Less than half of companies required to report under the EU’s new Corporate Sustainability Reporting Directive (CSRD) in the upcoming year are “fully confident” in their ability to meet their sustainability reporting obligations, according to a new survey released by professional services firm PwC, even as most expect CSRD reporting to have a material impact on their companies, in areas including access to finance and employee retention.

While companies are still gearing up their CSRD reporting capabilities, nearly all report plans to invest in technology and training to meet their new sustainability reporting requirements, the survey found.

For the report, published by PwC Luxembourg, the firm surveyed 215 C-Suite executives, including CEOs, CFOs, CIOs, COOs and Chief Sustainability Officers at operating companies and financial market participants, mostly in European Economic Area countries.

The CSRD is a major update to the EU’s Non-Financial Reporting Directive (NFRD), the previous EU sustainability reporting framework, significantly expanding the number of companies required to provide sustainability disclosures to over 50,000 from around 12,000. Based on new underlying European Sustainability Reporting Standards (ESRS), the CSRD introduces more detailed reporting requirements on company impacts on the environment, human rights and social standards and sustainability-related risk.

The CSRD took effect from the beginning of 2024 for large public-interest companies with over 500 employees, with the first reports to be issued in 2025, followed by companies with more than 250 employees or €50 million in revenue in the following year, listed SMEs one year later, and non-EU companies with more than €150 million EU revenues reporting in 2029.

While the CSRD reporting requirements are rapidly approaching for the first cohort, the survey found that companies are at various levels of preparedness to comply with the new rules, which found that only 4% of companies required to report on 2024 are ready to have a CSRD report published, with 5% not having yet started their CSRD implementation, 22% still in the stage of understanding the CSRD’s concepts and requirements, and only slightly over half (56%) reporting that they are fully familiar with CSRD and ESRS requirements.

On a 1-to-5 scale gauging their confidence in successfully implementing the CSRD, 30% of companies required to report on 2024 rated themselves at 3 or below, and only 42% reported being “fully confident.” For the companies required to begin reporting the following year, only 14% said that they are fully confident in successfully implementing the CSRD.

Companies’ lack of confidence in being prepared to meet the CSRD requirements comes despite their perceptions of the new regulations as significantly material to their businesses. According to the survey, more than half of respondents required to report in 2024 expect CSRD reporting to be materially relevant to value creation for their companies, top areas of material impact cited including financing conditions for their companies (reported by 47% of respondents), employee retention (42%) and company valuation (36%). Additionally, more than 85% of respondents reported that they already use, or plan to use, sustainability data from CSRD as a material KPI for determining variable compensation for top executives.

Michael Horvath, Advisory Partner, Sustainability Leader at PwC Luxembourg, said:

“The CSRD is the cornerstone enabling Europe to deliver on the European Green Deal, elevating sustainability reporting over time to the same level of importance and rigour as financial reporting. It puts sustainability at the core of companies’ business models and operations, prompting them to integrate it into their strategic decision-making processes.”

The report also assessed the key challenges anticipated by companies in processing and managing the increased volume of sustainability information required by the CSRD, finding that companies that were closer to reporting, the 2024 group, were more concerned about data quality and consistency than their peers that are only required to report a year later, at 55% compared to 24%, respectively, while the latter group, consisting of smaller companies, were more concerned about resource constraints, reported by 54% of companies reporting on 2025, compared with 45% of companies reporting on 2024.

As companies scale up their preparations to comply with the CSRD, the survey found that the vast majority are planning investments in areas including technology, human resources and training.

More than 90% of companies beginning reporting on either 2024 or 2025 under CSRD reported that they have, or plan to, implement technology solutions for CSRD reporting. Within these groups, only 36% of 2024-reporting companies and 15% of 2025-reporting companies currently have non-financial reporting technology in place, the survey found.

Similarly, all companies responding to the survey reported that they have implemented or are in the process of developing training programs to educate their staff on CSRD sustainability reporting requirements. CSRD compliance will also require significant human resource allocations, the survey found, with more than half of companies allocating 3 – 5 full time employees to CSRD, and more than 20% allocating between 6 and ten full time employees.

Olivier Carré, Deputy Managing Partner, Technology & Transformation Leader at PwC Luxembourg, said:

“The successful implementation of CSRD hinges on leveraging advanced technology solutions that can efficiently manage and integrate vast amounts of sustainability data. While challenges in maintaining data quality and consistency are anticipated, the demands for accurate, real-time ESG reporting present an opportunity for growth. Companies must invest in robust data management and reporting systems to overcome these hurdles.”

Click here to access the report.