Research on the EU’s Corporate Sustainability Reporting Directive (CSRD), a law that came into effect on January 1, 2024, requiring companies to report on their environmental and social impacts, has shown that nearly half of businesses are at risk of non-compliance.
While 87% of companies have begun collecting data for their initial CSRD report, 47% have yet to conduct a critical “double materiality” assessment—a key component for compliance determining the scope of the organisation’s sustainability reporting.
The study, conducted by sustainability data management platform Sweep in collaboration with global consultancy Capgemini Invent, surveyed 500 sustainability leaders across the US, UK, Germany, and France to explore the role of data in sustainability strategies.
Under the CSRD, more than 50,000 businesses in the EU and beyond must evaluate the environmental and social impact of their operations alongside financial performance. However, gaps in data collection and inadequate tools are leaving many organisations vulnerable to non-compliance risks.
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The report also highlighted “frustration” among sustainability leaders regarding data management. Nearly half (47%) expressed challenges in handling large volumes of sustainability data, with 44% managing emissions data from more than ten sources. A third (33%) spend over six hours weekly consolidating this information.
For those not yet preparing for the CSRD, 41% cited a lack of a “whole business” approach as a barrier, 40% blamed the complexity of data manipulation, and 36% pointed to conflicting sustainability guidelines and frameworks. According to the research, spreadsheets remain the most commonly used tool for data tracking (78%), compared to 73% adoption of dedicated software solutions.
“Legislation such as the CSRD is crucial because it offers a framework for building a business that is truly sustainable—environmentally and economically,” added Delacour. “For those who go beyond viewing this as a compliance exercise, the CSRD presents an opportunity to optimise operations, reduce costs, secure investment, and drive positive business transformation.”
“This study shows just how far many organisations still have to go,” said Rachel Delacour, co-founder and CEO of Sweep. “Too many businesses risk setting off on the wrong foot in their CSRD journey, which could lead to non-compliance, significant fines, and reputational damage.”
