Leverage AI to simplify CSRD reporting

Organizations around the world are navigating complex reporting frameworks to meet sustainability goals. For companies working in—or with—the European Union, the Corporate Sustainability Reporting Directive (CSRD) is a sweeping set of requirements to provide non-financial public disclosures on environmental, social, and governance (ESG) topics. CSRD rules began rolling out in 2024, requiring over 11,000 companies to disclose non-financial information. An increase of an additional 50,000 companies that are incorporated, listed, or doing business in the European Union is estimated. As companies are working to comply, allocating the time and resources is a challenge. Microsoft is developing solutions to address the diverse reporting needs of our customers and investing in our partners to create a variety of options that organizations can engage.

To address this growing need, Microsoft Cloud for Sustainability data solutions in Microsoft Fabric (preview) can help organizations take sustainability data in any format, organize, and normalize the data for sustainability regulatory reporting. This quantitative data reporting approach is complemented by a joint solution from Accenture and Avanade that leverages generative AI to provide qualitative insights. This enables organizations to manage workflows associated with multiple sustainability reporting frameworks globally, including CSRD, Global Report Initiative (GRI), and the International Sustainability Standards Board (ISSB). Organizations can optimize both quantitative data from Microsoft Cloud for Sustainability solutions and qualitative data with Accenture and Avanade’s generative AI-powered solution. 

The solution integrates seamlessly with Microsoft Sustainability Manager, offering a comprehensive platform for managing sustainability key performance indicators (KPIs) across different frameworks. The solution’s collaborative features, generative AI-enhanced insights, and streamlined data integration can help organizations simplify compliance-related processes. Meanwhile, the improved richness of its sustainability reporting enables organizations to take more effective actions to achieve their ESG targets.

Navigate the complexities of reporting frameworks

All ESG reporting frameworks carry their own complexities. However, the CSRD has been top of mind in 2024 for organizations in and outside of the European Union as they begin to gather, analyze, and report the required data. This is no simple task—the CSRD encompasses 12 standards and 82 reporting requirements, which amounts to approximately 500 KPIs and over 10,000 underlying data points. In addition to managing this large array of ESG data, companies face other significant challenges associated with CSRD compliance and data management including reporting on the entire value chain versus only on their own organization. The evolving nature of sustainability criteria and metrics further complicates the reporting process. 

Navigating the intricacies of a multitude of reporting frameworks and intricate regulations necessitates extensive data gathering and assimilation. The process of ESG reporting often engages various departments and resources within an organization, introducing its own set of risks and costs. The more manual a process, the more opportunities there are for errors to occur, and the complexities of each reporting framework require time, diligence, and accuracy. A proficient solution can help simplify the process and effectively aid in the generation of accurate reports with fewer resources required. 

Accenture and Avanade’s generative AI-powered solution allows users to select from different reporting frameworks and adapts to the specific requirements of the chosen framework, displaying relevant categories and reporting structures. Users can access the breadth and depth of their data and translate it into the necessary reporting frameworks. This flexibility is crucial for organizations that are subject to multiple reporting obligations or need to adhere to international standards beyond local mandates. 

Streamlining data management using Microsoft Azure OpenAI Service

Accenture and Avanade’s solution addresses the dual challenges of qualitative and quantitative data in sustainability reporting, utilizing Azure OpenAI for enhancing its reporting capabilities, especially for qualitative data input. Using Azure OpenAI to create an AI assistant, Accenture and Avanade’s solution offers a unified platform for sustainability reporting, simplifying the process of compiling CSRD reports, making it easier for users to interact with data and generate reports quickly.

◉ Qualitative data management: Leveraging Azure OpenAI integration, Accenture and Avanade’s solution assists in drafting responses to qualitative questions, such as detailing a company’s sustainability policies, practices, and goals. This AI assistant ensures that responses are not only in keeping with reporting standards but also reflective of best practices and forward-thinking sustainability strategies.

◉ Quantitative data management: The integration of Microsoft Sustainability Manager allows for the automatic import of calculated quantitative metrics. This means that insights or recommendations provided by Accenture and Avanade’s solution is informed by the data in the user’s ESG platform. The AI assistant enables identification of trends and patterns in both qualitative and quantitative data sources, aiding in a more holistic analysis. 

An enhanced collaborative workflow

One of the biggest pain points that companies have related to ESG reporting is managing the approval workflow with multiple process and approval steps. It’s important to have a trail of accountability, which depending on organization size, can exist across several departments and users. Accenture and Avanade’s solution enables organizations to assign responsibility and accountability, thereby streamlining the process of preparing the report and its associated approval processes. 

Importantly, team members can work on the same sections of the report simultaneously and the platform maintains comprehensive audit trails of all changes made to the report. This transparency is vital for accountability, enabling team leaders to monitor progress and ensure that all contributions align. 

Source: microsoft.com