PwC Survey: Companies Optimistic on Business Upsides from EU Sustainability Rules Despite Big Implementation Challenges

Companies are anticipating business upsides as they prepare to comply with the European Union's Corporate Sustainability Reporting Directive (CSRD), even as they grapple with major operational hurdles, according to a new global survey by PwC.

The PwC Global CSRD Survey 2024 found that around three-quarters of companies say they are factoring sustainability into business decisions to a greater extent, or plan to do so, as they get ready to follow the CSRD's detailed disclosure requirements.

The survey respondents identified multiple potential benefits from CSRD implementation, including better environmental performance, improved stakeholder engagement, risk mitigation, competitive advantage, and more effective corporate governance. Notably, around one-third expect it to lead directly to revenue growth and cost savings.

The findings suggest many companies see the sustainability reporting rules as more than just a compliance exercise. As they dig into the granular disclosure topics spanning environmental, social and governance issues, some appear to be uncovering new insights about sustainability-related risks and opportunities.

However, the survey also highlighted major challenges companies face in operationalizing the CSRD requirements. Over 60% of respondents cited data availability and quality as the biggest obstacle to implementation. Around half flagged the complexity of tracking data across their value chains as a significant hurdle.

The CSRD, which takes effect in 2025 for many large EU companies, mandates disclosure of sustainability performance and risk data across topics like climate change, pollution, biodiversity and workers' rights. It is underpinned by 12 new European Sustainability Reporting Standards.

While most respondents have engaged assurance providers for the required auditing of their CSRD disclosures, only around 60% have so far involved their technology teams. This potentially lags best practice, as investments in data management systems are seen as critical for efficient reporting over the long-term. The survey findings suggest many companies are still in relatively early stages of scoping out their CSRD programs and understanding the full operational impacts across their organizations.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.