Data challenges leave 83% of businesses unprepared for mandated CSRD reporting

Over four-fifths (83 per cent) of businesses lack confidence in the audit-readiness of their ESG data for compliance with the Corporate Sustainability Reporting Directive (CSRD). This is according to a new survey of 1,000 senior IT and data leaders across the UK and France by Semarchy, a leader in master data management (MDM) and data integration.

While 65 per cent of eligible organisations aspire to be audit-ready and meet looming reporting deadlines within the next 12 months, a quarter (25 per cent) today lack confidence in the quality and reliability of their ESG data and fewer than a third (27 per cent) believe they currently have the necessary data management and systems to meet the strict reporting requirements.

At the same time, around one in three (31 per cent) organisations say continued uncertainty around the guidelines has them taking a measured approach to addressing compliance. This response is amidst rumblings that the EU will announce a simplified package of sustainability directives in February 2025.

The survey also examined accountability for company-wide CSRD compliance, with 68 per cent of businesses stating that senior data executives, including Chief Data Officers (CDOs) and Chief Information Officers (CIOs), play a pivotal role. This suggests a new level of responsibility for IT organisations as they aggregate vast amounts of data from disparate sources into mandated reports used by investors, analysts, and other stakeholders to evaluate a business’ sustainability performance and risks. This compares to just 54 per cent for senior sustainability roles, such as Head of Sustainability or ESG. A surprisingly small number (33 per cent) say that their Chief Financial Officer (CFO) is involved in the compliance process despite the heavy financial implications of regulatory change.

To accelerate audit readiness for CSRD reporting, over two-thirds (68 per cent) of companies plan to allocate more than 10 per cent of their annual IT budgets to CSRD compliance, with over a quarter (26 per cent) planning to invest more than 20 per cent.

While the poll of business leaders shows a clear gap in readiness, Semarchy believes that by getting back to the basics of master data management, the CSRD compliance process can be simplified and automated. Indeed, according to the survey, 89 per cent of companies have been collecting and reporting on ESG data for at least a year, with more than half (58 per cent) doing so for more than three years.

Hervé Chapron, SVP for Global Sales & Global Manager EMEA at Semarchy said: “With regulatory uncertainty and rising expectations around sustainability reporting, many organisations view compliance as a significant hurdle. The challenge isn’t always a lack of data — it’s often about ensuring its reliability and trustworthiness.

“Fortunately, solving this doesn’t demand excessive IT spending or technical sprawl. Most companies already collect the data they need for CSRD compliance; adopting centralised, scalable tools allows them to meet regulatory and business deadlines with minimal disruption. Organisations must shift their perspective on compliance and reporting. Rather than viewing it as a complex burden, businesses can leverage the centralised data for better decision-making and create long-term value. Simplified data management turns audit-readiness into a strategic advantage.”

Semarchy will be running a webinar on 20 February discussing insight on actionable steps to achieve CSRD compliance.