The approaching July 2025 submission deadline for the first round of reports compliant with the Corporate Sustainability Reporting Directive (CSRD) is forcing companies to reimagine how they disclose information about their sustainability efforts. (Previous blog posts in this series have introduced CSRD and laid out the opportunities and challenges.) But the impact CSRD has on sustainability communications will be much broader, affecting how companies talk about environmental, social, and governance (ESG) issues to all their stakeholders and across platforms.
The good news is that many of the effects of CSRD in the communications space will be positive. CSRD is likely to increase both companies’ confidence in sharing their data and the range of sustainability stories that are being told. The flip side of these shifts, however, is that it’ll become more difficult than ever for any individual company’s message to stand out. But don’t despair! The final section of this blog post will introduce some ways in which companies can cut through the noise. We’ll go into more detail on this issue at our October 15 webinar. We hope to see you there.
CSRD will transform sustainability communications
Companies should underestimate neither the significant effort required to comply with CSRD nor the far-reaching impact of this new regulation on business practices. Communications is no exception. This section lays out four ways in which CSRD will change the landscape of sustainability communications.
The way businesses talk about sustainability will evolve
A key aim of CSRD is the enforced integration of financial and nonfinancial disclosures. CSRD will force companies to include a broad suite of ESG data in either their annual or management reports. And reams of data tables won’t cut the mustard; companies may have to provide narrative disclosures—that is, full paragraphs—to explain the relationships among sustainability, financial, and risk information (see, for example, paragraph 124 of European Sustainability Reporting Standard 1).
These new narrative disclosure requirements will force companies to think explicitly about how their sustainability strategies relate to their overall business strategies. Inevitably, this will also affect how they talk about these issues. The days of sustainability communications being a monthly tweet about a green initiative are over. Instead, ESG issues will increasingly run through every aspect of the way companies present themselves.
The use of (verified) data will increase
CSRD compliance will require companies to undertake a third-party audit of their ESG data. While preparing for this process is currently a source of considerable stress for many companies, this CSRD requirement will go a long way toward addressing what has long been a major issue within sustainability communications: the fear of being accused of greenwashing.
High-profile greenwashing accusations and punishments have made many companies wonder if putting information—even positive information—out into the public realm is worth the risk. Recent research from South Pole finds a striking disconnect in companies’ belief in the value of talking about their climate ambitions and their confidence in doing so. They find that 81 percent of companies know that communicating net zero is good for their bottom line but that 58 percent are planning to decrease their level of external communications.
CSRD’s assurance requirement will, however, provide companies with confidence in—and the ability to offer independent evidence to back up—their sustainability claims. Therefore, starting next year, we should expect to see fewer vague and generic statements of support for ESG issues and more data-backed evidence of real commitment and achievement.
We will hear a broader range of sustainability stories
CSRD will force companies to disclose the good, the bad, and the ugly. Companies may feel the need to communicate more intensely to reassure stakeholders about any potentially concerning aspects of their CSRD disclosures. This impetus—and the broader culture of transparency that may result from CSRD—could open up genuine space for companies near the start of their sustainability journeys to communicate honestly about the highs and lows they experience along the way.
The result could be a brave new world in which a much broader range of companies feel empowered to use sustainability communications as a way to build trust with their stakeholders.
It will be harder than ever to stand out
We have just seen that more companies are likely to be communicating about sustainability in a way that is more specific and better integrated with their overall business strategies. While these are positive developments, they will make it more difficult for any individual company’s message to cut through. A clear, data-backed communications strategy will be more important than ever.
How can businesses get ahead of these changes?
This is a big and important topic, and we’ll share more on winning communications strategies in future blog posts. But businesses that want to make sure they’re being heard in an increasingly crowded communications landscape should start by ensuring that they are following four principles:
- Be proactive in preparing for regulatory changes: A comparatively small proportion of the companies who will need to report under CSRD will have to do so in 2025, but this is no excuse for complacency. CSRD represents both a substantial challenge and a substantial opportunity, which means that companies not already preparing risk both running out of time and missing out on first-mover advantages. Companies should already understand the requirements and their current gaps, getting their data infrastructure in place, educating stakeholders, and developing a clear road map for ensuring compliance.
- Stress test your communication and content strategy: Companies will need to develop a clear strategy for how they will convert regulatory compliance into targeted and compelling storytelling. Want to know how good your current content strategy is? LEFF’s Content Compass is a new (free!) diagnostic tool that provides a snapshot of how a company’s content operations are performing. It rapidly assesses strengths and weaknesses across the entire content life cycle, from content strategy to development, production, activation, and measurement. It’s intended to quickly identify areas for improvement so resources can be deployed to maximize ROI. This assessment can help you convert your powerful ideas into a competitive edge.
- Ensure you have access to the right skills and expertise: Taken together, the shifts described in this blog add up to a radical change in both the tenor and frequency of sustainability communications. There is a risk that the magnitude of the challenge that CSRD poses could swamp internal resources. Companies will need to adopt a strategic approach to setting priorities, retaining additional data collection and communications capacity, and establishing a clear process for collaboration.
- Design your report with an eye to reusing and repurposing content: Recycling isn’t just a good environmental practice. It can also be part of a winning communications strategy. CSRD-compliant reports will be huge repositories of information, which can be used as the basis for a wide range of content assets. Companies that design their annual reports or ESG reports with this opportunity in mind will be able to significantly increase the return on their regulatory compliance investment.
CSRD will permanently change the ways in which companies talk about sustainability. For the most part, these changes will be for the better, enabling more frequent and more honest conversations about where we are—and where we need to be. This opening up of the communications space will, however, raise the bar for truly distinctive content. We’re excited to continue helping our clients meet that mark.
Ready to learn more about the impact of CSRD on sustainability communications? Register for our virtual event below.