In our daily work as sustainability consultants, we repeatedly come across a fundamental question that concerns companies in the context of the Corporate Sustainability Reporting Directive (CSRD): Should data collection begin before or after conducting the double materiality analysis (DMA)?

Based on our experience, we would like to give you a serious recommendation: Start collecting data as early as possible.

Why immediate data collection makes sense

The double materiality analysis is undoubtedly a critical step in defining the scope of CSRD reporting. It requires extensive analytical work and takes a lot of time - time that can be used in parallel for data collection. Here are some reasons why an early start is beneficial:

1. Preparation for the familiarWhile the DMA finalizes the specific reporting requirements and ESRS standards that are relevant to your company, there are standards that will most likely apply to most companies. For example:
   • ESRS 2 (cross-cutting issues) is mandatory for every company covered by the CSRD.
   • Although ESRS E1 (Climate Change) is not considered mandatory, a comprehensive justification is required in the sustainability report if this standard is not considered material.
   • ESRS S1 (own employees) is also not mandatory, but it is difficult to argue that own employees are not material.
2. Complexity of data requirements: ESRS E1 reporting, for example, requires data on the company's total energy consumption and greenhouse gas emissions (Scope 1, 2 and 3). These metrics require a well-defined methodology for data collection and calculation, which should not be developed hastily.
3. Use parallel processes: Many companies I work with have already started to process the DMA in parallel with multiple work streams based on already known requirements. This allows them to move forward more efficiently and reduces the pressure as the official reporting period approaches. Examples include participation in the CDP or other sustainability ratings such as EcoVadis.

Recommendations for efficient preparation

If your company is new to sustainability reporting, do not underestimate the effort required to report the necessary data points for CSRD. Start collecting data early and use the time effectively to:

• Establish guidelines and processes that ensure consistent data collection and processing.
• Set up the technical systems necessary to efficiently collect and analyze the data.
• Conduct internal and external training to ensure that all stakeholders understand how the data should be collected, processed and reported.

The bottom line: Timely, legally compliant reporting

Companies that start with multiple processes at once and don't wait until the DMA is complete will be better prepared and less stressed when the reporting requirements come into effect. Start preparing now for the upcoming requirements to ensure that your company is not only compliant, but also actively contributing to sustainability.

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