Romeo Kaptijn
Senior Consultant
“These are the pitfalls and opportunities of the new reporting standard”
Today we’re discussing Romeo Kaptijn about the opportunities and risks of the Corporate Sustainability Reporting Directive (CSRD) for companies.
Since the final publication of the CSRD, there have been various opinions about the value of this new reporting standard. One of them is that it’s “old wine in new bottles,” citing the pitfalls of previous standards. What’s your take on this?
There are indeed differing viewpoints in the market regarding the CSRD and how to address it. Broadly speaking, there are two schools of thought. On the one hand, we see companies that want to gain insight into the extent to which they comply with CSRD requirements, for which “traffic light tools” are useful. On the other hand, we see companies setting up extensive task forces to become CSRD-compliant to the greatest extent possible. In this sense, we see similarities with other standards such as GRI, SASB, or IIRC, where a great deal of time was spent on interpretation rather than actual sustainable action.
What is your view on the role of “the accountant” in this debate?
Because the information provided will be subject to verification, a sense of urgency is growing at various levels and across different departments within companies. As a result, it is no longer the sustainability manager who must emphasize the importance of transparency; instead, the CFO is now often the driving force. I view this as a positive development, especially when it comes to driving a comprehensive shift toward sustainability in the business world. Nevertheless, we still regularly see that the focus on reporting overshadows everything else.
What are the risks of an excessive focus on reporting?
The fact that it is subject to an audit and forms part of the management report is causing some concern among reporting companies. Although the CSRD encourages companies to think about the long term, it is the short-term reporting requirement that is currently demanding their attention. Companies, sometimes encouraged by consulting firms, want to go through the process of a gap analysis in the short term in order to fill gaps as quickly as possible. After all, the goal is to pass the auditor’s review. The unfortunate consequence is that too little attention is paid to the content. As a result, far more resources are allocated to reporting than, for example, to strategy and execution.
Accounting firms seem to have a significant say in this matter and are causing unease among reporting companies. To what extent is the accountant the bogeyman?
It is certainly not the case that the auditor can be held responsible for this; companies must also exercise critical judgment. If there are doubts about the relevance of the requested information, it is up to them to engage in dialogue with auditors and provide a healthy counterbalance where necessary. Because despite the comprehensiveness of the CSRD, the directive does indeed leave room for interpretation and, consequently, discussion. In addition, the CSRD offers companies a transparent platform to differentiate themselves, thanks to the comparability it provides among sustainability reports. However, this must be based on the substance of their strategy, policies, goals, and actions — not on how extensively these are described.
What is 2BHonest’s vision and approach in this context?
As a consulting firm, we believe we can play an important role as a bridge between companies and accountants. We conduct CSRD gap analyses ourselves, but our intention is always to remain actively involved in the process that follows. After all, identifying gaps is one thing, but filling them with meaningful content for the long term is another. I also feel that some companies truly need that support — particularly those that haven’t yet established a strong foundation in the area of sustainability. If you haven’t given sufficient thought to where you want (and need) to focus, you’ll end up drafting policies, action plans, and goals that are based on nothing. Also known as the “garbage in, garbage out” principle. Ultimately, we want to challenge our clients on the substance of their work, not on their (extensive) compliance with all requirements.
Want to learn more about CSRD? Romeo is here to help!
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