If you’re a company working to achieve CSRD compliance in time for upcoming deadlines, or an external consultant tasked with auditing a company’s CSRD compliance, the first thing you’ll realize is that this will be a time-consuming process.
The challenge of CSRD compliance
CSRD requirements are complex and wide-reaching. As a new regulatory gold standard in ESG reporting, they cover a wide range of topics and are very specific in their requirements.
Given the rapidly evolving (and historically voluntary) nature of corporate reporting on sustainability matters, most companies now subject to CSRD are likely to have some aspects already addressed — but almost certainly not all. The major problem is that these areas have been covered in previous disclosures, which may exist in various formats. Even within an individual company’s public disclosures, the fragmentation of sustainability information presents a significant challenge.
It’s not that the data doesn’t exist; for the most part, it does. Rather, the challenge is finding the right data, in the right place, as quickly as possible — and then keeping it all straight.
Given the complexity of the situation, how can sustainability professionals, consultants, and auditors verify and then ensure CRSD compliance — all without losing their minds (or at least their lunch breaks)?
The importance of finding the right tools
The first idea that anyone tasked with assessing CSRD compliance should understand is: you don’t have to do this manually. In fact, you shouldn’t — the chances of error are far higher when companies go about this process entirely manually. In the regulatory ESG world, errors are taken very seriously.
Finding the right tools to support your compliance assessments is critical. The right tools will increase accuracy, speed up the process, help maintain clarity and organization, and, importantly, give you more time after completing the assessment to help clients or your company close any disclosure or climate action gaps identified in your assessment.
Small teams, big asks
CSRD compliance is no joke. The risk of non-compliance is significant, and yet we know of many companies that have handed CRSD compliance over to a very small team of internal or external professionals. For many of these teams, the only way to understand and meet disclosure requirements in time for the deadlines will be to get really smart about how they use technology.
Take one of Manifest Climate’s clients as an example: High Liner Foods, a leading frozen seafood supplier in North America. The company’s complex sustainability disclosure requirements meant their small team would most definitely need to leverage software to get the job done. Luckily, they found Manifest Climate.
“Manifest Climate offered that blend of the human side and the tech side,” says Josh Austin, the company’s Senior Sustainability Manager. “It allowed us to understand what we needed to do to be compliant with any relevant climate disclosure framework, understand our compliance gaps, and helped us build an action plan in order to be self-reliant.”
Manifest Climate really allows you to see your climate disclosure from an unbiased third-party perspective and ask, “am I meeting the benchmark or not? Am I meeting the intent of the disclosure, or not?”
– Josh Austin, Senior Manager, Sustainability at High Liner Foods
Understanding the ‘first pass’
The most time-consuming part of any climate disclosure assessment is locating and organizing all the necessary data in order to conduct a first assessment of what you’ve disclosed versus what’s expected.
We call this the first pass; it’s the equivalent of a writer’s rough first draft or an artist’s first sketch. You get the right elements in the right places, and then go back to fine-tune. We believe first passes are best performed not by humans, but by artificial intelligence. There are AI tools for disclosures that are exceptionally powerful and thorough, capable of providing a baseline assessment, analyzing hundreds of pages of material in minutes. If you’ve ever seen ChatGPT write an essay from scratch, then you know just how fast AI can be. Manifest Climate, for example, can conduct first-pass disclosure assessments 200 times faster than manual reviews.
Instead of spending days or weeks on your first pass, we recommend giving your human team members a break and letting your AI workers take the lead. Human team members are far better suited to refinements and strategic decision-making, and removing this initial burden frees them up to do this.
For a real-world example, a well-known social media conglomerate that leverages Manifest Climate’s impressive speed to generate first-pass disclosure assessments. This company is a well-known climate leader with a sizeable sustainability team, and yet they still lean heavily on the efficiencies of AI.
“It’s just an epic time-saver,” one of the company’s Climate Risk Business Analyst explains. “Its cross-checking abilities gives us all the more assurance that we aren’t missing anything and can move ahead with doubling down on an existing initiative and filling in our gaps.”
Can I really trust an AI tool with the first pass?
Much like the debate around driverless cars, many people worry that AI tools won’t catch everything a human team member might do if given the same task. But like with driverless cars, the data shows that well-trained AI models are typically significantly more accurate and less prone to ‘missing’ or misinterpreting things than their human counterparts.
The question we should be asking is not Can I trust AI with this? but Can I trust humans with this?
Expert-trained AI can deliver reliable, high-quality assessments every time, in comparison to manual reviews, which are often highly inconsistent, especially if different team members are involved each time. Manifest Climate, for example, offers complete coverage of disclosure requirements with 90% accuracy on first-pass assessments across multiple global standards.
The ideal workflow for an in-house or external team is to let AI produce your first pass, giving you a baseline understanding of your compliance, including your strengths and weaknesses. From there, your human team members can finetune and dive deeper into particular areas, using these to create a detailed plan for achieving full disclosure compliance.
Keep data organized and accessible
The first disclosure assessment is the most difficult, because it requires seeking out data from any number of documents previously produced by a company. However, part of your disclosure assessment should involve figuring out better data management for the sustainability data you’ll need for initial and ongoing CSRD compliance.
This is another area where an AI tool can make things far more efficient. For example, Manifest Climate scrapes existing disclosures to pull relevant data for your disclosure requirements, it maintains an organized and transparent audit trail. Every data source is backed up by linked source documents and explanations, giving you full transparency and a super easy-to-trace data ecosystem. Keeping your data in one organized place is key to conducting disclosures without spiraling into an existential crisis.
Instantly assess CSRD compliance with Manifest Climate
Manifest Climate is the AI compliance review tool for sustainability teams, consultants, and audit professionals. It’s your secret advantage that offers a first-pass attempt at compliance reviews for voluntary and mandatory ESG regulations.
Put Manifest Climate to work to review and pull data from hundreds of documents in minutes, producing a first-pass compliance review with full completeness that pinpoints areas of potential noncompliance and shows you where to focus your efforts on your second pass.
