Preparing an organization for CSRD reporting means conducting a double materiality assessment, identifying which European Sustainability Reporting Standards (ESRS) apply to your business, building data collection processes across relevant ESG topics, and embedding sustainability reporting into your governance structure. It’s a significant undertaking, but a manageable one with the right approach. This article addresses the key questions organizations face when getting CSRD-ready, from what the directive actually demands to who should be involved when decisions get made.
What does CSRD reporting actually require from an organization?
CSRD reporting requires organizations to disclose detailed information on their sustainability-related risks, opportunities, and impacts across environmental, social, and governance topics, following the European Sustainability Reporting Standards (ESRS). Unlike previous non-financial reporting requirements, CSRD demands structured, auditable disclosures rather than voluntary narrative statements.
The ESRS cover a wide range of topics, including climate change, biodiversity, water use, workers’ rights, and business ethics. Companies subject to the directive must report on these areas at the level of detail the standards prescribe, and their sustainability statements must be included in the management report, making them part of the official financial reporting package.
One important development: as of 2026, the scope of CSRD has changed significantly. Under Directive (EU) 2026/470 (Omnibus I), the directive now applies only to companies with more than 1,000 employees and more than 450 million euros in net turnover. The previous thresholds (250 employees, 50 million euros in revenue, or 25 million euros in total assets) no longer apply. This means roughly 80% of companies that were previously in scope have been removed from the mandatory reporting obligation. If your organization was preparing under the old thresholds, it is worth revisiting whether you are still required to report.
For companies that do remain in scope, the revised ESRS adopted by the European Commission on 3 July 2026 reduce the number of mandatory data points by over 60%, with the total number of data points dropping by more than 70%. Reporting costs are expected to fall by over 30% per company as a result. That said, the standards remain detailed and demanding, and the first step for any in-scope organization is understanding which sustainability topics they must actually report on — and that begins with a double materiality assessment.
How do you conduct a double materiality assessment for CSRD?
A double materiality assessment for CSRD involves evaluating sustainability topics from two angles: their financial impact on your organization (financial materiality) and your organization’s impact on people and the environment (impact materiality). A topic is considered material if it is significant from either perspective, and material topics must be reported on under the relevant ESRS.
The process typically unfolds in several stages:
- Map your value chain: Before you can assess what matters, you need to understand where your business operates, who your suppliers are, and where your products or services end up. Double materiality does not stop at your company’s front door.
- Identify potential sustainability topics: Using the ESRS as a guide, build a long list of environmental, social, and governance topics that could be relevant to your sector and business model.
- Assess impact materiality: For each topic, evaluate the severity and likelihood of actual or potential negative or positive impacts your business has on people and the environment.
- Assess financial materiality: Consider whether sustainability-related risks or opportunities could materially affect your financial position, performance, or cash flows over the short, medium, or long term.
- Engage stakeholders: The ESRS expect companies to involve stakeholders in the materiality process. This includes employees, suppliers, investors, and affected communities. Their perspectives help validate and strengthen your findings.
- Determine material topics and document your reasoning: Topics that meet the materiality threshold on either dimension must be reported on. Your methodology and conclusions need to be documented and disclosed.
What makes this process genuinely challenging is that it requires both qualitative judgment and a thorough understanding of the ESRS requirements. The assessment is also not a one-time exercise — it should be revisited regularly as your business evolves and as the regulatory environment continues to develop. Conducting the double materiality assessment rigorously is widely regarded as the most consequential step in CSRD preparation, because it determines which parts of the standards your organization must actually report against. Once that is clear, the next challenge is building the data infrastructure to support those specific requirements.
What data does your organization need to collect for CSRD compliance?
The data your organization needs to collect for CSRD compliance depends directly on the outcome of your double materiality assessment. Material topics trigger specific ESRS disclosure requirements, each with its own set of qualitative and quantitative data points. That said, there are cross-cutting data requirements that most in-scope companies will need to address regardless of their specific materiality findings.
Cross-cutting data requirements
ESRS 1 and ESRS 2 set out general requirements that apply to all companies subject to CSRD. These include disclosures on your governance structure for sustainability, your strategy and business model, how sustainability risks and opportunities are managed, and the targets and metrics you use to track performance. This foundational layer of information must be in place before topic-specific data requirements are addressed.
Topic-specific data requirements
Once your material topics are confirmed, the relevant thematic ESRS standards define what you need to report. For example, if climate change is material, you will need data on greenhouse gas emissions across Scopes 1, 2, and 3, as well as information on climate-related risks and your transition planning. If workforce topics are material, you will need data on working conditions, pay equity, health and safety, and training.
Collecting this data is often where organizations encounter their first significant obstacles. Sustainability data tends to be distributed across multiple departments, systems, and sometimes geographies. Building reliable data pipelines, establishing clear data ownership, and implementing quality controls all require considerable time — which raises an equally important question: how far in advance should your organization start?
