Building a CSR Reporting Framework

𝐌𝐨𝐬𝐭 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐭𝐡𝐢𝐧𝐤 𝐭𝐡𝐞𝐲’𝐫𝐞 “𝐬𝐭𝐚𝐫𝐭𝐢𝐧𝐠 𝐭𝐡𝐞𝐢𝐫 𝐂𝐒𝐑𝐃 𝐣𝐨𝐮𝐫𝐧𝐞𝐲.” 𝐓𝐡𝐞 𝐭𝐫𝐮𝐭𝐡 𝐢𝐬 — 𝐲𝐨𝐮’𝐫𝐞 𝐞𝐢𝐭𝐡𝐞𝐫 𝐨𝐩𝐭𝐢𝐦𝐢𝐳𝐢𝐧𝐠 𝐢𝐭, 𝐨𝐫 𝐭𝐫𝐲𝐢𝐧𝐠 𝐭𝐨 𝐬𝐮𝐫𝐯𝐢𝐯𝐞 𝐢𝐭. We’ve seen both sides up close: → On one side, there’s the sustainability-mature enterprise: Well-established reporting. Strong internal ownership. They’re not building CSRD compliance — they’re refining it. Their biggest unlock? Using tech to make the process repeatable, efficient, and integrated into BAU. For them, CSRD isn’t disruption — it’s an opportunity to gain a strategic advantage through new data visibility. → On the other end? The company starting from scratch. No internal systems, no strategy, no operating model. For them, CSRD isn’t a “journey” — it’s a 𝐜𝐫𝐚𝐬𝐡 𝐜𝐨𝐮𝐫𝐬𝐞 𝐢𝐧 𝐬𝐮𝐫𝐯𝐢𝐯𝐚𝐥. No matter where you fall, here’s the hard truth: You can’t get CSRD right unless 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲, 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐦𝐨𝐝𝐞𝐥, 𝐚𝐧𝐝 𝐭𝐞𝐜𝐡 𝐰𝐨𝐫𝐤 𝐭𝐨𝐠𝐞𝐭𝐡𝐞𝐫. Most companies want to start with the tech. But if you don’t know what data you need… Or who owns it… Or how it flows… You’ll be left duct-taping tools together while the reporting deadline ticks down. What works? Start the flywheel. • Rapid strategy alignment • Map your data requirements • Define roles and workflows • Then deploy technology that reinforces that system That’s how you turn CSRD from chaos into clarity. And yes — we’ve built Tracera to support both ends of that spectrum. But whether you use our tech or not, the order of operations matters. Because CSRD will expose the gaps in your ESG maturity. The good news is: it can also be the forcing function that levels it up. (Great insights from Mike Bascombe!)

In the world of CSRD reporting, materiality is a cornerstone concept—but did you know there are three distinct types of materiality tests, each serving a unique purpose?     Here’s a breakdown:   ♟️Material matters:  Identifying material matters ensures you're reporting on the right topics. These topics are identified through a double materiality assessment, which considers both the impact of external factors on your business and your business's impact on external stakeholders. T   📄Material information:  Once you’ve identified your material matters, you need to determine the material information about those matters. This means considering the disclosure requirements of applicable standards and considering what your report users (e.g., investors, customers, regulators) would find relevant and useful for decision-making.    ✅Material misstatement:  Assurance providers will look for whether there has been a material misstatement in your disclosure. This involves evaluating whether the material information that you provided is accurate and reliable, as well as whether you omitted information that should be considered material.    Each type of materiality builds on the other, creating a robust framework for transparent and effective sustainability reporting.     To achieve a CSRD-compliant report, you must pass all three materiality tests: ensuring you’re reporting on the right topics (material matters), providing the right information (material information), and ensuring the accuracy and reliability of the information. By addressing all three, you not only align with regulatory standards but also strengthen stakeholder confidence and enhance the credibility of your disclosures ✅

𝗘𝗦𝗚𝗶𝗻𝗧𝗵𝗿𝗲𝗲: 𝗖𝗔 𝗦𝗕 𝟮𝟱𝟯: 𝗔 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗥𝗼𝗮𝗱𝗺𝗮𝗽 (https://lnkd.in/gbxNrA9e) Preparing for multiple and differing sustainability regulations is complex and requires thoughtful planning and strategic investment in governance, resources, and infrastructure. Catherine Atkin and the team at Carbon Accountable recently published a Regulations Roadmap “to demonstrate the feasibility of adopting regulations and implementing SB 253 expeditiously, in line with the statutory mandate established in the law, which provides for first reporting by companies in 2026.” The roadmap highlights some key points related to efficiency, indicating that “[SB253] was purposefully structured to minimize the burden on the California Air Resources Board (CARB) to develop regulations and support ongoing implementation of the Act, ensure streamlined reporting by companies, and provide access to readily available GHG emissions data for stakeholders.” 1. 𝙍𝙚𝙥𝙤𝙧𝙩𝙞𝙣𝙜 𝙨𝙩𝙖𝙣𝙙𝙖𝙧𝙙𝙨: The GHG Protocol standards and guidance are included as the accounting and reporting standard to be used by all companies subject to SB 253. The GHG Protocol is the internationally recognized standard for GHG emissions reporting and the cornerstone of all mandatory and voluntary corporate reporting frameworks worldwide. Following the GHG Protocol can help reduce compliance burdens, while promoting global alignment of reporting standards. 2. 𝙍𝙚𝙥𝙤𝙧𝙩𝙞𝙣𝙜 𝙨𝙪𝙗𝙢𝙞𝙨𝙨𝙞𝙤𝙣: SB253 includes a clear focus on minimizing duplication of effort by reporting companies including allowing reporting companies to submit required GHG emissions information in multiple formats. Reporting entities may submit reports prepared for any purpose, including to comply with other national and international mandatory or voluntary disclosure requirements and frameworks, as long as the reports include the company and GHG emissions information. 3. 𝘼𝙨𝙨𝙪𝙧𝙖𝙣𝙘𝙚: Instead of calling for the accreditation of assurance providers, the Act describes required assurance provider qualifications and states clearly that the assurance process should minimize the need for companies who may be reporting in other jurisdictions to engage multiple assurance providers. The time to act is now, below are key no regrets moves for organizations: 1. 𝘎𝘦𝘵 𝘴𝘵𝘢𝘳𝘵𝘦𝘥! Strengthen governance, materiality assessment, data processes & controls. 2. 𝘐𝘯𝘤𝘳𝘦𝘢𝘴𝘦 𝘤𝘰𝘯𝘧𝘪𝘥𝘦𝘯𝘤𝘦! Engage in an assurance readiness assessment to understand preparedness for assurance & regulatory scrutiny, with a priority focus on GHG emissions reporting. 3. 𝘉𝘶𝘪𝘭𝘥 𝘤𝘢𝘱𝘢𝘤𝘪𝘵𝘺! Educate & develop capabilities internally & with the BoD.  #deloitteesgnow