Article 2 in Series: Early Lessons from the Trenches of CSRD Implementation by Noam Gressel
TLDR:
ESG officers often face reluctance, but CSRD offers a chance to build stronger relationships across the organization.
CSRD holds all decision-makers accountable, making it relevant for a broader range of decision makers and encouraging cross-department collaboration.
Efficient, tech-driven workflows are key to avoiding repetitive, tedious ESG tasks.
Early mapping of internal stakeholder interests helps create value aligned with CSRD and other regulatory tasks.
Avoid old ESG habits by exploring new ways to add value and build alliances through CSRD.
Given the enormity of the challenge posed by CSRD legislation and the notorious lack of cooperation ESG officers typically receive from their colleagues within their own organizations, the most realistic answer to the question above should be - “Not a chance”. People have an authentic dislike for tedious data collection efforts, new methodologies and endless meetings about materiality, gaps and risks. And while these people clearly have other things to do, when it comes to ESG-related data - they will most likely ignore, pass on the task to others or simply procrastinate when it comes to ESG. They didn’t grow up with it, they didn’t study it at university, the organization allocates the subject minimal resources and their bonuses have everything to do with other stuff.
A New Opportunity: CSRD as an Organizational Bridge
However, being rightfully accused of pathological optimism, I would like us to consider another response to our title question: “Sure, people love ESG officers, if they provide others with interesting information or new value”. Believe it or not, I actually know a number of ESG officers that made friends despite the relentless march of 3 and 4-lettered disclosures. How do they do it? And can this experience repeat itself for CSRD project managers? Those appointed to tame the Godzilla of ESG disclosures?
In fact, I suspect that because of its enormity, CSRD will be ESG professionals’ redemption when it comes to workplace social relations. This is because in many ways, CSRD is designed to hold almost every decision maker accountable and turn to ESG officers and CSRD project managers as their saviors. Everyone’s got skin in the game with CSRD: those dealing with energy, materials and operations (that’s the “E”), those responsible for serving humans within and outside the company (the “S”) and those tasked with policies, procedures and responsibilities (the “G”).
Leveraging CSRD for Organizational Value
As we’ve progressed along the CSRD implementation path, we’ve found that many of our clients are finding new uses for the wealth of information compiled in the process of preparing CSRD disclosures. The mere existence of cross-organization teamwork and access to the ESG-specific data hub (compiled by the ECO-OS AI-driven Starter Kit) has also been leveraged for several other internal interests and purposes:
Quantify and mitigate supply chain risks;
Assess the value of better performing products in old and new markets;
Identify and change outdated procedures hampering productivity;
Digitize and speed up entrenched workflows;
Set bolder targets within broader spheres of responsibility.
I’m beginning to believe that everyone will find some value in the fact that their subject matter is now required by law to face detailed disclosure in the very near future, while committing the highest echelons of the company to consider their own accountability.
Overcoming the Bean-Counting Trap
If you get the impression that all ESG officers and CSRD program managers need to do is sit back and let CSRD take its course - you are way more optimistic than I am. (Or is that something other than optimism I’m detecting?) The truth is, that for the vast number of those participating in the CSRD effort, in order to seek the benefits of the process, ESG officers and CSRD program managers will need to work hard to prime the system with a few key prerequisites:
For one, they must overcome the bean-counting culture of ESG reporting. To do this they must devise efficient workflows and seek the technologies that help the participants perform the bean-counting tasks easily, flexibly and accurately. Hyper-efficiency will only be achieved if the enterprise resources do the heavy lifting of digitization, transferring the data to specialized ESG software that can perform everything from ESG-specific calculations to assembly of the final deliverable - a digitally tagged CSRD report.
Engaging Stakeholders: Building Relationships that Matter
In addition, ESG officers and CSRD program managers must also do the rounds with their internal stakeholders to find out as early as possible: where do they require training and professional support? What are their primary gaps? How does CSRD relate to other regulatory tasks they are responsible for and how can you get 2-for-1 effects? And finally, what analytics are they missing in order to shine? While you can’t please everyone, you’ll be surprised how much easier it is to work with pleased individuals. (I know, you’re not really surprised).
Breaking the Old ESG Habits: Time for a New Approach
Unfortunately, I’ve seen too many ESG officers and consultants launching CSRD programs the same old way they’ve launched every other ESG mission: same old bottlenecked progression across materiality and gap analyses, data collection and QA, tedious talking-head training sessions and endless methodology papers. Resist that geeky temptation! Stop for a minute, preferably before you’ve embarked on the trodden trail, and embark on a new exploration with your colleagues. What would be valuable if the CSRD process could fulfill it? You may make some new friends simply by listening.
Your New Friends: Turning Colleagues into Allies
Now repeat after me: board committee members, division heads, financial accounting directors, compliance managers, internal comptrollers, COOs and EHS managers are all my friends! Turns out, if you start here - the daunting task of CSRD disclosure will be a whole lot easier, more valuable and most importantly– friendlier.
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