Sustainability Reporting: Challenge for Businesses in 2024

In 2024, the business landscape is poised for a pivotal transformation with the introduction of the Corporate Sustainability Reporting Directive (CSRD), a European reporting mandate in the realm of sustainability. This directive will not only compel large enterprises but also medium-sized and small publicly traded companies to disclose their sustainability performance. While it promises to expedite the sustainability drive in the corporate world, many companies are grappling with uncertainty and challenges in its implementation, according to ABN AMRO.

A survey among entrepreneurs reveals that, despite the imminent enforcement of the CSRD in 2024, two-thirds of companies have never heard of this directive. This lack of awareness is noteworthy given its broad impact, even on smaller businesses within the value chain. Sectors like Industry and Financial and Business Services demonstrate more familiarity with the CSRD, but awareness remains low in other sectors.

Opportunities and Concerns Among Entrepreneurs

Entrepreneurs aware of the CSRD are divided on its impact. In the financial and business services sector, many see opportunities to showcase their distinctiveness, while trade, logistics, and hospitality view the directive more as a challenge. Companies in the industry and construction sectors perceive both opportunities and challenges. It appears that the CSRD is compelling businesses into a dichotomy, where their competitive position is influenced by the success of reporting on sustainability performance.

Economic Challenges in 2024

The economic landscape in 2024 is characterized by modest growth and challenges across various sectors. While the retail sector benefits from an expected purchasing power growth of 1.8%, a higher interest rate is putting pressure on business activity in construction and industry. Labor shortages remain a pervasive issue, particularly evident in sectors like hospitality, healthcare, and cleaning, where approximately 40% of entrepreneurs experience workforce shortages as a hindrance.

Therefore, the CSRD not only introduces new reporting obligations but also intersects with broader economic and structural challenges. It is crucial for companies to be cognizant of these changes and prepare timely to align their sustainability performance with the forthcoming directive.

Abnamro.nl