More than 94% of European companies covered by the Sustainability Reporting Directive (CSRD) comply with compliance requirements. However, only 65% of them turn their reporting into a strategic management tool, shows a study by Horváth, an international management consultancy company active in Romania since 2005.
Among the most frequently reported topics are climate change (E1), resource use and circular economy (E5), and own workforce (S1) – these are also the areas in which concrete targets are most often set. In contrast, topics related to biodiversity (E4), affected communities (S3) or end consumers (S4) are rarely accompanied by measurable targets, although they are reported as relevant.
In the context of sustainable reporting, “material topics” are those topics that reflect the significant impacts of a company’s activity on the environment, society or economy and that can influence the decisions of stakeholders. CSRD requires the application of the “dual materiality” principle: both from the perspective of the impact on the company (financial materiality) and the company’s impact on the environment and society (impact materiality). However, the Horváth study shows that only a fraction of companies provide a detailed description of the dual materiality analysis process, and even fewer set clear objectives for the topics identified as essential.
On average, each company reported 39 IRO topics (impacts, risks and opportunities), of which 63% are impacts (mostly with negative impact), 25% are risks and only 12% represent opportunities. The focus is therefore on compliance and risk management, rather than on identifying the strategic benefits of sustainability.
Over 50% of companies refer to the UN Sustainable Development Goals (SDGs) in their reports, especially in the financial, retail and consumer goods sectors, industries where investor pressure is most pronounced.
The Greenhouse Gas Protocol (GHG Protocol) is the dominant standard for reporting CO2 emissions. Companies with high emissions intensity – such as energy, automotive or chemicals – tend to report more categories of emissions, while companies in technology, financial services and insurance provide lower levels of detail, reflecting a different ability to integrate CSRD requirements depending on the business model.
“Technical compliance is not enough. The companies that will make a difference in this new era of transparency are those that use sustainability reporting as a tool for governance, strategic integration and investor communication. To bring real value to the business, sustainability needs to be integrated into performance and risk management, as well as internal control systems, while reporting efficiency can be increased through automation and artificial intelligence,” says Sergiu Cărată, Senior Project Manager, Horváth Romania.
The average size of a sustainability report is 125 pages, and 80% of them exceed 80 pages. According to Horváth, the optimal number of pages for a sustainability report is between 80 and 160 pages, a size that would allow addressing all essential topics (material topics).
The “CSRD Study 2025” was based on the analysis of 100 sustainability reports, published by March 21, 2025, prepared by companies from 14 European countries (including 3 from outside the EU: Switzerland, Norway, United Kingdom), from nine industries (technology and telecom, automotive, banking and financial services, energy, insurance, retail and others). Distribution of companies by size: 31 have under 10,000 employees, 36 between 10,000 and 50,000, and 33 over 50,000 employees.