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Corporate Adaptation to Sustainability Reporting: Evaluating CSRD's Influence on Company Policies

Gurbanova, Zinyat LU (2024) In IIIEE Master Thesis IMEM01 20241
The International Institute for Industrial Environmental Economics
Abstract
Sustainability reporting has shifted from voluntary to mandatory in the EU under the CSRD
requiring companies to adopt a double materiality perspective and adhere to common reporting
standards known as ESRS. This regulation aims to enhance transparency, reliability, and
comparability of sustainability data, fostering more sustainable business models and changing
established management practices.
This thesis explores how mandatory sustainability reporting impacts established management
practices, particularly corporate policies, focusing on three main questions: How do current
policies match the new requirements? What challenges do companies face? What strategies can
help them adapt?
An interdisciplinary, exploratory research... (More)
Sustainability reporting has shifted from voluntary to mandatory in the EU under the CSRD
requiring companies to adopt a double materiality perspective and adhere to common reporting
standards known as ESRS. This regulation aims to enhance transparency, reliability, and
comparability of sustainability data, fostering more sustainable business models and changing
established management practices.
This thesis explores how mandatory sustainability reporting impacts established management
practices, particularly corporate policies, focusing on three main questions: How do current
policies match the new requirements? What challenges do companies face? What strategies can
help them adapt?
An interdisciplinary, exploratory research design was utilized, incorporating a case study and
external interviews to collect empirical data. The findings reveal that CSRD significantly
influences corporate policies, leading to the creation of new policies and more structured
management of material topics. It prompts a reassessment of policy hierarchy, especially in
decentralized organizations. There's a shift from broad commitments to detailed objectives on
impacts, risks and opportunities. Challenges identified include adapting organizational
structures, planning processes, educating decision-makers. Adapting business conduct and
workforce policies is relatively straightforward due to minimal gaps with ESRS requirements.
However, emerging topics like climate change, circularity, and supplier management pose
greater challenges. Key conclusions suggest that successful CSRD implementation requires a
comprehensive understanding of reporting regulations, conducting double materiality
assessments, strategic planning, agility and stakeholder education. Companies should engage in
rigorous planning, raise awareness internally and among suppliers, and continuously educate
corporate decision-makers.
This study provides valuable insights into the effects of mandatory sustainability reporting on
corporate policies and highlights the need for future research on the long-term impacts of such
regulations on corporate governance and management controls. The findings offer practical
recommendations for companies to navigate the new regulatory landscape effectively. (Less)
Please use this url to cite or link to this publication:
author
Gurbanova, Zinyat LU
supervisor
organization
course
IMEM01 20241
year
type
H2 - Master's Degree (Two Years)
subject
keywords
sustainability reporting, CSRD, management controls, ESRS implementation, corporate policies
publication/series
IIIEE Master Thesis
report number
2024:27
ISSN
1401-9191
language
English
id
9164263
date added to LUP
2024-06-25 13:29:06
date last changed
2024-06-25 13:29:06
@misc{9164263,
  abstract     = {{Sustainability reporting has shifted from voluntary to mandatory in the EU under the CSRD
requiring companies to adopt a double materiality perspective and adhere to common reporting
standards known as ESRS. This regulation aims to enhance transparency, reliability, and
comparability of sustainability data, fostering more sustainable business models and changing
established management practices.
This thesis explores how mandatory sustainability reporting impacts established management
practices, particularly corporate policies, focusing on three main questions: How do current
policies match the new requirements? What challenges do companies face? What strategies can
help them adapt?
An interdisciplinary, exploratory research design was utilized, incorporating a case study and
external interviews to collect empirical data. The findings reveal that CSRD significantly
influences corporate policies, leading to the creation of new policies and more structured
management of material topics. It prompts a reassessment of policy hierarchy, especially in
decentralized organizations. There's a shift from broad commitments to detailed objectives on
impacts, risks and opportunities. Challenges identified include adapting organizational
structures, planning processes, educating decision-makers. Adapting business conduct and
workforce policies is relatively straightforward due to minimal gaps with ESRS requirements.
However, emerging topics like climate change, circularity, and supplier management pose
greater challenges. Key conclusions suggest that successful CSRD implementation requires a
comprehensive understanding of reporting regulations, conducting double materiality
assessments, strategic planning, agility and stakeholder education. Companies should engage in
rigorous planning, raise awareness internally and among suppliers, and continuously educate
corporate decision-makers.
This study provides valuable insights into the effects of mandatory sustainability reporting on
corporate policies and highlights the need for future research on the long-term impacts of such
regulations on corporate governance and management controls. The findings offer practical
recommendations for companies to navigate the new regulatory landscape effectively.}},
  author       = {{Gurbanova, Zinyat}},
  issn         = {{1401-9191}},
  language     = {{eng}},
  note         = {{Student Paper}},
  series       = {{IIIEE Master Thesis}},
  title        = {{Corporate Adaptation to Sustainability Reporting: Evaluating CSRD's Influence on Company Policies}},
  year         = {{2024}},
}