CSRD for finance: the complete guide for CFOs in 2026
Learn how CSRD reshapes the CFO role, aligning finance, sustainability, and audit within one regulated framework.
CSRD Timeline and Scope for Finance Teams
The 8 Critical Areas Where CSRD Impacts Finance
Key Metrics Finance Teams Must Track Under CSRD
How to Build a CSRD Finance System That Survives Audit
Technology Infrastructure for CSRD Finance Compliance
Why Dcycle is the Best Solution for CSRD Finance
Frequently Asked Questions (FAQs)
CSRD isn't another sustainability reporting checkbox. For CFOs and finance teams, it represents a fundamental change in how companies measure, control, and disclose their environmental, social, and governance performance — requiring financial-grade data governance, audit-ready controls, and direct integration with existing financial reporting infrastructure.
The stakes are concrete: CSRD requires external assurance, board-level sign-off, and integration with your annual report. Finance teams that treat it as a sustainability project will face costly rework when assurance begins. Those that treat it as an extension of financial reporting will build infrastructure that serves multiple strategic uses.
This guide explains everything CFOs and finance teams need to know about CSRD: what it actually requires, how it connects to your GL and consolidation, which disclosures have direct financial materiality, and how to build a system that passes audit without disrupting financial close.
Your consolidation perimeter, cost center structure, and financial close cycle already define most of the architecture CSRD requires. The gap is controls, traceability, and ESG data governance — not a separate system.
Quick win: map your top 5 financially material ESG disclosures to their source in the GL or ERP — and assign a finance owner for each one.
CSRD applies in phases. Large public-interest entities with more than 500 employees reported first for fiscal year 2024. Other large companies follow for fiscal year 2025. Listed SMEs have further time.
The regulation requires companies to report according to the European Sustainability Reporting Standards (ESRS), covering environmental, social, and governance topics with a double materiality lens: both how sustainability issues affect the company financially (financial materiality) and how the company affects people and the environment (impact materiality).
This is the foundation of CSRD and the first place finance teams must engage. Double materiality requires assessing both financial materiality (do ESG risks and opportunities affect the company's financial position?) and impact materiality (does the company have significant impacts on people and environment?).
For CFOs, this matters because: the double materiality assessment determines which ESRS disclosures are required. It directly connects sustainability risks to financial risk management, and its results must be consistent with risks disclosed in financial statements.
CSRD requires the same consolidation perimeter as financial statements. Every entity in your consolidated accounts is in scope for CSRD. This has immediate implications for data collection, controls design, and audit preparation across subsidiaries, joint ventures, and acquired entities.
CSRD requires external assurance — starting with limited assurance and progressing toward reasonable assurance over time. This means your ESG data needs the same audit trail, controls, and evidence as financial data. Auditors will test data sources, calculation methodologies, and internal controls.
CSRD requires the same consolidation scope as your financial statements. If an entity is in your consolidated accounts, it's in your sustainability statement. This isn't optional – it's a regulatory requirement.
For finance teams, this means ESG data must follow the same rules as financial data: subsidiaries, joint ventures, associates, perimeter changes, acquisitions, disposals. If your ESG scope differs from your financial scope, auditors will challenge it.
Practical implication: Your ESG data model needs the same dimensional structure as your GL – legal entity, site, cost centre, project – to enable proper consolidation and elimination.
Here's where it gets technical. ESRS disclosures must be coherent with assumptions used in financial statements. The IASB has published educational material explaining that while IFRS doesn't explicitly mention climate, if the effect is material, it must be reflected in judgments and estimates.
This affects specific IAS/IFRS areas:
IAS 36 Impairment: Transition scenarios (CO2 pricing, regulation, demand shifts) change cash flow projections and discount rates.
IAS 37 Provisions: Decommissioning, environmental litigation, onerous contracts for energy or compliance.
IAS 16 Useful Life and Residual Value: Equipment and plants exposed to regulatory obsolescence.
IFRS 9 (for financial entities): Climate risk as credit risk driver.
The critical point: If your transition plan (ESRS E1) says "X" but your impairment model uses "Y", the auditor will flag the inconsistency. Finance must enforce coherence between ESG narrative and financial assumptions.
The EU Taxonomy requires reporting the proportion of revenue, CapEx and OpEx associated with eligible and aligned activities, with templates and methodology defined in the Delegated Act.
This is purely financial work – it requires mapping your GL accounts, revenue streams, and capital projects to technical criteria. You can't delegate this to sustainability teams who don't understand your chart of accounts or project accounting.
