Why You Need a “Practice Run” at CSRD-Aligned Sustainability Reporting
The Corporate Sustainability Reporting Directive (CSRD) is a critical framework for businesses operating in the EU. It has greatly expanded the number of companies required to disclose their sustainability activities and set a new baseline in global reporting.
Companies already subject to the EU Non-financial Reporting Directive (NFRD) are mandated to publish their first CSRD-aligned sustainability reports in 2025. Large in-scope companies not subject to NFRD are next to publish their CSRD-aligned reports in 2026. CSRD requires a much higher volume and level of data management than most companies have experienced, which is why many in this next wave are using their 2025 sustainability report as a practice run to transition toward compliance.
This allows companies to simulate CSRD-aligned sustainability reporting, identify gaps, and make necessary adjustments before compliance becomes mandatory. It also allows the reporting team time to align their processes and infrastructure with the new requirements.
Here are some key considerations for how companies can approach a CSRD-aligned practice report:
1. Implement Double Materiality
One of the key requirements of the CSRD is the concept of a double materiality assessment (DMA), which looks at both how sustainability issues impact companies’ financial performance and how their operations affect the environment and society. At its core, a DMA identifies a company’s sustainability impacts, risks and opportunities (IROs) across its value chain. These material IROs become the topics required for disclosure under CSRD. Without a DMA, not only will your company not be able to identify key topics for reporting, it will be out of compliance with CSRD.
2. Conduct a Readiness Assessment
Start by assessing your company’s current sustainability data management and reporting practices compared to the CSRD requirements outlined in the European Sustainability Reporting Standards (ESRS), which companies must use when preparing their CSRD disclosures. ESRS contains general requirements all companies must follow, as well as topical requirements that will need to be reported on if found to be a material IRO for your business. In addition, scrutinize your internal reporting governance and approvals infrastructure to determine what adjustments need to be made.
3. Develop a Roadmap and Begin to Fill Gaps
Once the CSRD compliance gaps have been identified, work backward from your reporting deadline to develop and begin implementing a roadmap that prioritizes addressing the more complex or time consuming gaps. For example, because CSRD is a regulation, your company’s compliance team will need to be involved in the reporting process to a greater degree than they may have in the past. Including them and other key teams during the practice run reporting process will help you work out the kinks ahead of time. If you find large gaps in the availability or quality of material IRO data, use the practice run process to identify and work with the internal stakeholders responsible for the related area of business to address these gaps.
4. Centralize Data Management
Formalizing and centralizing sustainability data management across your company will streamline the CSRD preparation process. Departments across the company will contribute data for reporting, so establishing centralized sustainability data management infrastructure will ensure the data is clean, consistent, conformed, current, and comprehensive. And because CSRD requires third-party external assurance of all report content, this step will prepare your company for the rigors of this process.
5. Refine Through Iteration
Practice reporting allows companies to iterate their reporting processes before full CSRD compliance is required. Each reporting cycle provides valuable insights into what is working and what needs improvement across data availability, topics included, management and oversight, internal processes and approvals, and stakeholder engagement.
6. Prepare for External Assurance
Under CSRD, third-party assurance on all report data is mandatory. Engaging with external auditors during the practice run phase can help ensure your data systems are audit-ready. It also gives you the opportunity to identify any additional requirements or discrepancies before the official reporting deadline. Keep in mind that some EU Member States permit independent service providers such as Testing, Inspection, and Certification (TIC) companies to perform CSRD external assurance in addition to traditional accounting and audit firms, so looking into your options now can save you time and money when it’s time for assurance.
Conclusion
Implementing practice run reporting is a smart, proactive way to prepare for CSRD compliance. It allows companies to refine their sustainability reporting processes, identify gaps in data management and internal processes, and ensures you are ready for full compliance when the time comes. By following a phased approach, businesses can improve the quality of reporting and build confidence among stakeholders, demonstrating a commitment to greater transparency.
Taking action now—conducting a gap analysis, integrating double materiality, centralizing data management, iterating, and preparing for assurance—your company will be well-positioned to meet the rigors of CSRD.
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If you need support with regulatory reporting, Uplift can help. Reach out to hello@theupliftagency.com. Uplift is a sustainability and social impact consulting firm that works across all ESG issues. We help companies build, manage, report and communicate their sustainability strategy and performance.
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