This is a series of stories on our own journey of creating a Corporate Sustainability Reporting Standard compliant report this year. This story is the 2nd part.
With the new CSRD reporting, non-financial information rolls in the audit process and financial management systems. Gofore’s acting CFO Ville Räsänen says that the process led by the finance team is like being a captain of a ship on foggy seas, with a crew that pulls together.
– The most difficult and at the same time the greatest thing about this process is that exhaustive CSRD reporting is new to everyone; us, the assurance providers, system suppliers, all partners. We tolerate the uncertainty and complete one another, describes Head of Financial Controlling and Treasury Ville Räsänen who is the acting CFO while Teppo Talvinko is on sick leave.
Managing Gofore’s already comprehensive sustainability reporting has been the finance team’s responsibility since the beginning of this year with the upcoming CSRD, supported with her substance expertise by Chief Sustainability Officer Kristiina Härkönen. What’s also new is that Gofore changed its authorised audit firm to Ernst & Young last spring, with Antti Suominen as principal responsible auditor. One of the evaluation criteria of the new auditor was CSRD assurance expertise.
Standard still untested in practice
EY has so far gone through Gofore’s earlier reporting, the double materiality assessment that the company carried out last year, as well as reviewed the relevance of each data point for Gofore. Auditors have mostly agreed on materiality, but also pointed out standard compliant matters to include based on the imperative implementation guidance even though they do not seem to make sense.
– The occasional stiffness of the standard has been one of the biggest surprises. We must, for example, explicitly say we don’t sell tobacco products or run coal power plants, and a mere tick in a box won’t do it, Räsänen says.
– Comparing to the world of IFRS, CSRD has no established common reporting practices yet, but instead it is interpreted like the devil reading the bible, and there are few alleviations. This is likely to get more reasonable over time, but no-one probably wants to deviate from the standard in the first year, Räsänen continues.
Gofore’s underlying systems such as finance or human resource systems are largely centralised, which helps the data collection process. Now, the standard is being combed through point by point, choosing the relevant things and arranging the data collection on a detailed level. Some of the data has already been collected, but the process is an iterative one, where data collection and materiality assessment take place side by side due to the required schedule.
Everyone is now a pioneer
Gofore has used the so-called ESEF tagging i.e. standardized machine readability in its financial statements, and it is now expanding to also cover ESG reporting at some point. Whether this is something for the finance team’s agenda as soon as next spring is likely to be clarified on an EU level this month.
Despite the new content, the process includes familiar elements to the finance team. Data must be collected in an organised manner, and the audit trail of the collected data must be verifiable. This process is supported by CCH Tagetik’s CSRD module that Gofore chose in the beginning of this year and an implementation partner for it in the beginning of the summer. Tagetik has already been used in Gofore’s financial reporting. The implementation project that began in August is completed by the end of October.
As for teamwork, Räsänen describes the project to take the entire village. While the Tagetik extension is not yet implemented, it has not been possible to practically train those who the data collection concerns. The core team has done its very best to onboard other colleagues on what is to come.
– The process probably feels like a necessary evil from time to time but is hopefully also considered as a personal learning journey and mastering future skills among the first people in the world, Räsänen concludes.
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