Typical mistakes include treating it as qualitative classification and then "filling ratios". It must be the opposite: accounting mapping and documentation by activity, with clear traceability from GL to disclosed percentages.
CNMV has observed that many Spanish issuers don't use templates correctly or use them partially. This is a clear signal that supervisors are paying attention to format and methodology, not just narrative.
Double materiality under CSRD isn't a nice workshop – it's a defensible process that finance must control. EFRAG IG1 proposes a clear structure of identification, assessment and documentation that finance can convert into an audit trail: criteria, thresholds, sources, responsible parties, change log.
For finance, the key is translating ESG topics into financial drivers:
Framework for CFOs:
Value chain is the major pain point. ESRS requires reporting information from your value chain if necessary to understand impacts, risks and opportunities. But there's proportionality – the Commission clarifies when you can use estimates and the "value-chain cap" that limits demanding impossible data from SMEs in the chain.
Translation for finance: Define an internal standard for "acceptable data" (primary data, secondary data, estimation) and tie it to evidence and controls.
Meanwhile, your CSRD data feeds the financial system. The EBA has pushed Pillar 3 disclosures with KPIs like the Green Asset Ratio (GAR) and Banking Book Taxonomy Alignment Ratio (BTAR). For CFOs, this means banks and markets will demand more structured, comparable data, especially on Taxonomy and transition plans.
In capital markets, frameworks like Sustainability-Linked Bonds and Sustainability-Linked Loans raise the bar on KPI selection, definition, verification and reporting. Weak or manipulable KPIs penalise credibility and pricing.
CSRD requires external assurance (starting with limited, progressing to reasonable). This forces implementation of controls, owners, segregation of duties, evidence, reviews, and an "ESG close" similar to financial close.
Controls that typically make a difference:
COSO has published specific guidance for Internal Control over Sustainability Reporting (ICSR), and it's a highly applicable framework for mapping controls to processes (capture, calculation, review, publication).
At a global level, ISSA 5000 defines general requirements for sustainability information assurance engagements. In the EU, limited assurance standards are expected no later than October 1, 2026.
If you wait for "when they ask", you'll arrive too late. Design your process as if it will be audited from day 1.
If you're familiar with ESEF, the direction is clear: sustainability reporting will also require XBRL tagging. ESMA is working on ESRS XBRL taxonomy and technical framework adjustments so preparers without experience can adopt tagging.
Additionally, ESMA is focusing on materiality and coherence in its supervision priorities.
For finance and IT, this means designing data from origin thinking about "tagging", not at the end. You need data structure and tagging capability, not just a nice PDF.
Even if your company isn't a bank, your CSRD data becomes input for the financial system. Banks use it for credit risk assessment, green asset classification, and regulatory reporting, following emerging sustainable finance frameworks that link sustainability performance to access to capital.
In parallel, the ECB has announced it will integrate a "climate factor" in its credit operations from the second half of 2026, reinforcing the trend of incorporating climate into collateral, risk and financial decisions.
For CFOs, this translates to: Better ESG data = better financing terms, wider access to green finance, and lower cost of capital.
The most efficient CSRD implementation treats sustainability data as an extension of financial close — not a separate process. This means same consolidation perimeter, same cut-off dates, same review and approval controls, and same evidence retention standards.
Design an "ESG close" parallel to financial close:
COSO has published specific guidance for Internal Control over Sustainability Reporting (ICSR). Apply the same five components you use for financial ICOSO — control environment, risk assessment, control activities, information and communication, monitoring — to your ESG data processes.
Controls auditors will test:
CSRD requires consistency between sustainability disclosures and financial statements. If your transition plan assumes a carbon price of €X, your financial models must reflect that assumption. Auditors and investors will compare both documents.
Key alignment areas: carbon price assumptions in impairment models, climate scenario analysis connected to financial forecasts, transition CapEx aligned with financial planning, and supply chain risk reflected in working capital assumptions.
The EU Taxonomy requires calculating turnover, CapEx, and OpEx alignment with sustainable activities. This is a finance function — it requires direct access to the GL, asset register, and cost center data.
Build a taxonomy mapping that connects each business activity to its NACE code, then assess substantial contribution criteria and DNSH compliance. The finance team owns this calculation because it's built directly on financial data.
CSRD requires digital reporting with XBRL tagging using the ESRS taxonomy. Design your data model from the start with structured facts and tagging readiness — retrofitting structure into unstructured documents is expensive.
