The upcoming sustainability reporting directive (CSRD) from the EU has become part of Danish law and will impose significant demands on Danish companies. The earlier your organisation starts preparing for reporting, the more successful the process will be. Nevertheless, our experiences show that many midsize companies postpone their reporting preparations until the last minute because they are unaware of the workload required to meet the requirements.
To help you avoid the risks of late reporting, this article outlines a plan for how to start preparing for CSRD reporting now – even if you don’t yet feel like an expert.
Reporting is mandatory
As a mid-sized company (accounting class C) you must report on your 2025 ESG data from 2026. This means that the required data from 2025 must ideally be collected throughout 2025 rather than scrambled together end of the year, just before the deadline for writing the annual report.
The least prepared companies postpone their reporting work the most
Unfortunately for many companies, we see that the ones that are most unaware of the high workload involved in reporting on the CSRD wait the longest to get started on their preparation work. This is the case for many Danish midsized companies, and it means that the most delayed companies, being ill prepared, will have to struggle under tight deadlines to get an overview of their reporting requirements, missing data, and how to collect it. In the worst-case scenario, a delayed preparation process will mean that reporting requirements will not be met to a satisfactory degree. Instead, your company will want to get started as soon as possible to divide the workload over a longer period of time and comfortably reach you reporting deadline.
Delayed companies will face the greatest risk of negative consequences
The spike in workload just before the deadline will have the greatest negative impact for the companies which are most ill-prepared and currently have little overview or plan of their reporting process, since they do not have the overview of capacities to handle the sudden increase in workload required for reporting. In comparison, more well-prepared companies will be able to mitigate these effects to a higher degree.
To avoid delaying your reporting work, what are the key preparations you should begin today?
To achieve compliance by the deadline, your organisation should have three things in place before your reporting year (2025):
1) An overview of your material topics identified through a double materiality assessment (mandatory)
2) An overview of your data gaps
3) A plan for closing your data gaps and how to anchor this process in your organisation
These three key steps can take longer than expected. In total, they can take up to six months to complete and should be achieved before your reporting year, preferably as early as possible.
How do you start working on your key preparations?
1) Conduct your double materiality assessment to get a clear overview of your company’s material impacts, risks, and opportunities. You could do this on your own by following the guidelines in the ESRS, but outside advice may aid you in identifying the right material topics.
2) Conduct your data gap assessment to get an overview of the information your company shall disclose and what data you are currently missing to be ready for reporting.
3) Build your implementation plan for data collection to get a structured approach to closing your data gaps before the deadline and prioritise which disclosure requirements your company will report upon based on the relevant phase-in periods. In addition, you should consider who should be responsible for the required data in different parts of your organisation.
With these three activities, you are a big step closer to reaching your first ESRS-aligned annual report.
If you have any questions on how to get started, do not hesitate to reach out for a chat!
Author details
Minna Shukri
Senior Consultant
Viktor Moe
Consultant
