Lessons learned from the first reports: CSRD isn’t a burden, it is a roadmap

The length of the first CSRD reports speaks for itself: the average is 120 pages. Most reports were prepared in an integrated form, as part of the annual report – as required by the regulations. The length and complexity of the documents indicate that preparing for the CSRD isn’t just a reporting project, but a far-reaching organisational and strategic task.

Strategic integration: there is an ESG team, but where is the connection?

The spirit of CSRD is that, sustainability isn’t a separate module, but part of business strategy – but practice often shows otherwise. According to the benchmark, 88% of firms have an ESG team or a person responsible for ESG, and 75% have also formulated a sustainability strategy. However, only 56% have incorporated sustainability KPIs into their incentive systems, meaning that the link between strategic goals and operational activities is often missing. The proportions are similar at Hungarian companies, but the depth of integration often lags behind international examples. Climate change exposure is featured in almost every report, but in many cases only the first steps have been taken.

Navigating between reporting standards

Although the ESRS has become the new baseline standard for reporting, a significant proportion of companies are also using other frameworks for a transitional period: 59% of reports referred to the TCFD, 36% to the GRI, 24% to the SASB and a few to the IFRS Sustainability Disclosure standard. These temporarily structure how companies are thinking, but in the longer term the use of sector-specific ESRSs will become inevitable. The problem is that these aren’t yet available, so firms need to develop their own interpretation frameworks. CSRD reporting is based on the principle of double materiality: companies must show how sustainability affects them (external risks) and how they themselves affect society and the environment.

Reporting and reputation – the business value of ESG

Experts agreed that CSRD reporting isn’t only an obligation but also an opportunity. Companies that are already in the so-called “Wave 1” could gain a competitive advantage. The learning process, the development of data systems, reporting practices and communication with stakeholders are skills that not only lead to compliance, but also to strategic advantages. Reporting obligations are therefore not an end in themselves, but can also be a tool for building brand reputation and strengthening consumer and business trust. ESG transparency has become a competitive factor, as a well-structured, clearly communicated report can even directly support sales or partnership goals.