The problem: Treating CSRD as a sustainability project rather than a financial reporting obligation.
Why it costs: When assurance begins, auditors will apply financial audit standards to ESG data. Sustainability teams typically lack the controls knowledge, consolidation expertise, and ERP access that financial reporting requires.
Solution: Finance must co-lead CSRD implementation. The CFO should own the double materiality assessment, consolidation perimeter, EU Taxonomy KPIs, and assurance coordination.
If your CSRD transition plan projects a 40% emissions reduction by 2030 but your financial forecasts assume flat energy costs and no capital investment in decarbonisation, auditors and investors will flag the inconsistency. CSRD specifically requires alignment between sustainability disclosures and financial statements.
Rule: every material ESG assumption — carbon price, transition CapEx, climate risk — must appear consistently in both CSRD disclosures and the financial planning model.
The problem: Calculating Taxonomy KPIs (turnover, CapEx, OpEx) without direct linkage to financial data.
Why it costs: The Taxonomy KPI calculation is a finance exercise. Without GL-level mapping, the numbers can't be assured and reconciliation becomes a recurring problem.
Solution: Build the Taxonomy mapping directly in the GL or ERP. Every eligible activity should map to its NACE code and financial line item.
The problem: Running double materiality assessment as a workshop output without connecting it to financial risk management or financial statement disclosures.
Why it costs: The double materiality assessment must be consistent with the risks disclosed in financial statements. A disconnected assessment creates contradictions that auditors will flag.
Solution: Run double materiality with Finance, Risk, and Sustainability co-leading. Connect financial materiality thresholds to existing risk quantification frameworks.
The problem: Building first-year CSRD reporting in Excel or Word without audit-ready controls and evidence.
Why it costs: Retrofitting controls after the fact is more expensive than building them correctly from the start. Auditors will question every number without proper evidence.
Solution: Apply the same design principles as financial audit preparation: traceable sources, documented methodologies, segregation of duties, and evidence retention from the first reporting cycle.
The non-negotiable: Does the platform integrate directly with your ERP, GL, and financial consolidation system?
CSRD data must be consistent with financial data. A platform that requires manual re-entry of financial data creates reconciliation risk and audit exposure. Direct ERP integration is the difference between a defensible CSRD process and an expensive manual workaround.
The assurance test: Can every ESG KPI be traced back to its source with documented calculation methodology?
Look for: automated data lineage from source to disclosure, version control on methodologies and assumptions, segregation of duties in data approval workflows, and evidence storage linked to specific data points.
The regulatory test: Does the platform cover the full ESRS disclosure set and EU Taxonomy KPI calculation?
Not all ESG platforms are built for European regulatory requirements. Verify ESRS cross-cutting and topical standard coverage, EU Taxonomy substantial contribution and DNSH assessment, and XBRL tagging capability for digital reporting.
The group reporting test: Can the platform handle entity-level data collection, consolidation, and eliminations at the same perimeter as financial statements?
Group CFOs need entity-level data with rollup to group level, intercompany eliminations, currency conversion, and minority interest handling — the same structural requirements as financial consolidation.
Level 1: ESG data in spreadsheets separate from financial systems, sustainability team leading without finance governance, no assurance-ready controls.
Level 2: Defined consolidation perimeter, double materiality assessment complete, quarterly ESG close with finance oversight.
Level 3: ERP-integrated ESG data, COSO ICSR controls in place, EU Taxonomy mapped to GL, fully audit-ready from day one of assurance.
When choosing an ESG management platform for CSRD compliance, what really matters isn't just functionality – it's the ability to deliver a comprehensive, flexible solution oriented to the real value of ESG data.
We are not auditors or consultants. We are a Solution designed for companies that want to measure, manage and communicate their ESG impact simply and efficiently.
Our objective is clear: enable every organisation to collect all their ESG information and distribute it automatically to different use cases, without complications or manual processes.
We centralise environmental, social and governance data from any source – ERP, CRM, spreadsheets, internal systems – and convert it into standardised, traceable metrics ready for official reports.
Companies can generate documentation compatible with CSRD, SBTi, European Taxonomy, ISOs or any other standard in minutes.
Why Finance Teams Choose Dcycle:
Designed for Financial Rigour: We understand that CSRD is financial reporting. Our platform integrates with the systems and processes finance teams already use, delivering the same level of control and traceability as your GL.
Automated and Simplified: Everything works in the cloud, with no complex installations or technical development needed. In a few clicks, teams can visualise performance, identify improvement areas and prepare audit-ready reports.
