Counting down to CSRD implementation

Giulia Scanferla, Senior Sustainability Reporting Manager, BAT, outlines how businesses can prepare for the latest disclosure requirements coming out of the European Union.

Counting down to CSRD implementation

Although a complex regulation, the EU’s Corporate Sustainability Reporting Directive (CSRD) presents an opportunity for many businesses not only to be CSRD-compliant, but to leverage their reporting to support sustainable value creation. It is still early days, and practices and guidance around the CSRD continue to develop at pace. At BAT, we are committed to addressing not only the public health impact of our products, but also to integrating and embedding sustainability across our business. This includes in our sustainability reporting. Here we outline some steps we have taken at BAT others may wish to consider in their CSRD journey.

Mapping reporting obligations

Reporting will begin as early as fiscal year 2024 for some companies, and the requirements are extensive. Companies that fall under the scope of the CSRD should firstly assess how, and to what extent, they are affected. This can be a complex process. How an organisation is captured under the CSRD may lead to different implications for compliance timings, internal reporting processes and the scope of data to be reported.

Undertaking a disclosure gap analysis

It may not necessarily be the case that all those in scope have to start from scratch. While the CSRD represents a significant step change in reporting, including the number of disclosures required, there are certain overlaps between the CSRD European Sustainability Reporting Standards (ESRS) and the Global Reporting Initiative (GRI) and Sustainable Accounting Standards Board (SASB) standards, for example. Therefore, for those already using other reporting frameworks and standards, you may find some quick wins by identifying your existing disclosures that map to the ESRS.

Undertaking a Double Materiality Assessment 

The CSRD specifies the use of a double materiality assessment (DMA) to determine the material matters and material information to be reported on. This serves as the starting point for reporting under the ESRS. It includes an organisation’s own operations as well as its upstream and downstream value chain. This allows an organisation to determine its material sustainability topics across two dimensions:

  • Impact materiality: an organisation’s actual or potential, positive or negative impacts on people or the environment over the short-, medium- or long-term.
  • Financial materiality: the identification of information that is considered material for primary users of general-purpose financial reports.

At BAT, we’ve been conducting sustainability materiality assessments for a number of years, and undertook our first DMA in 2022. In 2023, we updated our DMA, building on our work of 2022, to align more closely with the most current drafts of ESRS at the time we carried out the exercise.

DMAs will need to be revisited and updated on a regular basis. We continue to refine our DMA approach, including by working to further understand and develop financial impact pathways, for example.

Defining a clear roadmap

In our view, it’s also important to define a clear roadmap to CSRD compliance, and to do things in the right order. For example, requirements for external assurance of sustainability information affect the design of the control environment, so we believe data gathering and reporting systems should be considered from the outset.

The CSRD introduces mandatory assurance of sustainability information. This requires limited assurance from the date of initial reporting, with the ambition of moving to reasonable assurance for fiscal year 2028. Thinking about your control environment, data quality and availability of sufficient assurance documentation is therefore a good idea; alongside a standard approach to collecting, measuring, reporting and assuring sustainability information and metrics, including a set of reporting criteria.

Implementing an appropriate governance structure

As we progress our understanding of the CSRD and of our sustainability impacts, risks and opportunities, we will aim to ensure that we have the right forums, policies and processes in place for the management of our material sustainability topics, and our disclosures about them.

Unleashing value creation!

At BAT, we see the CSRD as an opportunity for companies to transform what could be largely seen as a compliance exercise, into a proactive sustainability strategy; by integrating material sustainability matters into their core corporate business strategy, thereby bringing financial and sustainability matters and opportunities together to create value for the company and beyond.


For BAT, reporting is not the end goal. We see it very much as a tool to drive the right decisions. Improving your sustainability information enables improving your sustainability impacts.

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