Redefining sustainability reporting processes and structures

Purpose: Following the implementation of the Corporate Sustainability Reporting Directive (CSRD) in the EU, the number of organizations required to report sustainability information has increased significantly. As the accompanying European Sustainability Reporting Standards (ESRS) indirectly require companies to integrate material sustainability aspects in management processes and decision-making, this paper analyses how companies can strategically design and adapt their sustainability reporting structures and processes. Design/methodology/approach: To analyse how first-time preparers can integrate and implement sustainability reporting processes and structures, interviews with 13 sustainability managers from German companies and 7 consultants and auditors were conducted. Findings: The findings indicate, that sustainability needs to be integrated into the organization’s management and decision-making processes requiring a sustainability management system to be implemented. This should lead to the sustainability report becoming a by-product of the sustainability management system. For this, a balance between centralized and decentralized sustainability structures and management is crucial. However, the greatest constraint to this are time pressure and limited resources. Originality/value: The changing regulatory landscape in the EU regarding sustainability reporting opens a new research field. This paper addresses the current challenges of first-time preparers. By combining interview data from both preparers and consultants, a broad practical perspective is generated and supplemented by theoretical insights from organizational design to provide practical implications addressing the need to (re-)define sustainability reporting structures and processes.