Corporate sustainability reporting directive services for financial services

What EY can do for you

The Corporate Sustainability Reporting Directive (CSRD) came into effect on 5 January 2023. It will be phased in and will first apply to large European Union (EU) public interest entities. Then it will be gradually phased to also apply to non-EU entities with substantial operations in the EU.

The directive requires these organizations to disclose detailed information on “double materiality”: their impact on people and the planet, and the associated sustainability risks and opportunities to their business.

Compliance reporting deadlines are staggered as follows:

• Report from 2025 for fiscal years starting on or after 1 January 2024
• Large EU undertakings and non-EU large companies: Report from 2026 for fiscal years starting on or after 1 January 2025
• Listed SMEs¹ (excluding micro-enterprises), small and non-complex credit institutions, and captive insurance undertakings: Report from 2027 for fiscal years starting on or after 1 January 2026
• Non-EU undertakings with significant EU activity²: Report from 2029 for fiscal years starting on or after 1 January 2028

Entities under the CSRD will have to prepare a report in accordance with the European Sustainability Reporting Standards (ESRS), which cover a range of sustainability topics across environmental, social and governance (ESG) themes. The disclosure of material environmental, social and governance topics that will be disclosed is based on a double materiality assessment.

Organizations need to act now to meet upcoming reporting deadlines.

How EY can help

Our deep knowledge of the sustainability reporting landscape helps us to advise and support financial services organizations in every facet of CSRD compliance. Recognized by Verdantix, we rank as a leader in ESG consulting services in 2022 and 2023.

We take a three-step approach to CSRD compliance:

1. Prepare: Organizations first need to determine whether they are within the CSRD’s scope, identify what’s required and develop a strategy to meet the reporting requirements. This includes:
   • Assessing and designing a reporting strategy, governance and organizational structure.
   • Developing a materiality framework and conducting an assessment.
   • Mapping reporting requirements and performing a gap assessment.
   • Defining data points and requirements.
      
2. Transform: Organizations often need to evolve their approach to data collection, governance and reporting to achieve compliance. This includes:
   • Evaluating, designing and applying a data collection framework.
   • Implementing and enhancing control and governance frameworks.
   • Reviewing current organizational and IT infrastructure before modelling and implementing a transformation strategy.
   • Developing an internal reporting framework, KPIs and analytics.
      
3. Assure: It is essential for organizations to assess process and reporting maturity, including data lineage, controls and transparency to alignment with assurance standards.
   • All sustainability disclosures under CSRD are subject to limited assurance from the first year of reporting, with a view to moving to reasonable assurance in the coming years.

EY offers a range of assets and tools to help financial services organizations comply with CSRD, including a financed emissions calculator and the EY ESG Suite reporting tool.