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Nordea recently gathered sustainability and audit experts from EY, PwC, Deloitte and KPMG for a panel discussion on CSRD reporting, sharing lessons from 2025 and practical advice for what comes next.
A lot is happening in the field of sustainability reporting right now. During a webinar on 16 September, experts from the four major audit firms gathered to discuss the Corporate Sustainability Reporting Directive (CSRD) in practice, from the foundations of materiality assessment to lessons learned from 2025 reporting and what lies ahead.
One of the key challenges in the double materiality assessment (DMA) has been centered around boundary-setting: where does a value chain begin and end, at what level should materiality be assessed, and what should be the threshold for materiality? As the answer will depend heavily on the type of company, transparency on where the boundary is set is highly important. These areas are expected to be more clear in the revised ESRS, where more guidance is provided.
A key lesson from 2025 is that many companies struggled to maintain a red thread throughout the report, connecting the DMA to policy, actions, targets and metrics. The more specific the DMA, based on individual impacts, risks and opportunities, the easier it is to connect these areas. The experts also caution against overengineering. Even though quantifications are encouraged, the DMA is ultimately a qualitative assessment, and an overly mechanical approach risks producing a result that does not reflect reality. In addition, the company should always strive to connect the financial materiality assessment to the company’s ERM (enterprise risk management).
How well prepared companies were for 2025 reporting differs primarily based on the company size and prior experience with sustainability reporting, rather than industry sector. Those who have long worked in a structured way with sustainability, and who early on involved the finance department, management and the board, found the process considerably easier.
A recurring challenge is internal control: Many companies have yet to build the same control structure for sustainability data as for financial data, despite the fact that the same legal requirements now apply.
Many companies have yet to build the same control structure for sustainability data as for financial data, despite the fact that the same legal requirements now apply.
This summer, the European Commission launched updated standards, ESRS 2.0, including a reduction of mandatory data points by more than 60 percent. The experts emphasised this is about improved design and fewer duplications, not a reduction in the substance of what needs to be reported. The ambition remains. Concrete simplifications include a top-down approach in the DMA, not having to include acquisitions in year one, and a new concept – fair presentation – which encourages companies to ask whether the report gives a true and fair view.
The panel advised companies to start by deciding which standard to apply for the next reporting year. Many companies are expected to use 2026 as a transitional year with the existing standards, before a full transition in 2027. Additionally, the experts advised to begin work on improving data quality, particularly for climate and Scope 3, as soon as possible.
The overarching message from the panel: make sure your sustainability report represents your company’s business model and the actual material sustainability areas over time, be transparent but don’t overengineer it.
The Corporate Sustainability Reporting Directive is a European Union law that requires large companies and listed companies to publish regular reports on the social and environmental risks they face, and how their activities impact people and the environment. Companies subject to the CSRD have to report according to the European Sustainability Reporting Standards (ESRS).
The law requires a “double materiality assessment,” where companies report on:
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