Two years of CSRD reporting: greater transparency, but strategy is lagging behind

The research evaluated what companies are telling us on climate, double materiality assessment, due diligence, actions and metrics, and governance. After the Omnibus I package narrowed the scope of the CSRD and simplified the standards, the quality of reports now depends more than ever on what companies themselves judge to be material.  

What we found

The CSRD works as a transparency tool. Users can now distinguish frontrunners from laggards and discern generic claims from actual evidence. However, our research also reveals a very uneven picture when it comes to how companies report on more complex sustainability challenges, as well as a concerning lack of integration in companies’ strategies. Among our key findings:  

• More climate targets with stalled ambition. 85 companies disclose decarbonisation targets, up from 73 last year. Net-zero commitments have barely moved (41 companies), and only 56 companies set interim targets.  

• Climate transition plans are spreading, but many are plans in name only. 68 companies report a climate transition plan, up from 54 last year. However, about 15 % of companies that declare a plan fail to show its basic elements.  

• Banks are falling behind. Only 5 of 17 financial institutions in the sample have decarbonisation targets with interim milestones. 14 report financing policies for high-impact sectors, but only 7 disclose climate transition plans tailored for high-impact sectors in their portfolios.

• Compliance on paper, substance still missing. Most companies tick the box on double materiality and due diligence, but few show how these processes shape strategy or address material impacts. For instance, while 90 companies say they have a due diligence process, only 13 explain how it informs its double materiality assessment. Moreover, only 46 % focus on areas of heightened risk of negative impacts, and only 21 companies tailor consultation to the affected stakeholder group in the context of their DMA process.

• Insights on progress lacking. A significant share of companies (40%) disclose actions and metrics that do not really correspond to the material risks and impacts they themselves identified. Moreover, only 30 companies reported metrics tracking effectiveness of actions in the value chain (only 5 of them with specific impact metrics).

• Biodiversity remains a blind spot. Of 42 companies with material biodiversity impacts in their own operations, only 25 disclose where those impacts occur (despite the fact ESRS requires reporting on material sites in such cases)

• Strategy is still a compliance add-on for most. Nearly all companies describe a governance structure for sustainability, but only a minority (20) show how governance bodies take material impacts, risks and opportunities into account when steering the company

• AI is almost absent. Only 6 companies list it among their material impacts, risks or opportunities, suggesting that risk-identification processes have not caught up with the change AI brings.

Beyond the findings: managing sustainability as a matter of resilience

Our research shows that the CSRD delivers where the standards are clear. Where they require clear metrics and details on ambition and strategy, as with climate transition plans, disclosures are more transparent and useful. Investors, civil society and business partners can distinguish claims from evidence, and frontrunners from laggards, which is vital for sustainable finance. But the same data shows hesitation in the transition, and that is a warning sign for EU competitiveness.

The sustainability transition is also an industrial and innovation challenge. A corporate sector that is not ready for clean industrial policy, green procurement and sustainable finance is a structural risk to EU competitiveness. Uncertainty in transition planning is a warning sign that the CSRD data helps to expose.

Our report goes beyond the findings. It sets out specific conclusions and practical recommendations for companies on how to develop strong reporting practices from climate transition plans and climate risk assessments to double materiality, due diligence and value chain reporting. It also offers directions for public authorities and EU policymakers on how to address the gaps we identified, from assurance and supervision to sector-specific guidance and the wider sustainable finance and industrial policy framework.

Explore the research

• Read the full report: methodology, detailed explanation of results and full set of recommendations for companies and EU authorities.  

• Explore research data: key findings and graphic representation

• Learn from good practice: our companion database gives practitioners examples to follow.