Start your ESG strategy in a targeted way with the Sustainability Reporting Manager

Sustainability Reporting Manager: from chaos to a clear overview

We see it happening before our eyes: clients working hard on their CSRD implementation but quickly losing the overview in the process. How far have we come? And what still needs to be done to become compliant?

The Sustainability Reporting Manager offers a solution. This also becomes apparent in daily practice. Our first conversation with the CFO of a Dutch multinational about CSRD and compliance gets bogged down in a discussion about details. A second conversation, six months later, is completed well before the agreed time. No discussion on details, but consensus on the current state of affairs and a sense of urgency as a result.

At once, it is clear that there needs to be an overarching action plan for CSRD implementation. For this the entire organisation needs to be mobilised. How to explain this difference? We conduct the second conversation based on the insights from the Sustainability Reporting Manager developed by PwC Netherlands.

The reason: bridging the gap and facilitating the conversation

It is downright difficult for companies to get a good view of their current level of compliance. What the CSRD requires from companies is comprehensive, complex, detailed and new; those who go into depth quickly lose sight of the bigger picture. This is true even for specialists who work on the subject on a daily basis. Moreover, experience shows that companies tend to overestimate their level of CRSD compliance, even the frontrunners in this field who have been working on it seriously for some time.

The Sustainability Reporting Manager makes it possible to bring together detailed information in the various sub-areas while maintaining an overview. In doing so, we help build a bridge between specialists in the various fields and managers. Even better, this enables an organisation to sharpen its ESG strategy and make it future-proof, in line with what the CSRD requires.

The Sustainability Reporting Manager thus enables organisations to steer on the major ESG lines and to allocate priorities and resources to solve specific hurdles. Sharper strategic insights thus help achieve better reporting. With the Sustainability Reporting Manager, we can help you have the dialogue needed for this: by translating detailed data into insight, and by mobilising different stakeholders and facilitating the conversation between them.

The preliminary work: a gap analysis, looking at thousands of data points

Starting point for using the Sustainability Reporting Manager is a gap analysis that determines, for each of the 'disclosure requirements' from the CSRD, what is required for compliance and what is currently already available. Depending on the client's preferences and information needs, the analysis can be carried out at an outline or detailed level. Key sources include the company's annual report, strategic plan, policy documents and action plans, possibly supplemented by follow-up questions and interviews with employees.

This process usually takes 6 to 12 weeks, but can sometimes be done in much less time, even in a few days. Indeed, after the recent update of the CSRD, not every ESRS is still material to every company a priori, but only those standards for which the company itself determines so after a 'double materiality assessment'.

From details to insight: compliance and 'efforts to close'

The next step is to determine the type of each gap identified. We then link to each type the expected effort required to close the gap (the 'effort to close').

There are four types of gaps:

Data gap: No data is available and no process exists to collect that data. Effort to close: 'Highest'
Policy gap: There is no policy, objective and/or action plan established in relation to a 'disclosure requirement'. Effort to close: 'High'
Calculation gap: The input is available for a particular data point but the right calculation method is not yet in place. Effort to close: 'Medium'
Textual gap: Data is available internally but not yet reported externally. Effort to close: 'Low'

Based on this input, the Sustainability Reporting Manager generates an overall view of the current level of compliance.

At a glance, you can see what the 'overall compliance' is (42% in this example) and what the partial score is for the various material standards. For each standard, it also shows the expected 'effort to close'. The tool shows that a high compliance score of 78% on G1 can still mean a large effort is needed to become fully compliant.

For each standard, the Sustainability Reporting Manager also allows zooming in on the different components of the ESRS . The tool shows how the identified gaps are divided over the various disclosure requirements per standard and over the previously mentioned gap types.

On the basis of these distributions, the conversation about the necessary follow-up steps, their prioritisation and required resources can be conducted effectively.

"The Sustainability Reporting Manager enables organisations to focus on the major ESG lines and allocate priorities and resources to solve specific hurdles."

Lex Huis in het Veld, director

Next steps: accessibility and functionality of the tool

The Sustainability Reporting Manager has been developed in a way that all PwC professionals can use it in their daily work. The first next step is to make the tool accessible to clients online. We are also working on extending the tool with a roadmap functionality that will visualize how the CSRD will increase over time as a result of various 'efforts to close'. An addition to the tool showing an 'organisational gap analysis' is also possible. With this, we visualize the maturity of the reporting organisation and identify where further improvements are needed regarding CSRD compliance.