How to Prepare Your First CSRD Report

Preparing a CSRD-compliant sustainability report is a material undertaking — significantly more demanding than prior voluntary sustainability reports or NFRD-era non-financial statements. For Wave 2 companies with reports due in 2026 (for financial year 2025), preparation should be underway now. This article explains the structure, process, and practical steps for a first CSRD report.

The Report Structure

A CSRD report is integrated with the company's management report — it is not a separate standalone document. The sustainability information appears as a specific section of the management report, following a defined structure.

Required Sections Under ESRS 2 (All Companies)

Section 1: Governance

• Bodies responsible for sustainability oversight (board, sustainability committee, management function)
• How sustainability is integrated into governance processes
• Incentive structures linked to sustainability (executive remuneration, if applicable)
• Sustainability due diligence processes

Section 2: Strategy

• Business model description
• How material sustainability topics affect strategy and business model
• Material impacts, risks, and opportunities (IROs) — the output of the double materiality assessment
• Resilience of strategy to sustainability risks

Section 3: Impact, Risk and Opportunity Management

• How the company identifies, assesses, and manages sustainability IROs
• Policies and actions for each material topic
• Process for double materiality assessment

Section 4: Metrics and Targets

• Targets set for material sustainability topics
• Performance against targets
• Quantitative metrics required by material ESRS topical standards (emissions, energy, workforce, etc.)

Pre-Report Preparation Checklist

Before starting to write the report:

• Double materiality assessment completed — outputs determine which topical standards apply
• Material topics confirmed — list of ESRS topics requiring full disclosure
• Data collection systems in place — quantitative metrics cannot be improvised; data needs to be tracked throughout the year
• Governance structure documented — who has oversight of sustainability; how decisions are made
• Policy register reviewed — which policies exist (environmental, social, governance), which need to be created

The most common failure point: starting report preparation without data. ESRS requires specific metrics (GHG emissions by scope, energy consumption, headcount by category, health and safety incident rates) that must be collected as part of operations — they cannot be retrospectively reconstructed with accuracy.

Data Requirements by ESRS Topic

ESRS E1 — Climate (if material)

Required data:

• Scope 1 GHG emissions (metric tonnes CO₂e)
• Scope 2 GHG emissions — location-based and market-based
• Scope 3 GHG emissions by category (15 categories — at minimum the most significant)
• Total energy consumption (MWh) and renewable/non-renewable split
• Energy intensity (energy per unit of revenue or output)
• GHG intensity (Scope 1+2 per unit of revenue)
• Climate transition plan with milestones and target year

Data sources: Utility bills, energy management systems, GHG accounting tools (GHG Protocol compliant), fleet data, business travel records, supply chain emissions estimates.

ESRS S1 — Own Workforce (typically material)

Required data:

• Total headcount: employees and contractors by gender, age, geography
• Permanent vs temporary contracts
• Part-time vs full-time
• Average training hours per employee
• Percentage of employees covered by collective bargaining
• Gender pay gap (for companies above applicable size thresholds)
• CEO pay ratio (median employee compensation vs CEO compensation)
• Work-related fatalities: employees and contractors
• Total recordable incident rate (TRIR)

Data sources: HR systems, payroll data, occupational health and safety records.

The Report Writing Process

Step 1: Governance section Start with governance — it is the most straightforward section. Document the board committee or function responsible for sustainability, the management reporting lines, and any board-level sustainability oversight processes.

Step 2: Strategy and double materiality Document the double materiality assessment process and outputs. Describe how material topics connect to strategy. This section requires narrative judgment but should be anchored to the documented DMA.

Step 3: IRO management — policies and actions For each material topic, describe the company's policy and the actions taken. This requires honest description of current state — not future aspirations. Auditors will check whether described policies actually exist.

Step 4: Metrics and targets Insert the quantitative metrics for each material topic. Targets must be specific — with a base year, target year, and percentage reduction or improvement goal.

Step 5: ESEF tagging All quantitative ESRS disclosures must be tagged in ESEF format. This is a technical requirement — most companies will need specialist software or service support for ESEF compliance.

Assurance Requirements

CSRD requires limited assurance for the first reporting years, moving to reasonable assurance as standards mature.

Limited assurance: An assurance provider reviews the sustainability report and concludes that nothing material appears to be misstated. This is a negative assurance statement.

Reasonable assurance (future): The higher standard — a positive statement that the report presents fairly. Expected to be required in later years.

Who provides assurance: The statutory auditor or an accredited third-party assurance provider. Member states have flexibility in allowing who can provide assurance.

Assurance scope: Covers the disclosures in the sustainability report — both qualitative and quantitative. Assurance providers will review the underlying data and systems used to produce the disclosures.

Timeline for a 2026 Report (FY 2025)