CSRD Is Not a Reporting Exercise. It Is a Data Infrastructure Problem.
The Corporate Sustainability Reporting Directive became law in 2023. Large EU companies began reporting in 2025 (for FY2024). Listed SMEs and non-EU companies with significant EU turnover are next in the wave.
Most companies approaching CSRD compliance for the first time make the same mistake: they treat it as a disclosure writing exercise. They hire consultants to produce narrative text about sustainability strategy, policies, and targets.
Then they discover that ESRS requires over 1,000 data points — quantitative indicators, cross-references, policy attestations, and verified metrics spanning 10 topical standards. And none of that data is sitting in a spreadsheet.
CSRD compliance is a data infrastructure challenge. Solving it requires the same engineering discipline you would apply to any complex data integration project.
The ESRS Standards: What You Are Actually Reporting
ESRS (European Sustainability Reporting Standards) are organized into two categories:
Cross-Cutting Standards (mandatory for all)
- ESRS 1: General Requirements — reporting principles, materiality, value chain coverage
- ESRS 2: General Disclosures — governance, strategy, materiality process, risk management, targets and metrics
Topical Standards (mandatory if material)
- ESRS E1: Climate change — GHG emissions (Scope 1, 2, 3), energy consumption, climate targets, transition plan
- ESRS E2: Pollution — air, water, soil pollutants, substances of concern
- ESRS E3: Water and marine resources
- ESRS E4: Biodiversity and ecosystems
- ESRS E5: Resource use and circular economy
- ESRS S1: Own workforce — working conditions, equal treatment, health and safety
- ESRS S2: Workers in the value chain
- ESRS S3: Affected communities
- ESRS S4: Consumers and end-users
- ESRS G1: Business conduct — anti-corruption, supplier relationships, political engagement
Which topical standards apply to you depends on your double materiality assessment.
Step 1: Double Materiality Assessment
Double materiality is the conceptual foundation of CSRD. It requires you to assess sustainability topics from two angles:
Impact Materiality: What are your company's actual and potential impacts on people and the environment? Both positive and negative, across your own operations and value chain. This is assessed by magnitude, scope, and likelihood of harm.
Financial Materiality: What sustainability topics create material financial risks or opportunities for your business? Climate physical risk, transition risk, regulatory exposure, reputational risk, resource scarcity — all of which affect your financial position.
A topic is material if it is material from either angle (hence "double"). Your double materiality assessment determines which ESRS topical standards you must report against.
How we run it:
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Longlist of topics: We start with the full ESRS topic list (based on EFRAG's implementation guidance) as the universe of potential material topics.
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Stakeholder input: We identify relevant stakeholders (investors, employees, customers, suppliers, civil society) and gather input through surveys, interviews, or existing stakeholder engagement data.
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Impact assessment: For each topic on the longlist, we assess actual and potential impacts — severity, scale, likelihood, and reversibility. We use your existing ESG data, industry benchmarks, and operational data to inform this.
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Financial materiality assessment: For each topic, we assess financial risk and opportunity through scenario analysis, regulatory horizon scanning, and cost modeling.
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Materiality matrix and narrative: We produce the documented materiality assessment with justification for in-scope and out-of-scope topics — required by ESRS 2 DR IRO-1.
Step 2: ESRS Gap Analysis
Once materiality is established, we map your current data state against ESRS data requirements for each material topic.
For each required ESRS disclosure, we assess:
- Data exists: You have it, it is just not organized for ESRS output
- Data gap: The data is available in source systems but not being collected
- Structural gap: You lack the policy, process, or metric entirely and need to build it
- Value chain gap: The data lives with suppliers, customers, or partners and requires engagement programs to collect
A typical ESRS gap analysis produces a prioritized roadmap: what to build first (highest materiality, largest gaps), what to automate (recurring data pulls), and what requires human process (governance attestations, policy documentation).
Step 3: Data Automation and Infrastructure
The gap analysis converts directly into an engineering project. For each data gap, we identify the source system, build the integration, and route data into your ESRS reporting structure.
Climate data (ESRS E1): See our ESG Data Pipeline solution for the full technical picture. Scope 1, 2, and 3 are automated from source systems.
Workforce data (ESRS S1): HR system integrations for headcount, gender breakdown, pay gap metrics, training hours, health and safety incident rates. Most of this data exists in Workday, BambooHR, or your HRIS — it just needs to be extracted and formatted for ESRS.
Governance data (ESRS G1): Board composition, anti-corruption training completion, whistleblower case tracking, supplier code of conduct coverage. These often require new process instrumentation — workflows that capture the data as governance activities happen.
Value chain data (ESRS E2-E5, S2-S3): This is the hardest category. Pollution, water, biodiversity, and value chain worker data often require new data collection from suppliers and partners. We build supplier data request workflows and intake portals to systematize this.
Step 4: EU Taxonomy Alignment
If your company has EU financing or is subject to EU financial market regulations, you may also need to report against the EU Taxonomy for Sustainable Activities — separate from but complementary to CSRD.
The EU Taxonomy requires you to:
- Identify your turnover, capex, and opex attributable to Taxonomy-listed economic activities
- Assess Technical Screening Criteria (TSC) for each activity — does it substantially contribute to one of six environmental objectives?
- Assess Do No Significant Harm (DNSH) criteria for all other objectives
- Confirm minimum social safeguards compliance
We build the EU Taxonomy assessment and reporting process as a structured data workflow:
- Map your revenue lines and capex/opex to NACE codes and Taxonomy activities
- Apply TSC assessments with documented evidence (energy performance certificates, emission intensity ratios, etc.)
- Produce the Taxonomy-aligned KPI tables required by SFDR and CSRD
Step 5: Assurance Readiness
CSRD requires limited assurance from an independent auditor for the first reporting years, moving toward reasonable assurance over time. Assurance readiness means:
- Documented methodology: Every metric has a defined calculation methodology with source references
- Data lineage: Every number traces back to a source record
- Controls evidence: Policies, approvals, and review processes are documented and evidenced
- Restatement capability: If a prior year number needs to change, you can restate it with a clear explanation
Our pipeline builds audit trail as a first-class output, not an afterthought. Auditors can trace any ESRS data point to its source in minutes, not weeks.
Implementation Timeline
Week 1: Double Materiality and Gap Analysis Materiality workshop, topic scoring, gap assessment, roadmap prioritization.
Week 2: Data Infrastructure and Integrations Build source system integrations, calculation engines, and data collection workflows for material topics.
Week 3: Disclosure Assembly and Assurance Prep Map data to ESRS disclosure structure, draft narrative disclosures, document methodology, prepare audit trail package.
Related Reading
- ESG Data Pipeline: Technical Infrastructure for CSRD
- Scope 3 Emissions: The Hardest Part of ESRS E1
- GRI vs. CSRD vs. TCFD: Framework Comparison
- ESG Reporting Automation: Complete Guide
- SOC2 + ESG: Running Compliance Programs in Parallel
Get Your CSRD Gap Analysis
The first question most companies need answered: where are we vs. where we need to be? We run a structured gap analysis against ESRS requirements based on your likely materiality profile and current data state.
No commitment required. Just a clear picture of what you are facing.