Excel Is Not Valid As A Reporting Tool For CSRD Compliance

A New Era In Sustainability Reporting

For years, sustainability teams have relied on Excel to collect, analyse, and report environmental, social and governance (ESG) data. However, emerging regulations like the Corporate Sustainability Reporting Directive (CSRD) bring an unprecedented volume, complexity and scrutiny of sustainability information – rendering old methods like spreadsheets obsolete.

This shift prompts many questions around data management, reporting standards and choosing the right tools. This article breaks down the key challenges spreadsheets face under CSRD, and why more sophisticated sustainability software is now essential.

Mandated Digital Reporting Formats

A core requirement is for sustainability reports to adhere to the European Single Electronic Format (ESEF). This leverages XBRL (eXtensible Business Reporting Language), an open XML-based standard, for tagging report data to enable automated analysis and comparable benchmarking.

XBRL provides unique identifiers and labels as metadata that renders sustainability data ‘intelligent’ and interconnected. However, defining and implementing these custom XBRL taxonomies aligned to reporting standards requires significant technical resources.

Dealing With Expanding Data Requirements

In addition to new formatting standards, CSRD also massively expands the scope of sustainability reporting across environmental, societal and governance dimensions. Hundreds of new datapoints introduce complexity regarding data sourcing, validation and stewardship.

Spreadsheets are error-prone when handling such volumes of interconnected metrics across departments and global sites. Data governance and quality assurance is crucial when external assurance over public disclosures is mandated.

Process Automation Is Key

With XBRL and expanded data requirements, manual approaches like spreadsheets become highly inefficient. Purpose-built sustainability management platforms provide automation for data collection, centralised structured storage, validation workflows and pre-configured reporting outputs.

Advanced solutions also enable auditability over data changes, version control capabilities, role-based permissions and business intelligence integrations for identifying insights across highly normalised data. Custom dashboards empower transparency both internally and to external stakeholders.

In summary, prescriptive new EU regulations require sustainability teams to rapidly adopt more advanced technical capabilities focused on structured and transparent data management. While spreadsheets were once sufficient, leading technology now offers transformative opportunities to oversee ESG performance and build stakeholder trust.