15 Tips for Sustainable CSRD Compliance
- How to Ensure Consistent CSRD Compliance and Avoid Penalties
- CSRD Compliance Can Be Complex. But Help is a Click Away
The EU’s Corporate Sustainability Reporting Directive (CSRD) is a significant regulatory change affecting thousands of companies across Europe and beyond. Despite its complexity, CSRD also presents an opportunity for decision-makers to invest in their most valuable asset: their people.
Historically, the EU has been strict about regulatory compliance. Under the region’s General Data Protection Regulation (GDPR), large corporations had to pay hefty fines — Meta (€1.2 billion in 2023) and Amazon (€746 million in 2021). The CSRD will impose similar penalties for non-compliance, up to €10 million or 5% of annual revenue.
How to Ensure Consistent CSRD Compliance and Avoid Penalties
CSRD compliance is not a set-it-and-forget-it exercise. It requires early preparation and long-term attention.
Here are 15 people, processes, and technology tips to get you started.
1. Rethink your data collection strategy
Data is the foundation of CSRD reporting. CSRD requires organizations under its purview to collect and report 47 people-centric metrics. Here are some tips to improve your data collection process:
Tip 1: Invest in active listening:
Ensure you have access to the latest and most accurate data from internal and external sources. For example, you can use surveys, interviews, audits, or third-party assessments to collect relevant insights from stakeholders that matter in CSRD reporting, such as your workforce.
Tip 2: Don’t forget passive listening:
Automating data collection can save time, resources, and errors. This means continuous data collection on CSRD topics like diversity, equity, and inclusion (DEI) without the active involvement of your workforce. Logging these insights gives HR teams and stakeholders a real-time snapshot of overall workforce dynamics. Accurate snapshots allow HR teams to identify and prevent issues early. Passive data collection is not just a reporting mandate but a critical driver of building an influential culture rooted in CSRD guidelines.
Tip 3: Implement a regular data audit schedule:
Data quality is essential for CSRD reporting. You must verify, validate, and clean your data regularly to ensure its accuracy, completeness, and consistency. This can be done by bringing in external auditors to check your data for errors, gaps, or anomalies. Alternatively, this process can be simplified by using people analytics tools that accurately track and reconcile data for completeness and accuracy.
2. Revamp reporting workflows for continuous evolution
CSRD reporting is here to stay. It will require constant monitoring, evaluation, and improvement. Here are some tips to refine your reporting processes:
Tip 4: Invest in CSRD-specific reporting tools:
These tools can help you streamline data management, analysis, and visualization. They can also help generate reports that comply with CSRD standards. Choose solutions that integrate seamlessly with your existing HR data stack.
Tip 5: Streamline reporting process for efficiency:
Simplify your reporting workflows to reduce costs, risks, and delays. One way to achieve this is by using pre-built templates and checklists to standardize formats and content. Modern people analytics tools offer this capability out of the box.
Please find out how people analytics can accelerate your CSRD readiness on our blog.
Tip 6: Set up a feedback loop for process and tool improvements:
By involving your reporting team and stakeholders in surveys, interviews, and focus groups, it becomes easier to identify areas of improvement and implement changes to empower your reporting team. People analytics solutions with customization capabilities also help build reports that are easier to build and consume.
3. Build a knowledge-based compliance culture
CSRD compliance is not only a technical issue but also a cultural one. Getting buy-in across the organization and enabling collaboration between relevant departments in CSRD performance and reporting is vital. Here are some tips to invest in a culture of compliance through education:
Tip 7: Provide ongoing training on CSRD reporting standards:
Training can help raise awareness and understanding of CSRD reporting among your employees. It can also help you build skills and competencies to effectively collect, analyze, and report CSRD data. A central source of information about CSRD concepts, indicators, and best practices can speed up understanding and compliance across the workforce.
Tip 8: Improve training and education mechanisms through feedback loops:
CSRD reporting is a new frontier for those developing training programs and those attending them. One way to ensure your programs achieve the desired result is to collect and analyze feedback from your trainees. Integrating quizzes, tests, or surveys with the training materials is an excellent way to measure your trainees’ learning outcomes and satisfaction.
Tip 9: Encourage teams to stay updated on changes:
CSRD regulations and reporting requirements will evolve, as with any regulatory mechanism. Key stakeholders need to monitor changes in reporting requirements and communicate them clearly to the affected teams.
4. Track industry updates on CSRD
Regulations, market forces, and stakeholder expectations influence CSRD reporting. It is necessary to stay informed about the changes in the external environment that affect your CSRD performance and reporting. Here are some tips to keep on top of changes:
Tip 10: Establish and circulate a reliable source for CSRD regulatory updates:
Your team needs a single source of truth about the latest updates on CSRD regulations across different regions, sectors, and topics. To get information about the latest developments directly from an official source, visit this website.
Tip 11: Regularly review best practices:
Industry benchmarks will influence your CSRD issues and culture. Reviewing and comparing CSRD performance and reporting with peers and competitors is essential. Learn from their successes and challenges and adopt their best practices to improve your CSRD performance and reporting.
Tip 12: Join relevant industry networks:
The pooled knowledge of these communities will be helpful. Besides information, they provide guidance, support, and advocacy for any issues in the reporting process. Joining and participating in these networks and contributing your learning from the compliance process can enrich the discourse about CSRD.
5. Invest early in technology that enables consistent compliance
CSRD reporting is not just a human endeavor. Technology promises to play a central role in reporting and long-term compliance.
Tip 13: Explore state-of-the-art people analytics solutions for simplified compliance:
People analytics solutions can help you leverage data and analytics to improve your CSRD performance and reporting. They can help you collect, integrate, analyze, and visualize your people’s data quickly and accurately. People analytics solutions that integrate with existing data can quickly generate insights and recommendations about your people’s practices. A few areas where people analytics solutions deliver excellent results are data integration, dashboarding, benchmarking, predictive analytics, or prescriptive analytics for your CSRD reporting and compliance.
Tip 14: Utilize data collection and analysis technology:
It is essential to eliminate reporting errors arising from manual data collection and analysis mistakes. A robust data stack can do this, improving the speed, quality, and reliability of your data collection. AI capable of natural language processing (NLP) can also speed up the analysis of textual or verbal sources, such as feedback collected from training programs and reporting teams.
Tip 15: Ensure your people analytics stack adapts to CSRD requirements:
Choosing a solution built for CSRD can streamline reporting from the HR perspective. Pre-built and customizable dashboards that adhere to CSRD standards make reporting more straightforward for everyone involved.
CSRD Compliance Can Be Complex. But Help is a Click Away.
CSRD compliance requires a systematic and holistic approach that involves data collection, reporting, analysis, improvement, and communication. These 15 tips simplify CSRD compliance and achieve improved sustainability outcomes for your organization and its stakeholders.
Simplify CSRD compliance and allow your teams to focus on business-critical tasks with SplashHR. Our CSRD-ready dashboards are easy to set up and enable HR professionals to track and report the 47 HR metrics mandated by CSRD quickly and reliably. SplashHR’s robust tracking and visualization provide live workforce health info, helping you go beyond CSRD compliance and make better people decisions.
About the Author
HCM Solutions Director
Brianne Minnich, with 8 years of global HR experience, developed a keen interest in the data driving operations, particularly around Talent Intelligence. Recently joining SplashBI as their HCM Solutions Director, Brianne bridges her HR background with her passion for data. Her roles include educating HR professionals, boosting enthusiasm for HR Analytics, and amplifying businesses’ insights into their internal and external people analytics.