8 Effective Steps to Preparing a CSRD-Compliant Sustainability Report 

The Corporate Sustainability Reporting Directive (CSRD) is transforming how companies disclose their ESG (Environmental, Social, and Governance) data. Replacing the Non-Financial Reporting Directive (NFRD), the CSRD expands disclosure obligations, ensuring companies provide comprehensive, standardised, and verifiable ESG reports. 

For businesses operating in or engaging with the EU market, CSRD compliance is mandatory. It enhances transparency, enables investors and stakeholders to assess sustainability risks, and aligns with the broader goals of the European Green Deal and the EU Taxonomy. 

But how do you prepare a CSRD-compliant sustainability report? This guide provides a step-by-step breakdown to help organisations navigate CSRD reporting requirements efficiently. 

8 Actionable Steps to Prepare an Effective CSRD-Compliant Sustainability Report 

Step 1: Determine if Your Organisation Falls Under CSRD Requirements 

Under CSRD reporting requirements, the directive applies to: 

• Large companies meeting two of these three criteria: 

• €40 million+ net turnover 

• €20 million+ total assets 

• 250+ employees 

• Non-EU companies generating €150 million+ in the EU and having at least one EU subsidiary or branch. 

If your company is subject to CSRD compliance, it’s essential to align your sustainability reporting with the European Sustainability Reporting Standards (ESRS). 

For a deeper understanding of compliance rules, read our guide on CSRD Compliance for Manufacturers and ESG Data Management. 

Step 2: Understand the European Sustainability Reporting Standards (ESRS) 

The ESRS framework is at the core of CSRD reporting. It requires companies to disclose data on double materiality, including: 

• General standards – Applicable to all companies (ESRS 1 & 2) 

• Environmental – Climate, biodiversity, pollution, water, and circular economy (ESRS E1–E5) 

• Social – Workforce, communities, consumers, and human rights (ESRS S1–S4) 

• Governance – Business conduct, anti-corruption, risk management (ESRS G1) 

To streamline your ESG data collection and reporting, consider using an ESG reporting software like Mavarick, which automates data tracking and improves accuracy. Explore our guide on CSRD software features to learn more about choosing the right tools. 

Step 3: Conduct a Double Materiality Assessment 

CSRD introduces double materiality, meaning companies must report on: 

• Financial Materiality – How sustainability factors impact the company’s financial health. 

• Impact Materiality – How the company affects people, society, and the environment. 

This assessment helps businesses identify which ESG topics are most relevant to their operations. 

Check out our blog on Double Materiality: Transforming ESG Reporting for a step-by-step process. 

Step 4: Collect and Verify ESG Data 

Accurate ESG data management is crucial for CSRD reporting. Companies must: 

• Collect data on energy usage, emissions, water consumption, waste, employee diversity, and governance policies. 

• Ensure data is complete, verifiable, and auditable. 

• Use ESG software for automating data collection and reducing errors. 

Poor ESG data management can derail CSRD compliance. Learn how automation can improve ESG reporting in our blog How to Automate ESG Data Collection and Reporting. 

Step 5: Align with Regulatory and Industry Frameworks 

To ensure CSRD compliance, align your reporting with global frameworks such as: 

• Global Reporting Initiative (GRI) 

• Task Force on Climate-Related Financial Disclosures (TCFD) 

• Science-Based Targets Initiative (SBTi) 

• EU Taxonomy for Sustainable Activities 

For a detailed breakdown, check our blog on Everything You Need to Know About ESG and Its Impact on Carbon Reporting. 

Step 6: Implement a Robust ESG Data Management System 

Companies should establish a structured ESG reporting framework that includes: 

Defining Key Performance Indicators (KPIs) aligned with CSRD and ESRS  

• Ensuring internal processes for data validation and auditability  

• Integrating ESG reporting into corporate governance  

Regularly training internal teams on evolving CSRD requirements   

• Defining Key Performance Indicators (KPIs) aligned with CSRD and ESRS  

• Ensuring internal processes for data validation and auditability  

• Integrating ESG reporting into corporate governance  

• Regularly training internal teams on evolving CSRD requirements   

For effective ESG tracking, consider automating your ESG reporting. Read about Why Science-Based Targets Are More Than Just Numbers. 

Step 7: Prepare and Publish Your CSRD-Compliant Report 

Your CSRD sustainability report must include: 

• Management’s ESG Strategy and Governance Structure  

• Double Materiality Findings and Risk Analysis  

• Environmental and Social Performance Data (Scope 1, 2, and 3 Emissions, Energy Use, Diversity, and Inclusion, etc.)  

• Alignment with ESRS, GRI, and TCFD Frameworks   

• Future Sustainability Goals and Impact Metrics 

CSRD requires digital reporting in XHTML format, ensuring machine readability for AI-driven regulatory analysis. For best practices in structured reporting, visit Data Quality in Carbon Accounting. 

Step 8: Third-Party Assurance and External Validation 

CSRD mandates third-party audits for ESG disclosures. Companies must: 

• Engage independent ESG auditors to verify sustainability data  

• Ensure compliance with EU Audit Directives  

• Strengthen internal ESG governance for transparency    

For a deeper look into validating supply chain sustainability data, check out our blog on Supply Chain Emissions and Carbon Accounting Software. 

Final Thoughts: Why Early CSRD Compliance Matters? 

With CSRD reporting deadlines approaching, businesses must act proactively to meet compliance requirements. The best way forward is to: 

• Automate ESG data collection  

• Align with ESRS and global frameworks  

• Conduct materiality assessments  

• Adopt a structured ESG reporting approach  

• Invest in ESG software for accuracy and efficiency   

Want to simplify your CSRD compliance journey? Contact Mavarick today to see how automating ESG reporting can make compliance seamless and hassle-free! 

Frequently Asked Questions (FAQs)

1. Who needs to comply with CSRD reporting requirements?

The Corporate Sustainability Reporting Directive (CSRD) applies to companies that meet two or more of the following: a net turnover exceeding €40 million, a balance sheet total over €20 million, or at least 250 employees. Listed companies, large LLPs, and certain non-EU businesses operating in the EU must also comply.

2. What are the key sustainability reporting standards under CSRD?

CSRD follows the European Sustainability Reporting Standards (ESRS), covering environmental, social, and governance factors. These standards ensure that companies disclose their climate impact, social responsibility efforts, and ethical business practices.

3. What is a double materiality assessment in CSRD reporting?

Double materiality requires businesses to report on both financial materiality, which assesses how sustainability affects financial performance, and impact materiality, which measures how business operations affect the environment and society. This ensures transparency on both financial and non-financial risks.

4. How can companies ensure accurate and reliable ESG data for CSRD compliance?

Companies should use ESG reporting software to automate data collection, validate emissions data, and align with international frameworks like GRI and TCFD. Accurate reporting also requires proper data governance, supplier engagement, and third-party verification.

5. Do CSRD reports require external assurance?

Yes, unlike the previous Non-Financial Reporting Directive (NFRD), CSRD mandates independent external assurance to verify the accuracy and consistency of sustainability data. This step enhances the credibility of ESG disclosures and aligns them with financial reporting requirements.