Implications of the CSRD on sustainability reporting: the need for digital maturity

Abstract: With the implementation of the EU Green Deal, the EU has shown that it takes sustainability and climate-related issues seriously, as deminstraded by the implementation of the new reporting directive CSRD. CSRD aims to increase the transparency, reliability, and comparability of companies' sustainability performance. This is to ultimately make sustainability performance equally as important as financial performance when comparing companies. To achieve this goal, more data than ever before wil have to be collected and reported. There is a consensus among experts that the digital maturity of companies required to handle all the data is too low. Therefore, it is important to research what digital maturity is in the context of sustainability reporting, as well as the opportunities and challenges linked to it.  The purpose of this thesis is therefore to increase the understanding of the opportunities and challenges facing an organization when reporting in accordance with CSRD. Therefore, the goal of this thesis is to identify factors and capabilities which affect digital maturity in the context of sustainability reporting. Furthermore, the goal is to investigate the role of digital maturity in companies' efforts to report in accordance with CSRD.  To answer the research questions, semi-structured interviews have been conducted with industry exprets, and the results from these interviews were then analysed in relation to previous research on the subject.  The thesis concludes that there is a consensus that digital maturity will be a necessity to be able to report in accordance with the new requirements. Furthermore, the thesis presents that digital maturity, in this context, can be summarized into three main areas: Company culture, Leadership's vision nad ambition, and Digital strategies and capabilities. The thesis also concludes that there are significant potential gains to be made by having a high degree of digital maturity in the field, but it will potentially be a challenge to achieve due to, amongst other, challenges in the value chain.