Summary of the CSRD directive
- The implementation of the CSRD Directive is forcing companies to rethink the management of their sensitive data. They need to collect and present reliable, verifiable ESG data. In this context, data security and ESG data optimization become the keys to effective and compliant reporting.
- The requirements of the CSRD directive go beyond mere regulatory compliance, to become a lever for performance and resilience for companies that fully embrace these sustainability challenges.
Coming into force on January 1, 2024, the Corporate Sustainability Reporting Directive (CSRD) (EU) 2022/2464 transforms the European non-financial reporting landscape. It introduces unprecedented requirements for the communication of environmental, social and governance (ESG) data. The companies concerned must now manage a considerable volume of sensitive information, such as environmental indicators, social data and strategic information.
And for the first time, this data will be subject to mandatory verification by a statutory auditor (CAC) or an independent third-party body, on the model of the certification of financial information. In order to meet this audit obligation, companies are required to secure their ESG data and put in place internal processes enabling them to collect and present reliable, verifiable information.
CSRD Directive: a turning point for ESG reporting
Adopted in December 2022, the European CSRD directive replaces the Non-Financial Reporting Directive (NFRD), whose scope it extends. The number of companies covered by sustainability reporting obligations rises from 11,700 to almost 50,000. This directive helps to reinforce the European Union’s objectives in terms of corporate transparency.
The CSRD imposes stricter and more standardized disclosure requirements than the previous directive. Its aim is to harmonize companies’ sustainability reporting and improve the availability and quality of published ESG data. It responds to the information needs of financial players, who are themselves subject to ESG reporting obligations.
The CSRD introduces ESRS (European Sustainability Reporting Standards). Drawn up by the European Financial Reporting Advisory Group (EFRAG), these technical standards number 12.
- ESRS 1 and 2: mandatory transversal standards.
- ESRS E1 to E5: environmental standards (climate, pollution, water, biodiversity, circular economy).
- ESRS S1 to S4: social standards (working conditions, value chain, communities, consumers).
- ESRS G1: governance standards.
The implementation of the CSRD directive represents a turning point for companies. They are now required to integrate sustainability issues at the heart of their strategy, and to make extra-financial reporting a strategic steering tool.
The CSRD is being applied progressively, following a staggered timetable based on companies’ headcount (number of employees), sales and balance sheet total. Large companies (over 250 employees, sales in excess of 50 million euros or balance sheet total in excess of 25 million euros) are already subject to the directive. They were required to publish their first sustainability report in 2025, based on data collected for the 2024 financial year.
The challenges of collecting and managing ESG data
With almost 1,200 indicators referenced in the CSRD, data collection is particularly complex due to the typology and volume of data to be collected: environmental data, social data and governance data.
The CSRD also introduces the concept of “double materiality”.
- Impact materiality: assesses how the company affects the environment and society.
- Financial materiality: assesses how ESG issues impact the company’s economic performance.
This dual materiality analysis amplifies the scale of the data collection challenges, since each issue identified triggers specific data collection obligations based on the corresponding ESRS standards. The more material issues a company identifies, the greater the volume of heterogeneous data from multiple sources it will need to collect and manage.
The data collection imposed by the CSRD directive involves numerous stakeholders, both internal and external: multiple company departments (HR, purchasing, quality, etc.), subsidiaries, suppliers and subcontractors, etc. This data collection entails various types of risk: errors, inconsistencies between different sources, leakage of sensitive data (personal, strategic, etc.), regulatory non-compliance, etc.
Securing sensitive data and making data collection more reliable: requirements and best practices
The CSRD directive requires companies’ sustainability reporting to be subject to mandatory verification by a CAC or an independent third-party organization (ITO). This audit and independent assurance obligation is designed to ensure that ESG data published by companies is verified by qualified third parties, along the lines of the certification of financial information. This represents a major break with the NFRD, as ESG reporting is now treated with the same level of rigor as financial reporting.
Collecting ESG data involves handling particularly sensitive information: social data, data on working conditions, health and safety at work, employee training, strategic information, and so on. All this data requires enhanced protection.
To meet data security requirements, companies need to implement robust technical and organizational measures to secure their information flows. These include strict management of data access controls, traceability of access and modifications, and protection of sensitive data (classification of data according to sensitivity, encryption, backup and recovery procedures, etc.). Adapted management tools facilitate this work.
ESG data quality control and auditability procedures guarantee data quality and reliability, notably by documenting the various stages in the collection and processing of sustainability information.
Optimizing the management of sensitive data, the key to reliable and efficient reporting
Determining which data is essential to an organization’s CSR objectives is a prerequisite for accurate and relevant ESG data collection. This mapping process, which includes both the identification and classification of data, must differentiate between :
- Existing data, available in current systems,
- Data to be completed, which are partially available and need to be enriched,
- New data, to be collected specifically for the CSRD.
The CSRD encourages the digitization of data collection and reporting processes. Relevant data is easier to collect, organize and distribute. Automation solutions make it possible to connect to existing information systems and tools, collect data in real time and generate reports in a variety of formats.
ESG platforms or data management solutions enable data to be collected, stored, measured, structured, formatted, governed and published, while ensuring data conformity and quality. The data collection work imposed by the CSRD directive is demanding and delicate.
Finally, collecting and managing ESG data is an iterative exercise. Companies will have to publish sustainability reports every year. It will therefore be necessary for them to carry out an in-depth analysis once, and then to monitor and update the data regularly. These steps are essential to guarantee the freshness and relevance of the data.
| Checklist: actions to implement to secure and optimize ESG Data Management under the CSRD Directive Preparation Phase – Conduct an audit of existing ESG data – Map data flows and identify sources – Define roles and responsibilities for each stakeholder – Establish ESG data governance Technical Security – Implement granular access controls – Encrypt sensitive data in transit and at rest – Back up data and test recovery procedures Data Quality – Define automated validation rules – Set up reconciliation procedures – Train teams on data collection methodologies – Schedule periodic checks Compliance and Audit – Document data collection and processing procedures – Implement an audit trail – Prepare supporting evidence for external audits – Test exports in required formats – Schedule review by the statutory auditor |
The benefits of optimized, secure ESG data management
One of the major objectives of CSRD is to improve the reliability of published information. Organizations that succeed in optimizing the management of their sensitive data and strengthening data security will respect official methodologies and ensure compliance. Their data will be documented, traceable and secure.
Being able to rely on quality ESG data improves strategic decision-making. Management can rely on reliable indicators to monitor performance. This improves risk identification and resource optimization.
Reliable, transparent ESG data also tends to boost stakeholder confidence: better response to investor criteria, improved ratings and competitive differentiation.
Finally, from a brand image point of view, companies that publish their ESG indicators often enjoy a better reputation with customers, investors and talent. It’s even a competitive advantage.
