The right data turns CSRD reporting into competitive advantage

TEXT: TIMO MANSIKKA-AHO

At the start of the year, the new Corporate Sustainability Reporting Directive (CSRD) took effect in the EU, applying to large public-interest companies with more than 500 employees. At the beginning of 2025, the directive will apply to every company with more than 250 employees.

CSRD is not a merely nice addition to a responsibility program. It is an element in the company’s official financial statements, which means that instead of any marketing-oriented sugarcoating, it must be done precisely by the book.

Which again means that for those failing, serious sanctions await.

“Reporting directives and regulation are issues that are often viewed as necessary evils in companies”, Markus Päivinen, Country Manager, Finland, at Snowflake, the Data Cloud company, mentions. “Many take the easy way out instead of digging deep and looking for a proper way to deal with them.”

This is not to say companies wouldn’t take sustainability reporting seriously even now. However, the work is carried out mostly manually and without common guidelines. Putting the required data and key performance indicators together eats up resources, and even though there are software solutions and applications to support CSRD reporting, without sufficient data the way out remains difficult.

It takes a lot more than a simple investment in specific software to get sustainability reporting back on track. Markus Päivinen points out that while the goal looks the same, every company has its unique starting point.

“Making better use of existing data is the key, and that’s where the difference between companies lies. Background systems, procurement, processes, and maturities are just some examples of the numerous details that must be considered when pieces are put together. One size simply does not fit all.”

Integrating data sources to sustainability indicators

Sufficient responsibility reporting requires full visibility to the company’s entire value chain. For example, the emissions of a device that has been delivered to a customer must be followed throughout the product’s entire lifecycle. Companies must be a part of the ecosystem where their products and services are being used to be able to collect and utilize all the data that is required for adequate reporting.

Processing and reporting this data can be a complicated process, to which modern cloudbased data platforms can provide adequate help.

“An appropriate cloud-based data platform helps putting together core data for reporting purposes in near real-time by combining the company’s own data with data produced by third parties as well as commercial data providers”, Markus Päivinen explains. “Especially in heavily regulated industries such as finance, certain standards and authorities allow the use of industry-specific data that is available in digital marketplaces.”

Combining data from various sources into one place enables creating key performance indicators for sustainability, which serves the entire industry. This helps organizations include these indicators in their business processes, which again leads to possible competitive advantages and benefits.

Not to mention smoothly fulfilling the upcoming CSRD requirements, but it does not have to stop even there. Doing CSRD properly also improves organization’s maturity towards data-driven decision-making which provides additional boost to overall reputation. This helps gain trust among investors, customers, and other stakeholders. | snowflake.com