The new CSRD directive: challenges and requirements

The CSRD directive requires companies to provide detailed reporting on their ESG activities. Under the new law, sustainability reporting (previously mandatory only for a very small group of large companies in Poland under the NFRD directive) will soon become obligatory for enterprises that meet at least two of the following three criteria: an average annual workforce of more than 250 employees, net annual sales revenue of €50 million, and total assets of €25 million. In subsequent years, the requirement will be gradually extended to other company thresholds. It is estimated that around five to six thousand enterprises in Poland will be affected. These regulations may prove a real revolution, particularly for SMEs, which until now have not engaged in ESG reporting.

According to experts from SAIO, a process automation company belonging to ING, the biggest challenges companies will face in reporting under the EU’s CSRD directive are:

• Collecting, verifying, and analyzing large amounts of data
  This process can be time-consuming and costly, especially for companies just beginning their journey toward sustainability.
• Gathering data from many different systems across multiple business units
  The format of source data often varies and must be standardized to meet directive requirements. This makes the reporting process even more time-consuming and further prone to errors.

Experts also warn that failure to submit a report—or submitting an incorrect one—may expose companies to financial penalties.

The CSRD directive means a vast amount of data to verify. How can automation help?

According to business process automation specialists, implementing business robots is far simpler than building additional tools to monitor ESG processes, for example within ERP systems. This is particularly important since the directive covers 1,100 data points, from which companies will need to report those most relevant to their operations. Automation makes it possible to collect this information reliably and more quickly, while eliminating human errors, improving accuracy and consistency, and reducing operational costs.

Based on the experience of SAIO experts, business robots can support ESG data collection and reporting through actions such as:

• Verification and documentation collection
  Using robotics and AI, robots can support verification and data gathering (e.g., CO₂ emissions) from government databases.
• Support in surveys and data gathering
  Robots can help verify ESG policies and actions implemented, as well as ESG indicators from suppliers or customers in the supply chain.
• Providing ESG indicators
  As an extension, robots can deliver, calculate, and monitor or compare ESG indicators based on the collected data.

Automatic contractor verification

A good example of a solution supporting ESG data collection is robots that automatically verify contractors. With RPA and AI, a robot can shorten the time needed to collect information about a contractor to just two minutes, while completely eliminating human errors and cyclically comparing the data. This removes the need for employees to verify contractors across multiple sources (checking websites, the VAT taxpayer “white list,” sanction lists, searching for ESG policies or company reviews), and helps avoid cooperation with unreliable or dishonest business entities.

Business robots help reduce repetitive tasks every day

In most processes, robots work at least five times faster than an employee performing the same task. This allows employees to save time, for example in accounting processes. SMEs, for instance, can save the equivalent of up to six full-time positions in re-invoicing processes.

“Business process automation is becoming an indispensable element in supply chain management, particularly in response to growing stakeholder expectations regarding corporate responsibility and transparency, including regulatory reporting. With business robots, organizations will not only be able to meet legal requirements but also improve operational efficiency and competitiveness in the market. Automation of ESG processes will therefore no longer be a vision of the future but a regular part of ESG reporting. It will be helpful—and in some cases necessary to implement—especially in companies that process large amounts of data but have no prior experience in sustainability reporting,” says Przemysław Lewicki, CEO of SAIO S.A., part of the ING Group.