Complete Traceability: Every metric links back to source evidence – invoices, meter readings, contracts, factor sources. This isn't just good practice, it's a requirement for external assurance.
Multi-Framework Support: Generate reports for CSRD, Taxonomy, SBTi, TCFD, IFRS S1/S2 and any other framework from a single dataset. No duplication, no inconsistencies.
Financial-Grade Controls: Role-based access, data validation rules, approval workflows and monthly/quarterly closing procedures similar to financial reporting.
Strategic, Not Just Compliance: We firmly believe sustainability should be a strategic lever for competitiveness, not an administrative burden. Our mission is clear: convert ESG data into smarter, more efficient and more profitable business decisions.
With Dcycle, finance teams can control their information, reduce costs, automate processes and guarantee complete traceability of their ESG indicators.
In a market where measuring well is the difference between moving forward and falling behind, our proposition is simple: make sustainability work as a real engine for growth.
When implementing CSRD, prioritise three core elements: consolidation consistency, audit readiness and financial coherence.
Consolidation consistency means your ESG reporting scope must match your financial consolidation scope. Same entities, same perimeter, same period – otherwise auditors will challenge it.
Audit readiness means building controls, evidence and traceability from day 1. Don't wait for the assurance requirement to kick in – design as if you're being audited now.
Financial coherence means assumptions in your ESG disclosures (carbon price, energy costs, regulatory timeline) must align with assumptions in your financial statements (impairment, provisions, forecasts).
Also ensure your solution integrates with ERP and financial systems, enables XBRL tagging, and scales as regulations evolve – without requiring major reconfiguration.
CSRD connects to financial statements through assumptions, estimates and disclosed risks. Although ESRS is separate from IFRS, if climate or social risks are material, they must be reflected in financial judgments.
Examples:
The critical rule: If your ESRS E1 transition plan says "X" but your impairment model assumes "Y", auditors will flag the inconsistency. Finance must enforce coherence.
The key difference is subject matter, but the rigour is the same.
Financial reporting focuses on financial position, performance and cash flows using accounting standards (IFRS, local GAAP).
CSRD reporting focuses on environmental, social and governance impacts, risks and opportunities using ESRS standards.
But both require:
For CFOs, the practical implication: Treat CSRD as an extension of your financial reporting process, not a separate sustainability project.
Preparing for CSRD assurance is similar to preparing for financial audit:
1. Design controls from the start: Don't wait for assurance to begin. Implement controls for data capture, calculation, review and approval now.
2. Build evidence architecture: Every datapoint must be traceable to source documents. Invoices, meter readings, contracts, supplier data, factor sources – all documented and retained.
3. Document methodologies: Clear procedures for how you calculate emissions, map Taxonomy activities, estimate value chain data, apply materiality criteria.
4. Run a dry run: Before your first assured report, conduct an internal audit or engage your auditor for a gap assessment. Identify issues and remediate before the real assurance begins.
5. Separate duties: Different people should capture, validate and approve data – just like financial controls.
Framework recommendation: Use COSO ICSR (Internal Control over Sustainability Reporting) as your control framework, and ISSA 5000 as your assurance standard reference.
Dcycle is built specifically for finance-led ESG reporting with the rigour and controls CFOs demand.
Complete integration: Direct connection to ERP, GL, procurement, utilities and logistics systems – no manual data entry.
Audit-ready evidence: Every number traces back to source documents with clear calculation methodology and version control.
Financial-grade controls: Role-based access, approval workflows, reconciliations and closing procedures similar to financial reporting.
Multi-framework compliance: Generate CSRD, Taxonomy, SBTi, TCFD, IFRS S1/S2 reports from a single dataset – ensuring consistency.
XBRL-ready: Structured data model designed for digital reporting and tagging requirements.
Most importantly, we're a solution, not a consultancy. We provide the technology infrastructure finance teams need to own their ESG data, control their processes and deliver audit-ready reports – without dependency on external advisors.
In a regulatory environment where measuring well is the difference between competitiveness and being left behind, Dcycle makes sustainability work as a strategic lever for finance, not an administrative burden.
Carbon footprint calculation analyzes all emissions generated throughout a product’s life cycle, including raw material extraction, production, transportation, usage, and disposal.
The most recognized methodologies are:
Digital tools like Dcycle simplify the process, providing accurate and actionable insights.
Some strategies require initial investment, but long-term benefits outweigh costs.
Investing in carbon reduction is not just an environmental action, it’s a smart business strategy.
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