Against the backdrop of the CSRD Deloitte‘CxO Sustainability Report 2024‘, it is clear that sustainability is no longer a marginal issue, but has long since taken a central place in the business strategy of companies. The Big 4 auditing and consulting firm Deloitte sheds light on the growing strategic importance of sustainability. We examine the study from a CSRD perspective and interpret the results accordingly.
The CSRD Deloitte Study 2024
Sustainability as a growth driver according to CSRD Deloitte study
What does the CSRD mean for companies?
The Corporate Sustainability Reporting Directive (CSRD) focuses on the disclosure of non-financial information, including the impact of companies on the environment and society. In the study, Deloitte emphasizes that 70% of CxOs worldwide expect climate change to have a major impact on their corporate strategies and processes over the next three years. In Germany, as many as 56% expect this. This shows how important it is for companies to view the requirements of CSRD as more than just a bureaucratic burden.
In particular, conducting a double materiality analysis (DWA) offers companies the opportunity to scrutinize their own business model, identify risks, reduce costs and promote innovation and growth.
Technology as a driver for reporting and sustainability goals
The use of climate technology is a decisive step towards reducing CO2 emissions. Half of managers have already started using technology solutions to achieve their climate targets and 42% plan to do so in the next two years. Of the companies already using technology, more than half say they are using it to develop more sustainable products and services. Executives expect this innovation push to bring the greatest benefit to their sustainability efforts in the next five years (38%).
The CSRD promotes the use of digital technologies to improve the collection and reporting of sustainability data. The CSRD Deloitte study emphasizes that 50% of companies have already implemented technological solutions to achieve their climate targets. These CSR tools play a key role in fulfilling reporting obligations under the European Sustainability Reporting Standards ( ESRS) or the EU Taxonomy, particularly with regard to collecting accurate and transparent ESG data.
There are other exciting studies on the use of technology: the PwC CSRD software study and another study confirm a fragmented CSRD software market.
The following graphic shows the purposes for which ESG software solutions are predominantly used by companies:
The biggest ESG challenges for companies
A large number of companies are already feeling the effects of climate change on their business activities. Organizations feel this most strongly due to changes in consumer behaviour (51%). The second most common reason given by the managers surveyed was that regulatory requirements, such as the CSRD or the Corporate Sustainability Due Diligence Directive (CSDDD), present them with challenges.
Climate-related disasters and weather events also have significant operational consequences for companies (50%). Other challenges include government incentives for climate investments (49%), employee health problems due to environmental changes (49%) and rising insurance costs or lack of availability of insurance (48%). These developments illustrate just how wide-ranging the climate-related challenges for companies already are.
CSRD Deloitte study: Commitment to measurable targets and progress
A central element of CSRD is the obligation to set clear sustainability targets and report on progress. The Deloitte CSRD study shows that 56% of companies have already implemented two to three significant “needle-moving” measures to achieve their sustainability goals. The most frequently implemented needle-moving measures are
- Use of more sustainable materials (51%)
- Use of technological solutions to achieve climate or environmental goals (50%)
- Increase in energy efficiency (49%)
- Direct purchase of renewable energy, by contract or through renewable energy certificates (49%)
The following important measures are considered somewhat more difficult to implement and have been implemented less frequently by companies to date:
- Development of new, climate-friendly products or services (48%)
- Require suppliers and business partners to meet specific sustainability criteria (47%)
- Redesigning processes, infrastructure and/or supply chains to become more climate-resilient (46%)
- Linking executive remuneration to performance in the area of environmental sustainability (43%)
This shows that companies are increasingly taking concrete steps to report their sustainability performance in a measurable and transparent manner – a key aspect of CSRD. However, there are still some effective measures with great potential. As an ESRS data point must be disclosed in CSRD reporting, among other things, which makes it transparent whether part of the management’s remuneration is linked to the achievement of sustainability targets, it can be expected that this measure will be implemented more frequently in future.
Conclusion on the CSRD Deloitte study
The Deloitte study and the CSRD share the central view that sustainability is not just a regulatory issue, but a strategic driver for companies. The link between technology, climate targets and reporting, as emphasized in both the study and the CSRD, shows that companies that address these requirements early and comprehensively can be successful in the long term.
