CSRD benchmark shows focus on impact, not on risks and opportunities

De Vries and Van Veen’s aim was to expose similarities and differences in the ESG reporting. To do this, they compared the reports of twelve financial institutions, eight of which from the Netherlands and four from surrounding countries, including BNP Paribas, Allianz and Commerzbank.

The implementation of the CSRD has had a significant impact on what financial institutions report and the way in which they do so, the researchers note. This is evident from the scale alone. For example, Commerzbank's sustainability statement was more than 250 pages long, excluding appendices.

‘Something that stands out is that all of the banks and insurers studied focus primarily on three themes: climate change, their own staff and consumers and end users’ says Van Veen. These are the themes on which the companies see a positive or negative impact. According to Van Veen, it is not very surprising that these themes stand out. ‘Climate and staff are relevant to every organisation,’ he says. ‘The third main topic can also be logically explained: this concerns banks and insurers, and these are their customers.’

Double materiality

The researchers then looked at the IROs that the banks and insurers mentioned in their reports: impact (positive or negative), risks and opportunities. This revealed that two thirds of the IROs concern impact materiality, the impact of an organisation on people and the environment. Only one third concerns financial materiality, the impact of a social theme on the financial performance of the organisation.

Van Veen: ‘That is an interesting observation because the CSRD emphasises both perspectives, financial and impact materiality. We had expected, because of this double materiality, that perhaps more risks and especially opportunities would be included, but that does not appear to be the case. The companies have taken a good look at the

impact materiality that they have, identifying almost as many positive as negative impacts – and I think that is great. I conclude from this that the subject has really been looked at carefully.’

Concrete impact, risks and opportunities

‘At the same time, we note that the IROs could be further specified across the board,’ Van Veen continues. ‘The in-depth analyses for this are often still lacking. We also see that the loss of value of assets due to climate change is seen as a major risk, but at the same time few financial institutions report on so-called locked-in greenhouse gas emissions. This concerns assets on their balance sheet that are CO₂-intensive and may become less valuable in the future. This risk is recognised, but may not yet be a priority in the short or medium term. In any case, it is not yet specifically reported (i.e. ‘We have direct or indirect assets with high CO₂ emissions that pose a risk’). If more financial institutions start thinking about this, I expect that risks will eventually play a greater role in their assessments.’

Also, only ten per cent of the named IROs consist of opportunities, mainly in the area of climate change. Van Veen does have an explanation for this caution. ‘If you say: ‘I see an opportunity here,’ then that means that you have to work this out further in the coming years. Both in terms of the goals that you set, but also the measurement methods that go with it. This reluctance may therefore be understandable in the first year. In any case, I hope that financial institutions will see more opportunities in the future. That would mean that the positive impact they already perceive will eventually also be translated into concrete business opportunities. You then really make the transition that is needed.’

A nice marketing story

The current new-style sustainability reports have changed considerably in terms of design and content, the researchers observed. ‘What we do hear is that the CSRD reports are very technical and difficult to read,’ says Kees-Jan de Vries. ‘It is about transparency: where do you stand as a company on the theme of sustainability?; what goals do you set for yourself?; and what accountability do you give to your stakeholders? A sustainability statement is ultimately an accountability report. We were used to a nice story about sustainability being told in the annual accounts in the management report. But a sustainability report focuses on how it really is. Sometimes that is quite complex and it may not always be easy to read. Reality is simply not always a nice, bombastic story.’ 

Does the ESG Omnibus provide sufficient clarity?

Just before PwC started this analysis, the European Commission proposed the ESG Omnibus regulation in February 2025. This proposal includes adjusting the scope of the CSRD: only companies with more than one thousand employees must comply with the sustainability reporting obligations. And as long as they are not companies of great social importance, the reporting obligation has been postponed from 2025 to 2027.

There are some reservations about this proposal. De Vries: ‘This limited scope is difficult for financial institutions. On the one hand, the legislator wants you to have better insight into your sustainability risks and to report on those risks. But how should you, as a financial institution, obtain the information to produce the report? The Omnibus does not help with that.’

De Vries understands that EU regulations are being simplified. ‘Of course, we have the framework, the CSRD and the underlying European Sustainability Reporting Standards (ESRS). But what does that framework require of accountants? How should we assess the statements? Companies and accountants would benefit from more clarity.’