The EU’s Corporate Sustainability Reporting Directive (CSRD) draft, which underwent public consultation during the first half of 2022, has attracted widespread attention across industries, investor circles, and civil society groups. The feedback collated and analyzed by mid-2022 presents, in some ways, a surprisingly coherent set of demands, though naturally the nuances are where things get interesting. CFOs and reporting officers who have so far treated this as a regulatory compliance exercise might want to pause for a moment. The emerging consensus, or at least the weight of sentiment, suggests that stakeholders expect reporting to serve as much more than a disclosure formality. There’s a clear push for transparency to move beyond checklists and into the realm of genuine accountability, particularly when it comes to complex areas like Scope 3 emissions and supply-chain risks.
It’s worth reflecting for a moment on what the public feedback revealed. While respondents spanned the usual spectrum—from large corporates and trade associations to NGOs and private citizens—the pattern of concern was, perhaps unexpectedly, consistent. The bulk of contributors, including even some industry groups typically wary of disclosure burdens, called for greater granularity in Scope 3 reporting. The message was that investors, regulators, and the public at large need to see not just high-level commitments but detailed data on upstream and downstream impacts. And though it wasn’t framed quite so bluntly, the subtext felt clear enough: too many sustainability reports today remain glossy brochures, heavy on aspiration, light on verifiable substance.
This insistence on better Scope 3 transparency seems to place particular pressure on CFOs, who will ultimately oversee the systems that generate, aggregate, and validate the required data. Finance teams accustomed to handling traditional financial metrics may find themselves on unfamiliar terrain here. The stakeholder feedback repeatedly highlighted that Scope 3 disclosures are often inconsistent, methodologically opaque, or outright absent—especially in sectors where supply chains stretch across multiple jurisdictions and involve a cascade of indirect emissions. This is the area, if any, where stakeholders seem to expect the most noticeable improvement under CSRD.
But here’s where things get tricky. The public consultation also brought to light a certain tension between ambition and feasibility. On the one hand, there’s a widespread appetite for more comprehensive reporting. On the other, many respondents acknowledged—somewhat uneasily—that achieving this will demand substantial investments in data systems, staff training, and third-party verification. Some business groups flagged the risk of creating frameworks that sound good on paper but prove impossible to implement rigorously at scale. This is not, to be fair, an argument against enhanced disclosure. Rather, it’s a caution that the directive must balance ambition with practicality, or risk fostering box-ticking behavior.
For CFOs trying to chart a path forward, one starting point might be to map their current reporting architecture against these emerging stakeholder priorities. That means taking a hard look at how Scope 3 data is currently gathered—if at all—and identifying where the biggest gaps lie. Some firms may find that they’re already collecting a surprising amount of relevant information, albeit in fragmented systems or in forms not easily translated into formal reports. Others may discover that entire categories of emissions or impacts remain unquantified, perhaps because the data sits with suppliers or distributors beyond easy reach.
This, in turn, points to the importance of engaging with suppliers and other value-chain actors early. One recurring theme in the feedback was the call for companies to demonstrate not just what they know today, but what plans they have to improve knowledge and control over time. Stakeholders seem willing to accept that some data will initially be rough or incomplete—provided there’s a clear roadmap for closing those gaps. CFOs, together with their sustainability counterparts, might consider publishing staged targets or improvement plans alongside their disclosures. That could go some way toward managing external expectations while still showing good faith effort.
As firms prepare draft responses or internal frameworks aligned with the CSRD, the EFRAG open comment platform offers a useful venue for stress-testing ideas. Several respondents to the 2022 consultation pointed out that engaging with this platform not only allows companies to shape the evolving standards but also helps demonstrate proactive commitment to transparency. CFOs might coordinate cross-functional teams—finance, legal, sustainability—to draft detailed feedback that reflects both operational realities and stakeholder priorities. And, importantly, they should monitor how EFRAG updates its guidance based on this input, adjusting their reporting frameworks accordingly.
Navigating this landscape will require a delicate balancing act. There’s no denying that the CSRD represents a significant ramp-up in reporting expectations, particularly in areas where data is complex, hard to access, or both. Yet the consultation feedback suggests that companies delaying action in the hope of simpler requirements may find themselves on the back foot. The direction of travel is clear enough: more disclosure, deeper detail, greater accountability. The real question is how firms choose to get there—through incremental system upgrades, wholesale redesigns, or some combination of the two. The coming months will, no doubt, offer further signals as EFRAG digests the feedback and moves toward finalizing the standards. And that, of course, will only be the beginning of the story.