific CSRD and sustainability needs. From double materiality assessments to climate transition planning and reporting, Sphera’s consulting services leverage sector-specific insights to give different functions clarity on their own contributions toward sustainability goals. What’s more, the SpheraCloud Corporate Sustainability Software provides the unified platform organizations need to centralize value chain data, manage emissions hotspots, ease reporting  and lead the way to a greener tomorrow. 

KEY TAKEAWAYS