Corporate Sustainability Reporting Directive: Analysis Of First-Wave Csrd Banking Disclosures

This study examines the first wave sustainability reports published by 20 European credit institutions under the Corporate Sustainability Reporting Directive (CSRD), investigating their double materiality assessment approaches and reporting practices. By employing MAXQDA software, we analysed these reports, and we have identified significant consistencies in priority sustainability matters reported, with universal coverage of climate change, workforce issues, consumer impacts, and business conduct across institutions. Our research shows that while banks effectively report on impacts, risks, and opportunities (IRO), notable challenges persist in consistently differentiating between impact and financial materiality perspectives. Financed emissions has become the main environmental concern, sometimes overshadowing other sustainability issues including water resources, pollution, and biodiversity which are interconnected. This study also identifies several comparability issues, including inconsistent value chain positioning of sustainability matters, inadequate time horizon specifications, and overreliance on indirect stakeholder consultations. Regional variations between Northern and Western and Central European institutions are observed, particularly in reporting structure and depth. The implementation of EU Taxonomy disclosures and preparation for limited assurance requirements present additional challenges for these institutions. By offering insights on CSRD implementation in the banking sector and suggesting specific ways to improve the comparability and decision-usefulness of future sustainability disclosures by credit institutions, this study adds to the literature on sustainability reporting.