PwC’s Global CSRD Survey 2024: How is financial services responding?

The EU’s Corporate Sustainability Reporting Directive (CSRD) requires companies to make detailed disclosures about sustainability performance and to consider the implications of sustainability across a wide range of topics, including climate change, business conduct, resource use, pollution and biodiversity. How is the financial services industry responding?

In PwC’s inaugural Global CSRD Survey 2024, companies say that reporting under the EU’s Corporate Sustainability Reporting Directive will bring tangible business benefits, despite the tight timelines and the complexity of implementing the regulation.

Around three-quarters of companies preparing to file under the directive, including those headquartered outside the EU, are factoring sustainability into decisionmaking to a greater extent or plan to do so. They also see a wide range of business benefits flowing from the CSRD, including better environmental performance, improved engagement with stakeholders and risk mitigation.

The survey findings are encouraging for supporters of the new reporting regime who predicted that greater transparency in sustainability would drive changes in business conduct. There are, however, obstacles to implementing the directive, including issues around data availability, staff capacity and the need for new investments in technology.

The survey suggests that companies are starting to appreciate that the directive is not only a major new reporting obligation but also an opportunity for leaders to understand in greater depth how sustainability will challenge today’s business models and create opportunities for growth and reinvention. About a third of participants even expect CSRD implementation to lead directly to revenue growth and cost savings, and those further along in their implementation journey are more optimistic about the business benefits across all dimensions.

What about the financial services industry?

Within financial services, approximately one-third (33%) of survey participants expect CSRD implementation to lead directly to revenue growth, compared with 28% across all industries. A sizeable proportion of financial services respondents (30%) also indicated that CSRD implementation will lead to cost savings. This was slightly ahead of the global population (26%).

Despite this optimistic backdrop, there still appear to be challenges (not necessarily unique to FS):

A surprisingly low proportion of respondents have completed initial scoping.
Completion of double materiality assessments was also low across the board.
Many financial services companies are uncertain about how many impacts, risks and opportunities (IROs) identified.
Financial services lags the global population in terms of completing disclosure gap analysis.
Levels of involvement of the technology function are surprisingly low in financial services.
Unsurprisingly, given the lack of maturity of non-financial reporting, there is still wholesale use of spreadsheets to support sustainability reporting efforts (even more than in other industries).
Data availability and quality are seen to be a bigger obstacle for financial services companies.

Implementing the CSRD isn’t plain sailing. Reach out to us if you feel you need support with getting ready.

Summary

Similar to other industries, many players in financial services expect implementation of the CSRD to lead directly to revenue growth and cost savings. Despite this optimism, however, there are obstacles. Problem areas identified in PwC’s latest survey include a lack of progress in assessment and analysis, a lack of clarity on IROs, a reliance on old-fashioned reporting technology, and issues with data availability and quality.

PwC can support you in your CSRD journey by helping you to understand the reporting criteria, translating these requirements into actionable strategies, assessing your readiness and transforming processes to embed sustainability practices seamlessly into operations. Implementing the CSRD isn’t plain sailing. Reach out to us if you feel you need support with getting ready.