The new directive on corporate sustainability reporting (CSRD) came into force in 2023, and for Abla El Ouafi and the other members of Reanda’s ESG team preparations for the first ESG audits next year are in full swing.
Abla has been working at Reanda Netherlands for almost two years now. In the first months of her employment, there was a teambuilding event where they talked about the upcoming CSRD and how audit firms were going to be included in the process to audit the sustainability reports. “They were planning to put together an ESG team and asked if anyone was interested to reach out. That’s how I joined.”
Preparing for CSRD
“At the moment, we are still setting up,” Abla explains. “We’re trying to gain all the knowledge on how to conduct the audit as this is going to be a first for all of us. For now, we are mainly doing a lot of reading up and learning, keeping an eye out for any new information on the directive, and making sure that we, as well as our clients, are ready. We’re following up with clients to see where they are in their own preparations and what they are doing to ensure they are ready to report on their sustainability matters. Large companies that were previously not required to prepare sustainability reporting will need to do so under CSRD starting from 2026, based on their 2025 data. It takes a lot of time to prepare, especially to combine it with financial audits, both for us and clients. For the time being, financial audits are still a priority, but you need to make time for ESG as well.”
“People aren’t just interested in the numbers anymore, but also in what the company is doing.”
Various stakeholders, various priorities
“The report will be published publicly, along with the financial statements of the company. The ESG report, however, will have more stakeholders; it’s not just about investors, for sustainability the employees will be interested as well, not to mention the consumers, banks, and the government. It all depends on the perspectives that the various stakeholders would have. Consumers are becoming more interested in sustainability. This pushes companies to not only explain themselves but also implement greener initiatives to avoid losing customers to competitors. The banks are also important stakeholders. They need to check if the company is green as they can’t give out loans to companies that would use the investment for something harmful to the environment. That’s also pushing companies to adopt sustainable practices.”
A new way of auditing
“With financial audits, you know the standards and you know what’s correct and incorrect. But for sustainability, there is no official information yet on how to audit it. We have to set it up ourselves. Luckily, we have members of our team who have a masters in sustainability, so they have the right background to help us to design the right audit procedures.”
“We know this is new territory for companies as well. For now, we are going to audit based on limited assurance. As this is going to be the first time for many companies to prepare such reports, it can be difficult to know everything you have to report on. Fortunately, the European Sustainability Reporting Standards (“ESRS”) are in place to guide companies through their reporting. The directive, for example, states you have to look beyond your own operations and also report on the value chains. Where are you getting your goods from, what are your suppliers doing? It can be quite difficult at first to go that far, so for the first year there is a bit of lenience.”
Where to start?
“For clients who don’t know how to start with the reporting, we explain that they need to meet with their stakeholders, talk to them and see what topics they find interesting, what they think is important. Then, the companies need to assess the materiality of those items. We can advise clients on the how and the steps they need to follow for their reporting. We can provide examples of reporting from comparable entities. For the implementation itself, however, we refer them to advising firms, as we prefer not to audit our own advise.”
“Financials are still the priority, but you need to make time for ESG as well.”
“My personal recommendation would be to take this as a priority. Don’t think that the publication of reports is still far away in 2026. It takes quite a bit of time and effort to implement. Even just the preparations take a lot of time. But preparations can only take you so far. What you also need is the commitment at the top level. As long as the people in charge are taking things as a priority, things will be much better in the future.”