How long does it take to prepare for CSRD reporting?
Preparing for CSRD reporting typically takes between 12 and 24 months for most organizations, depending on the complexity of the business, the maturity of existing sustainability practices, and the resources dedicated to the process. Companies starting from scratch with limited sustainability infrastructure should expect to be at the longer end of that range.
The timeline breaks down roughly into phases. The first phase, which covers scoping, gap analysis, and the double materiality assessment, can take several months on its own. The second phase involves building data collection systems, training teams, and establishing governance processes. The third phase is the actual drafting, review, and assurance of the sustainability statement, which also requires meaningful lead time because external limited assurance is mandatory under CSRD.
Under the revised scope introduced by Omnibus I, companies that remain in scope will first report for financial year 2027, with reports published in 2028. That gives organizations that have not yet started a genuine window to prepare, but it is not as generous as it may appear. Building robust, auditable sustainability data processes is not something that can be left to the final quarter — and getting the timeline right depends heavily on having the right people involved from the start.
Who should be involved in CSRD preparation within an organization?
CSRD preparation requires involvement from across the organization, not just the sustainability team. Because the directive touches governance, finance, operations, legal, and HR, it requires cross-functional ownership to be effective. Treating it as a sustainability department project alone is one of the most common and consequential mistakes organizations make.
The key functions typically include:
- Board and senior leadership: CSRD places explicit governance requirements on companies, including disclosures on how the board oversees sustainability matters. Leadership engagement is not optional; it is a reporting requirement.
- Finance: The sustainability statement sits within the management report, and financial materiality assessments require finance expertise. Finance teams also frequently own the systems and processes that will need to capture sustainability data.
- Legal and compliance: CSRD introduces assurance requirements and legal accountability for disclosures. Legal teams need to be fully across the obligations and the risks of non-compliance.
- HR and people teams: Social topics, including working conditions, diversity, and training, represent a significant portion of the ESRS. HR teams typically hold much of the underlying data.
- Operations and procurement: Environmental data, supply chain impacts, and Scope 3 emissions generally sit within operations and procurement functions.
- Sustainability or ESG team: This team typically coordinates the overall process, manages the double materiality assessment, and owns the final report, but cannot complete the work in isolation.
Engaging the right people early, and ensuring each function has a clear understanding of what CSRD specifically asks of them, is what distinguishes a well-managed reporting process from a disorganized one. A clear internal governance structure, with defined owners and escalation paths, makes the overall effort significantly more manageable. With the right people in place, the next question is which tools and frameworks can support them in executing the work effectively.
What tools and frameworks help organizations manage CSRD reporting?
Several tools and frameworks can help organizations manage CSRD reporting more effectively, from dedicated sustainability reporting software to established frameworks that align with the ESRS. The appropriate combination depends on your organization’s size, technical maturity, and the complexity of your reporting obligations.
On the software side, a growing number of platforms are designed specifically to support ESRS-aligned data collection, gap analysis, and report drafting. These tools help centralize data from across the organization, track progress against disclosure requirements, and produce audit-ready outputs. For organizations managing data across multiple entities or geographies, investing in dedicated software early in the process is generally considered worthwhile.
In terms of frameworks, the ESRS themselves are the primary reference point, but other established frameworks can complement your preparation. Companies that already report to CDP, for instance, will find meaningful overlap with the climate-related disclosures required under ESRS E1. Similarly, organizations familiar with the EU Taxonomy will have a useful foundation for some of the environmental reporting requirements.
Beyond technology and frameworks, internal process design is equally important. Building clear data collection workflows, establishing review and sign-off procedures, and documenting your methodology throughout the process all contribute to a reporting system that holds up under external assurance. The ESRS require limited assurance on sustainability statements, which means your processes need to be traceable and defensible, not merely internally consistent. If you are ready to move from planning to action, the right external expertise can make that transition significantly faster.
Ready to get started with CSRD preparation?
CSRD preparation is a serious project, but you do not have to work through it alone. At Dazzle, we connect organizations with pre-screened CSRD reporting specialists who know the ESRS inside out and can hit the ground running. Whether you need someone to lead your double materiality assessment, build your data collection infrastructure, or guide your team through the full reporting process, we match you with the right expert for your specific challenge.
Our network of 150+ sustainability freelancers is available year-round, and we can connect you with the right specialist within 48 hours. No lengthy procurement processes, no one-size-fits-all solutions. Just the right expertise, when you need it. If you are ready to move forward, get in touch with our team and we will take it from there.
Working on your CSRD report?
The free CSRD Evidence Register lists all 14 documents, what each costs you and where teams get stuck, from a panel with Dazzle clients PostNL and Samskip.
