Businesses Face Billions in Additional Annual Costs From EU Sustainability Reporting
5th of March 2024
Fresh Finnish solution reduces costs by up to half. CFOs should take an interest in sustainability reporting, as its digitalisation leads to significant savings, says Sanna Perkiö, Chair of the Board at Ecobio.
CFOs and CEOs of companies employing over 250 people or with a turnover of €50 million will soon face new requirements. There is a lack of expertise, and costs are increasing. A company of this size must gather information on its environmental and social impacts much more accurately from the beginning of next year on the EU territory – and report them by 2026. In Finland, the new EU Corporate Sustainability Reporting Directive (CSRD) imposes new obligations on up to 800 companies.
The EU’s sustainability directive lists 84 reporting requirements and over 1100 data points. The total administrative costs for the first reporting for large companies in the EU will be approximately €1.7 billion in initial costs and €1.9 billion annually in recurring costs. In addition, companies must verify reports by an external auditors, which is estimated to result in up to €4 billion in additional annual costs. Verification costs will increase in the future. “I see that estimate as conservative. Costs can also be much higher,” says Dr. Sanna Perkiö, who has decades of experience in environmental and sustainability consulting.
The first complete solution for CSRD reporting keeps reporting costs in check and complies with laws and regulations
Perkiö runs a Finnish sustainability consultancy called Ecobio, which she founded, employing over 60 experts with over 35 years of experience. Ecobio unveiled a comprehensive solution for EU sustainability reporting on Tuesday, March 5th. With Ecobio Manager’s new extension, mandatory new reporting costs can drop by up to half. This is reportedly the first such comprehensive CSRD reporting solution in the whole of Europe. The new reporting standards may lead to a company with a revenue of one hundred million euros to increase reporting expenses totalling one million euros. However, implementing Ecobio Manager’s CSRD-reporting software could result in annual savings of half a million euros for such a company. “It’s probably not a good idea to permanently use expensive audit consultants, clumsy accounting systems or your own excel worksheets, but rather use an AI-based software developed specifically to manage the more than 1,000 data points for CSRD reporting, and which stores the data in the cloud. Now is the time to digitalise reporting,” says Sanna Perkiö.
Ecobio Manager has 10,000 users in all Nordic countries, Estonia, and Germany. Client companies can input the necessary sustainability reporting data into the software themselves, as the continuously updated Ecobio Manager always contains the latest environmental requirements and legal databases. By using the CSRD tool the annual sustainability report is generated through an efficient writing process in the system (and) with compiled data. Information is readily available even if the company’s environmental or sustainability experts change.
Ecobio Ltd. provides expert services in sustainable development and the Ecobio Manager cloud service for business. We are the oldest consultancy specialized in environmental management and sustainable development in the Nordics. We have been awarded twice for our innovation. We have successfully implemented many novelty projects for demanding clients since 1989.
