The increasing requirements of the Corporate Sustainability Reporting Directive (CSRD) pose the following question for companies: Who is actually responsible for the sustainability report and the preparation of the double materiality analysis? The answer is complex, because it is a real joint task. In this article, you will find out which internal and external stakeholders are typically involved, how responsibilities are allocated and how you can make the sustainability reporting process more efficient.
1. responsibility within the company
Management Board and Supervisory Board
The overall responsibility for the sustainability report, which forms part of the management report, lies with the Management Board. It has a duty to ensure that the report complies with legal requirements and reflects the company’s strategic priorities. The Supervisory Board on the other hand, monitors the quality of the report and, if necessary, selects external auditors.
Specialist departments: A cross-departmental task
Implementing the sustainability report is a cross-team challenge. Various departments play a central role:
- Sustainability department: Often the main person responsible for coordinating, collecting and analyzing the relevant data.
- Finance/Accounting: Provides methodological support, particularly in the integration of financial and non-financial information.
- Legal/Compliance: Helps to comply with regulatory requirements and ensures the legal conformity of the report.
- HR: Provides data on social issues such as diversity, working conditions and personnel development.
- Risk management: Assesses sustainability risks and their impact on the business strategy.
- Marketing/Communication/Investor Relations: Can present complex topics in a way that is easy to understand for a broad target group.
2. insights from practice: who takes care of the materiality analysis
A recent study by Deutsches Aktieninstitut shows how companies divide up the tasks relating to the sustainability report and materiality analysis in practice. Note: Multiple answers were possible.
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Coordination of the materiality analysis:
- 50% of companies rely on their accounting department.
- The sustainability department is also responsible for 50% of the coordination.
- Around 20% rely on individual solutions, e.g. specially formed project teams.
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Technical expertise for the materiality analysis:
- More than 80% of companies actively involve the sustainability department.
- Around 60% rely on the expertise of the accounting team.
- Departments such as Legal, HR, Compliance and Risk Management also make important contributions.
This data underlines the fact that the sustainability report is a joint task that requires different perspectives and competencies. At the same time, it is also interesting to see how differently responsibilities are distributed within the companies and that many companies have not yet formed their own department for materiality analysis.
Best practice from our experience
From our perspective, the “CSRD” task should be assigned as closely as possible to the Finance and Accounting team. We see the following advantages:
- Close link to financial reporting in order to publish a uniform and consistent management report
- Experience in the collection, consolidation and preparation of reliable data
- Extensive knowledge of regulatory reporting requirements
- Direct line to auditors and experience in dealing with them
The following graphic shows other important points for considering which department is best suited to this task.
3. external partners for the sustainability report
In addition to internal stakeholders, external partners also play a central role in the preparation of the sustainability report:
- Sustainability consultants: CSRD experts contribute their specialist knowledge of the European Sustainability Reporting Standards (ESRS) and provide support with the materiality analysis.
- Auditor: From 2024/2025, the CSRD will require an external audit of sustainability reports to ensure their quality and transparency.
4. tips for an effective materiality analysis
Many companies work with scarce resources when it comes to the sustainability report and need to allocate them well, especially when the task falls to departments with other main responsibilities. To make this process as smooth as possible, the following tips can be helpful:
- Define clear responsibilities: Define early on which department will take on which role. Clear coordination minimizes misunderstandings and promotes efficiency.
- Promote cross-departmental cooperation: Workshops and internal training create a better understanding of CSRD requirements and improve collaboration between departments.
- Start collecting data early enough: Especially when many departments are involved in the preparation of the sustainability report, collecting the necessary data is a major task that should be started early enough. Depending on the size of the company, it may be a good idea to start before the actual reporting year.
- Use efficient tools: With our Excel template for double materiality analysis you can maintain an overview. It helps you to document the results of your materiality analysis in a structured way and simplifies the preparation of the sustainability report.
- Take advantage of external support: Consultants and auditors can help you overcome challenges and meet regulatory requirements. We offer a practice-oriented 4-hour workshop on the topic of materiality analysis that prepares you well for this part of your sustainability reporting.
5 Conclusion: The sustainability report as a team effort
The preparation of a sustainability report requires the interaction of many players. Cross-departmental collaboration, supported by clear processes and efficient tools, is the key to success. Companies that start planning early and deploy suitable resources can not only meet the regulatory requirements of the CSRD, but also gain valuable insights for their business strategy.
