It’s not always easy to understand what software can actually help with versus what it cannot. How do you then know whether to use software for your CSRD reporting? 

Recall that the CSRD (Corporate Sustainability Reporting Directive) defines who needs to report when, and the ESRS (European Sustainability Reporting Standards) defines what specifically to report on. There's no shortage of acronyms in the ESG (Environmental, Social, and Governance) space, after all!

Here we cover:
1) What parts of your ESRS reporting that software can help with
2) Pros and cons of doing all the reporting yourself or using consultants or software
3) What to look for in a software solution for ESG reporting

Let's dig in! 

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1) What parts of your ESRS reporting can software help with?

We'll look at this question for each step of your reporting process for the ESRS.

Run double materiality assessment

Software can:
• Provide a template
• Guide you through with workflows
• Decode difficult EU legal text into straightforward explanations

What you will still do:
• Involve stakeholders
• Conduct outside research
• Make final materiality decisions

Create a plan with targets, actions, and policies

Software can:
• Guide you through the process, so you don’t have to figure out how to do it
• Automatically extrapolate targets in time and for different granularities using bottom-up or top-down references
• Link actions to specific targets
• Assign actions to owners
• Use AI to summarize your existing policies for your report

What you will still do:
• Decide on the exact targets and actions
• Decide who in the organization should be responsible for each
action
• Upload your existing policies

Collect and organize data

Software can:
• Guide you to determine which data is needed
• Link reporting indicators to relevant targets, actions, and topics
• Automatically retrieve data from existing systems through integrations
• Track changes and documentation to ensure the data is auditable
• Automatically aggregate data across business units for the company and group level
• Run built-in calculations

What you will still do:
• Choose which internal systems to integrate with
• Upload documentation

Track progress on metrics and actions

Software can:
• Get visual overviews of progress as tables, charts, and other
diagrams
• Assess progress per indicator, per business unit, or at the
company level
• Track progress both on the reporting process and on the
sustainability targets
• Remind owners to follow up on their assigned actions

What you will still do:
• Click to remind owners to follow up on actions
• Discuss progress in team meetings in your company
• Adjust your action plan as needed

Report

Software can:
• Automatically create a compliant report in Word and PDF format
• Add XBRL tagging, which gives interoperability for the reporting
data with other systems

What you will still do:
• Click to export the report
• Format the report in accordance with your own brand

If you want to dig deeper into the reporting steps for the CSRD, read about our tested and proven 20 concrete tasks for a successful CSRD report.

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2) Pros and cons of do-it-yourself, consultants, and software

To prepare your CSRD report, you have four alternatives:

• Do everything yourself with the help of your colleagues, spreadsheets, Word documents, and existing tools
• Get help from a consultancy to guide you through the process
• Get help from software to navigate the process, collect and organize data, get overviews of the reporting process and sustainability goals, and generate the report
• Use both software and a consultancy.

Let's walk through them in turn.

a) Do everything yourself

This means relying fully on your colleagues, spreadsheets, Word documents, existing tools, and your own time.

It lets you reduce spend on external services and build up in-house expertise. However, it's an incredibly time-consuming way to build up that expertise. It also entails a huge amount of tedious, manual work, and risks non-compliance. This means we can't recommend this option to any company, whether big or small.

b) Get help from a consultancy (and don’t use software)

Consultants provide handholding through the entire process to ensure compliance. It often includes help to run internal processes with consultant project managers.

This option does not, however, solve the underlying data management challenges for sustainability. Nor is it a long-term solution for internal collaboration, and the total bill is usually larger than it is for option c or d.

Still, this option could be right for corporations if the total cost is not an issue and resources are allocated to build and maintain custom systems, as well as monitoring and implementing regulatory changes continuously.

c) Get help from software (and don’t use a consultancy)

Software also guides you through the process to finished report and helps you ensure compliance. This option still includes human support from dedicated Customer Success managers, onboarding, and on-demand advisory sessions.

It also ensures your data is organized, auditable, easy to track, and can be reused for future reporting. Something called XBRL tagging is required for all CSRD reports, and software can do this automatically. Further, it simplifies internal collaboration with assignment of tasks and progress overviews. These factors make it a cost-effective, long-term solution.

This option does not handle your internal stakeholder management. It also requires a subscription (which is more external spend than option a, and lower than option b).

It's the recommended option for companies that want to ensure compliance and have someone internally who can take lead on the reporting.

d) Use both software and a consultancy

There are benefits of both option b and option c, so why not combine them?

One might (incorrectly) think that using both software and consultants is the most expensive. However, this option is actually cheaper than using purely consultants. That's because software automates a lot of the otherwise manual work, so you lower the one-off cost on consultancy hours.

At the same time, you still get the benefits of support with this option. If you want to ensure compliance and need help with internal project management to drive the reporting process, then this is the recommend option.

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3) What to look for in a software solution for ESRS reporting?

If you do proceed with a software solution to ensure CSRD compliance, you want to pick the right one for your needs.

For reporting in accordance with the ESRS, we particularly recommend assessing these factors:

User-friendliness

You will need to collaborate with many colleagues on the CSRD report. For example, you will want to assign tasks to others. It’s much easier to collaborate with them if they are happy to use the software solution you’ve chosen. This means the software must be easy to learn and easy to use.

Comprehensiveness

The new EU sustainability directives keep changing and contain hundreds of pages of legal text. You want to be sure that the software solution is fully up-to-date and contains all pieces of the regulation. This ensures that if you use the software for your report, you know you’re compliant.

Modern API

When it comes to sustainability reporting, you will inevitably rely on data from many different systems. That’s why the ideal software solution for CSRD reporting must have a modern API and be easy to integrate with your existing systems. This also lets you evolve a modern tech stack with specialized solutions, so you get best-of-breed solutions for your different use cases.

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Want to learn more about successful CSRD compliance and sustainability strategy?

👇 Check out our Ultimate Guide to the CSRD linked below 👇