Second CSRD Reporting Season: More Pragmatism and Stakeholder Focus

In the second year of mandatory CSRD reporting, reporting practices are becoming more established. The average number of reported Impacts, Risks, and Opportunities (IROs) is lower than in the previous year, while the scope and number of reported sustainability topics remain stable on average. At the same time, companies are increasingly taking advantage of the flexibility to adopt a more pragmatic and reader-friendly approach. These are the results of the study “CSRD Reporting in Its Second Year: A Comparison” by Kirchhoff Consult, which analyzes the sustainability statements in 202 audited reports from 21 countries and 11 different sectors.

“The second reporting season shows that companies no longer view the CSRD merely as a compliance requirement, but increasingly as a strategic communication tool. Apparently, more and more companies are asking themselves who the collected information is actually relevant to and how the report can be tailored to the specific audience.” – Julian von Pressentin, Director ESG/Sustainability, Kirchhoff Consult

Trends: Three Developments Shape the Second Reporting Year

Kirchhoff Consult has identified three structural trends that are particularly evident in the second CSRD reporting year:

1. Introductory report summaries: More and more companies are prefacing their ESRS report with a standalone summary – featuring a key metrics dashboard, an IRO overview, and the most important core messages. The goal is to make the report accessible to a broader audience and provide a quick introduction.
    
2. Materiality as a Structural Principle: Materiality is no longer viewed merely as a selection criterion for topics, but increasingly also as a guiding principle for the chapter structure and the scope of the report.
    
3. Condensing repetitive content: Kirchhoff Consult observes a growing willingness to bundle content-related information and streamline the report’s structure. Repetitive descriptions of policies within the thematic chapters pose one of the greatest challenges for report length and readability. Some companies use centralized policy overviews in the general chapter (ESRS 2) or chapter-specific fact sheets to avoid redundancies. This allowed them to significantly reduce the length of their reports.
    

“We observe that best practices are emerging for example, in the presentation of IROs in tables or the introduction of introductory report summaries. Companies that invest now in structure and audience-oriented reporting will benefit in the long term from the increased relevance of their reports.” – Liz Gacon, Junior Consultant, ESG/Sustainability, Kirchhoff Consult

IROs: More Precision, Less Exaggeration

The average number of material IROs fell from 46 in the previous year to 40, with the median at 35. Particularly notable is the reduction in positive impacts – an indication of an increasingly critical and realistic approach to the concept, as well as alignment with the Amended ESRS, which will take effect in the future. The standard range is 20 to 60 IROs. About 99 percent of companies present their IROs in tabular overviews – a practice that has now become standard.

Materiality Analysis: Focus on Climate Change, Workforce, and Governance

On average, companies identify seven material sustainability issues – the same as last year. About 72 percent of the companies surveyed have maintained the same number of material issues. Fifteen percent report more issues, and 13 percent report fewer – though in cases where the number increased, typically only one issue was added, whereas in cases where the number decreased, several issues were removed at once. The so-called “trinity” of sustainability reporting – E1 (climate change), S1 (workforce), and G1 (corporate governance) – is considered material by nearly all companies.

Report Length: German Reports Remain Longer Than the European Average

The average length of a CSRD report is 134 pages (previous year: 128 pages). The range is 44 to 348 pages (previous year: 39 to 355 pages). National differences are evident: German reports are, on average, 9 percent longer than the European average – in the previous year, this difference was even more pronounced at around 24 percent. At the same time, there is a north-south divide: Northern European companies report in a significantly more concise manner than Southern European ones. 63 percent of companies have made virtually no changes to the length of their reports compared to the previous year. 19 percent have expanded their reports, while 18 percent have shortened them – in some cases by as much as 55 percent.
 

“We’ve noticed that the most comprehensive reports tend to come from Southern Europe. In Northern Europe, on the other hand, we’re increasingly seeing a pragmatic approach with shorter reports.” – Tori Weißenborn, ESG/Sustainability Consultant, Kirchhoff Consult
 

All the results of this study are available as a white paper here (German only).