Businesses across Europe and the Nordics struggle to collect and share the necessary data to comply with sustainability directives such as the Corporate Sustainability Reporting Directive (CSRD). Addressing this is important and urgent, as large publicly listed companies, insurance companies, and credit institutions (Public Interest Entities) with over 500 employees and covered by Non-Financial Reporting Directive (NFRD), must comply by 2024-2025, and publicly listed Small & Medium-sized Enterprises (SMEs) will need to do so by 2026-2027. Achieving compliance requires a high degree of transparency across a company’s span of activities, including their supply chain, which means that the companies’ suppliers also need to align with the regulations and requirements.
Findings suggest that complying with CSRD is a significant challenge for businesses and their sustainability- and reporting professionals. Many businesses have previously not been required to report on and share climate data, and therefore lack experience with the relevant datasets. The key challenges in relation to reporting, sharing and collecting climate data include:
Highly manual processes, including manual collection, sharing and management of climate data.
Non-standardized data and calculation methods – data exists in silos throughout the supply chain, and in different formats. In addition, multiple approaches exist for calculating the required data.
Current data (multiple) formats and structures make it difficult to integrate data across systems and difficult to automate processes of collecting, sharing and reporting on climate data.
Limited experience, knowledge and collection of climate data in many SME’s.
These challenges and in particular the lack of standardized systems and data formats for exchanging information between businesses (B2B) means that companies need to find their own solutions to this challenge, which is proving to create a significant administrative burden for SMEs.
This project investigates how the burden of calculating and exchanging climate data can be reduced through Nordic cross-border collaboration, leveraging existing infrastructures, eDocuments and automation. The main body of work for the project has been developed through three interactive workshops, with relevant representatives from the Nordic countries. The workshops were conducted in the fall of 2024, and the objectives were to identify datapoints, mockups and integration solutions for climate reporting within existing digital infrastructures.
Through the 3 collaborative and explorative workshops, 13 recommendations were outlined. These recommendations can be segmented in four interconnected areas. For some of these, the project team have further substantiated the recommendations by drawing on relevant research. The 4 interconnected areas are:
Leveraging Existing Infrastructures and Frameworks to ensure scalability, interoperability, standardization of climate datapoints, and promote adoption by businesses.
Utilizing eDocuments, Standards and Classification for consistent and efficient climate data exchange.
Securing Reliability and Process Management by using existing workflows and systems wherever possible. This further aims to reduce redundancies and risks associated with the implementation process.
Aligning Calculation Methods and Guidelines to improve uniformity and comparability.
Implementing these recommendations will standardize climate data, enable automation and increase efficiency in collecting, sharing, and reporting climate data across systems. This not only helps businesses comply with CSRD but also positively contributes to optimized decision-making and (potentially) cost reduction in such areas as green procurement, supply chain transparency, and climate emission calculation.
For the recommendations to be effectively implemented, cross-border Nordic collaboration must continue and ideally be strengthened. The primary goal should be to explore the opportunities for standardization and leveraging digitalization and automation in climate documentation and reporting. The collaboration should explore and test ways to operationalize the standardized and automated exchange of data and expand focus to include other Environmental, Social and Governance (ESG) topics. This approach will elevate alignment across a broader sustainability area and enable collaboration with a wider network of experts and communities. The collaboration should, ideally, be anchored in established domains responsible for digitalization and sustainability initiatives.