Navigating CSRD reporting: Turning compliance into sustainable development with science-based metrics

Abstract

This manuscript explores how organizations can adapt to the new EU sustainability regulations, specifically focusing on the Corporate Sustainability Reporting Directive (CSRD). It highlights the distinct approaches to sustainability in academia and industry, and the role of regulatory governance in bridging these perspectives to promote sustainable practices. We argue that compliance with the CSRD requires a structured framework to guide sustainability assessments, ensuring reliability, comprehensiveness, manageability, and transparency. These principles support the creation of quantitative metrics for sustainability reporting, facilitating third-party verification and integrating sustainability into corporate governance. Key findings include the strategic benefits of using science-based metrics for sustainable business development and long-term value creation. The proposed framework enables reaching these benefits by balancing methodological rigor with contextual relevance. Hence, it bridges the gap between regulatory compliance and strategic business development. The adoption of a forward-looking approach not only ensures compliance but also enables leveraging sustainability reporting as a tool for strategic planning. While the framework introduces key principles to guide the sustainability assessment, further research is needed to develop specific guidelines and tools to facilitate the implementation of the proposed principles in the organizational contexts.