Fortune 500 Manufacturer Prepares for CSRD Compliance

Challenge

A Fortune 500 industrial manufacturer with operations across 23 countries and over €8 billion in EU-generated revenue faced the first wave of CSRD reporting obligations. The company had published voluntary sustainability reports for nearly a decade, primarily aligned with GRI Standards, but its reporting infrastructure was fragmented. Sustainability data lived in spreadsheets managed by regional EHS teams, with no centralized collection system and limited assurance readiness.

The specific problems were substantial. The company's existing materiality assessment hadn't been updated since 2021 and didn't follow the double materiality methodology required by ESRS. Its Scope 3 emissions data covered only two of fifteen categories. Its social data — workforce metrics, human rights due diligence records, supply chain labor practices — was inconsistent across regions. And the finance team had never been involved in sustainability reporting, creating a disconnect between financial and non-financial disclosures.

With the first CSRD-aligned report due for fiscal year 2025, the company had roughly 18 months to overhaul its entire approach.

Approach

We structured the engagement in four phases, running some workstreams in parallel to meet the timeline.

Phase 1: Gap Assessment and Roadmap (Months 1-3)

We conducted a comprehensive gap analysis against all twelve ESRS standards — the five environmental standards (E1 through E5), four social standards (S1 through S4), and three governance standards (G1 plus cross-cutting standards ESRS 1 and ESRS 2). For each standard, we mapped existing data sources, identified missing data points, and assessed the quality and auditability of available information.

The gap analysis revealed that the company had reasonable coverage for climate-related disclosures (ESRS E1) but significant gaps in biodiversity (E4), resource use and circular economy (E5), and value chain workers (S2). We developed a phased roadmap that prioritized the standards most likely to be material while building foundational data infrastructure applicable across all standards.

Phase 2: Double Materiality Assessment (Months 2-5)

We facilitated a double materiality assessment involving over 120 stakeholders — including investors, customers, employees, regulators, NGOs, and community representatives across eight countries. The process followed EFRAG's implementation guidance, assessing both impact materiality (the company's actual and potential impacts on people and environment) and financial materiality (sustainability-related risks and opportunities that could affect the company's financial position).

The assessment identified eleven material topics across environmental and social dimensions. Notably, biodiversity emerged as material for the first time, driven by the company's mining-dependent supply chain and manufacturing facilities located near protected areas in Southeast Asia and Latin America.

Phase 3: Data Architecture and Collection (Months 4-14)

This was the heaviest lift. We worked with the company's IT team and an implementation partner to design a centralized sustainability data management platform. The system needed to collect granular data from 47 manufacturing sites, 12 distribution centers, and over 3,000 Tier 1 suppliers.

Key design decisions included building automated data feeds from existing ERP systems for energy consumption, waste generation, and water withdrawal; creating standardized templates for manual data collection where automation wasn't feasible; establishing data validation rules and approval workflows to ensure audit-readiness; and integrating the sustainability data platform with the company's financial consolidation system to enable connected reporting.

For Scope 3 emissions, we implemented a hybrid approach: spend-based estimates for low-materiality categories, supplier-specific data collection for the top 200 suppliers by emissions intensity, and activity-based calculations for transportation and distribution.

Phase 4: Report Development and Assurance Preparation (Months 12-18)

We drafted the inaugural CSRD-compliant sustainability statement, structured according to ESRS disclosure requirements. We worked closely with the company's external auditor — engaged early in the process — to ensure disclosures met limited assurance standards from the outset, even though the first year only required limited assurance.

Results

The company filed its first CSRD-compliant sustainability statement on schedule, covering all eleven material ESRS topics. Specific outcomes included:

• Complete Scope 1, 2, and 3 emissions inventory covering all fifteen GHG Protocol categories for the first time, revealing that purchased goods and services represented 62% of total emissions
• Centralized data platform collecting over 400 sustainability data points from 47 sites with automated validation, reducing manual data handling by approximately 70%
• Double materiality assessment engaging 120+ stakeholders across eight countries, with results mapped to specific ESRS disclosure requirements
• Limited assurance readiness confirmed by external auditors three months before the reporting deadline, with no material misstatements identified during dry-run procedures
• €2.3 million annual cost avoidance identified through the data collection process itself — energy inefficiencies and waste reduction opportunities surfaced by the granular site-level data that hadn't been visible in aggregated regional reports
• Supplier engagement program launched with 200 key suppliers, resulting in primary emissions data from suppliers representing 45% of Scope 3 by the reporting deadline

Key Takeaways

Start with data infrastructure, not the report. The single biggest risk to CSRD compliance isn't understanding the standards — it's not having auditable data. Companies that begin by building data collection and validation systems give themselves the foundation to meet not just current requirements but inevitable expansions in scope.

Engage finance early. CSRD places sustainability reporting on equal footing with financial reporting, and the external auditor will be involved. Companies that treat CSRD as purely a sustainability team exercise will struggle with assurance requirements. The CFO's office needs to own the data governance framework alongside the sustainability function.

Use the process to create value. The most successful CSRD implementations treat compliance as a catalyst for operational improvement. The granular, site-level data required by ESRS almost always reveals efficiency opportunities that offset a significant portion of implementation costs. Frame it as an investment in operational visibility, not just a regulatory burden.

Don't underestimate Scope 3 and social data. Most companies with existing sustainability reports are reasonably prepared for Scope 1 and 2 climate disclosures. The gaps that derail timelines are typically in Scope 3 emissions, biodiversity impacts, and social metrics — particularly for value chain workers where companies often have limited visibility.