Insights into EU CSRD Readiness - A study by denxpert

Denxpert, an EHS&S data management SaaS provider, has released a comprehensive study on Corporate Sustainability Reporting Directive (CSRD) readiness in the European Union. This study provides a unique insight into the current state of CSRD awareness in the EU member states and valuable information for companies looking for CSRD compliance. This post summarizes the key findings of the study.

CSRD in a nutshell

The EU’s main reason for introducing the Corporate Sustainability Reporting Directive (CSRD) is to guide companies towards implementing more sustainable business practices. Sustainability reporting is based on the understanding that all businesses must learn to operate sustainability to remain competitive in the long term. In the first phase, the CSRD sets sustainability reporting requirements for large and listed companies operating in the EU. 

The EU approved the directive, and companies must start reporting in 2025. Each EU member state is responsible for incorporating the CSRD requirements (and sanctions) within their jurisdiction.

What is denxeprt’s CSRD study about?

With the reporting obligations set to commence in 2025, denxpert’s study reveals intriguing analysis and figures about how prepared companies are for this directive. Among others, the study introduces key metrics such as the number of affected companies, the state of their CSRD awareness, and market forecasts at country and regional levels. 

Western and Northern Europe take the lead in CSRD awareness, with Central and Eastern Europe lagging behind

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Key findings from the study:

• The study reveals that the largest Western and Southern European economies have the highest number of firms under the CSRD regulation. According to publicly available company data, Italy and Germany have the most affected companies with around 5000 companies each.
• The CSRD awareness is proportional to the number of affected firms in Western Europe, but it is extremely low in CEE, highlighting that the region is lagging in CSRD readiness. According to our model, the awareness is very high in France, the Netherlands, and Denmark with at least four times more searches than the number of affected companies in these countries.

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• The solution density, representing the range of CSRD reporting offerings available for regulated companies, shows a wide selection in Western and Northern Europe, but a surprisingly small selection in major Southern European countries. This metric reflects that finding a CSRD reporting solution is relatively easy for example in Germany or the Benelux States, while it’s more challenging in Italy or Spain.
• Keyword trends show the search popularity of CSRD-related keywords over time and across countries. Data indicate that the number of CSRD-related searches grew dynamically over the last 12 months in key countries. This reflects the growing interest in the topic of CSRD (incl. CSRD software) from online users.
• The study introduces the estimated proportion of CSRD-engaged companies showing the highest interest from users arriving from the Benelux followed by visitors from the Nordics.
• Denxpert’s forecast suggests a dynamic rise in demand for CSRD reporting solutions in most regions. The fastest growth is predicted to come from the less mature economies of Central and Eastern Europe.

What is going to happen with the CSRD and when?

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The European Union has already adopted the CSRD and companies must soon implement it. Each EU member state is responsible for incorporating the CSRD requirements (and sanctions) within their local jurisdiction. Below are the key milestones in this process:

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Conclusion

Denxpert’s research concludes that EU companies increasingly recognize the importance - and the approaching deadlines - of the CSRD directive and want to start preparations quickly. The complexity of the new requirements highlights the critical role of digital reporting tools in navigating CSRD compliance.

While there are certainly challenges associated with implementing CSRD strategies, many companies especially in Western Europe are making significant progress in this field. The future of corporate sustainability looks promising if businesses continue to innovate and adapt in response to the evolving landscape of sustainability reporting. 

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For country-level data and in-depth analysis, download the study for free.

If you need assistance in your CSRD preparation, contact us for a free consultation.

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