What CSRD best practice looks like – for retailers
13 Feb 2025
As the implementation of CSRD continues to gather pace, we explore the key barriers to success and what ‘good’ looks like for retailers when it comes to successfully evidencing their sustainability performance.
It’s been two years since plans for the CSRD were first unveiled, with this year being a pivotal year for some businesses, who are expected to start reporting on their Environmental, Social and Governance (ESG) for the 2024 financial year.
Full implementation of the CSRD for the retail sector is set to take place next year. And the good news is, positive changes are already starting to be seen. For instance, 85% of retail Chief Experience Officers have ramped up their sustainability investment in an effort to boost customer satisfaction, operational efficiency and supply chain resilience.
But while many studies demonstrate there is an appetite among many companies to become more sustainability-focused, not all of them have all of the necessary processes and measures in place to embark on their CSRD journey. According to research published by PwC, just 4% of companies required to start reporting this year, are ready to publish their CSRD reports. Meanwhile, 5% are yet to start CSRD implementation, and only slightly over half (56%), are fully familiar with the CSRD and ESRS requirements.
While the CSRD may have been looming on the horizon for a while, delivering on the vision of adopting a forward-thinking CSRD mindset is not without its challenges. Collectively, these challenges can potentially hamper retailers’ ability to collect and analyse all of the data that is required for full CSRD compliance. Some of the biggest challenges include:
Patchy & inconsistent supplier details – having to rely so heavily on obtaining suppliers’ ESG data from multiple sources exposes retailers’ supply chains and ability to complete their CSRD-reporting picture. Interestingly, lack of access to relevant data was cited as being a key barrier by the World Retail Congress in its Our Planet report.
Lack of commitment – in the same Our Planet report, almost 50% of retailers said they do not believe that transformational change is needed to reach sustainability performance targets. However, CSRD reporting is a collective effort that spans entire companies, their suppliers, partners and beyond...
Embracing change – it is widely recognised that accurate CSRD compliance cannot be achieved without fundamental changes being implemented across the entire retail landscape. But according to Deloitte, updating/relocating facilities to make them more resistant to climate impacts, is a trickier needle-moving action and sticking point for 38% of respondents.
Catherine Beare, Intertek Regional Director for Business Assurance UKI & Iberia, explains:
“The key to being CSRD-compliant is data. And that data has to be integrated from across all different stages of the business, which can be a minefield to navigate when complex and diverse supply chains are involved.
“To add to this, the data has to evidence everything - from CO₂ emissions, energy and water consumption to social issues, such as employment policies. Each and every key area must be verified and reported upon clearly and consistently.
“However, the concept of sustainability reporting isn’t anything new to retailers. It is something they have been required to do for some time now (e.g. reducing Scope 1 and 2 emissions), which should hopefully give them a bit of a head start over other sectors.
“It’s just that now, retailers need to build on their initial reporting by ramping up their data insights and looking at how weaving in technology can help them future-proof their ESG reporting from that crucial CSRD angle.”
What this looks like from a best practice perspective...
As previously mentioned, the retail sector is no stranger to sustainability. In fact, it has been widely recognised as leading the way for other industries to follow, which is frequently highlighted by the National Retail Federation’s annual convention and dedicated Center for Retail Sustainability.
Given the extensive range of businesses that exist within the sector, there is no ‘one size fits all’ approach to navigating the growing landscape of sustainability integration. However, there are core fundamentals retailers can build upon to achieve strategically-driven results.
The 3 core fundamentals for building sustainable retail operations
- Sustainability is a journey
Every business is at a different point within its journey towards becoming truly sustainable. The most forward-thinking companies look at the pioneers and follow in their footsteps, learning from their lessons and adapting their strategies along the way. - It cannot be successfully achieved in isolation
Sustainability is a group effort. Every role within the retail sector can be rethought or otherwise transformed from a sustainability perspective. The most effective sustainable development actions involve the expertise of multiple people and departments and are underpinned by pioneering technology. - Sustainability means different things to different people
Sustainability needs differ from one customer to the other. Some pay attention to packaging whole others focus on the overall carbon footprint. Meanwhile, it has been widely reported that Gen Z shoppers are prioritising their sustainability considerations when making purchases.
Fortunately, retailers have been ahead of the sustainability curve for several years now. However, the CSRD reporting clock is ticking – now’s the time for the sector to build on its successes, develop the processes and invest in the software that is required to help businesses to continue to set the very best sustainability-focused example.
More information
For more information about the CSRD and the implications for organisations, visit our dedicated Corporate Sustainability Reporting Directive Resource Hub, which includes a wealth of webinars and podcasts with our experts, FAQs, factsheets and more.
