The (overly) ambitious promise
of many CSRD tools

CSRD tools play a crucial role in complying with CSRD requirements. They assist in collecting and managing relevant ESG data. In many cases they also promise that organizations can fully meet their reporting obligations with these tools. However, in practice, such promise often proves to be overly ambitious. In this article, I explain why, provide tips for CSRD professionals, and show how tools can be effectively used to meet reporting obligations.

CSRD reporting: more than just data

Many CSRD professionals are familiar with the content requirements of a CSRD report, such as capturing ESG data points through a double materiality analysis (DMA). However, the requirements for the structure and digital format of these reports are discussed less often, even though they are equally essential for legal compliance.

The structure

A sustainability report is not a standalone document but part of the management report within an organization’s complete annual report. Many CSRD tools suggest they can generate a complete CSRD report with a single click. However, this information must still be integrated into the annual report, which includes both financial and non-financial data. A key question for CSRD professionals to consider is: Is my tool equipped to meet these complex requirements?


The digital format

CSRD information must be published digitally and tagged using iXBRL. This format makes reports readable for both humans and computers. Although iXBRL has been announced as the mandatory format, the final CSRD taxonomy in ESEF is still unavailable. Some tools already claim to provide iXBRL output, but this raises questions given the lack of an officially approved format. Additionally, do these tools generate iXBRL only for the CSRD section of the annual report or for the entire annual report?


Tips for CSRD professionals

  1. Be critical of promises
    Question vendors thoroughly. If a tool claims to meet all reporting obligations, it must not only generate data but also integrate it into the full annual report and produce valid iXBRL.

     

  2. Learn from experience
    Publicly listed companies have experience with iXBRL due to the ESEF reporting requirement. The Dutch Authority for Financial Markets (AFM) recommends working with HTML-based documents instead of PDFs, as they are more efficient and less prone to errors.

     

  3. Collaborate with finance and communications teams
    Finance professionals are already dealing with mandatory financial XBRL tags, while communications teams prioritize corporate identity and multichannel publication (PDF, websites, etc.). An effective reporting solution must address these needs as well.

The solution: a digital reporting platform

If CSRD tools and financial tools fall short, a digital reporting platform is the answer. These platforms combine data and content from various sources, support collaboration, integrate XBRL tags from different taxonomies (both financial and non-financial), and offer publication options in multiple formats (iXBRL, PDF, website). This ensures organizations meet all regulatory requirements while addressing the needs of CSRD professionals and other departments.

A digital reporting platform is the key to an efficient, future-proof approach to CSRD reporting.

Is your annual reporting ready for the future?

As regulations become increasingly stringent, and stakeholder expectations rise, annual financial and non-financial reporting will grow more complex. Fortunately, innovative software solutions are emerging to transform reporting into a positive experience for your team and stakeholders.

With the right Digital-First tools, you can seamlessly integrate ESEF and CSRD compliant XBRL tags and publish your reports in multiple appealing formats, including mandatory iXBRL, PDF, dynamic websites, or InDesign. This ensures compliance while enhancing corporate communication.

Learn more about how F19 can empower your organization to create the annual report of the future using our cloud-based, Digital-First reporting platform.

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info@f19.nl

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