We’ve got Kieron Maddison, Senior Product Manager at Novata, joining us to share insights on integrating the Corporate Sustainability Reporting Directive (CSRD) into broader ESG strategies. Key topics include the shift from ESG compliance to value creation, the role of data and automation in streamlining CSRD reporting, and the need for companies to conduct gap analyses to meet the new regulatory standards. Kieran stresses the importance of piloting data collection early to ensure data reliability and suggests aligning ESG efforts with financial reporting for greater stakeholder engagement and ROI.
About Sustainable Intelligence
Sustainable Intelligence is an interview series from Novata that explores ESG and sustainability in the private markets. From carbon accounting to using data to create value, the series dives into the challenges and opportunities facing private market investors and company leaders as their integrate ESG across the business and respond to regulatory requirements. Each episode centers authentic dialogue, highlighting experts at the forefront of advancing ESG data collection and driving meaningful progress in the sustainability landscape. Listen to more episodes.
Conversation with Kieron Maddison (Transcript)
Ella Williamson: Welcome to Sustainable Intelligence, where we discuss all things ESG and sustainability for the private markets, brought to you by Novata. I’m Ella Williamson, and I’m thrilled to be your host.
Joining us today is Kieron Maddison, Senior Product Manager on the Regulations and Data team, here at Novata. Kieron has spent seven years building regulatory technology for global companies like Facebook, OneTrust, and Trainline, focusing on privacy, online safety, and antitrust regulations. His work has been driven by a mission to protect people’s rights and safety, and his shift to ESG is an extension of that goal.
Kieron views ESG regulations, such as the CSRD, as being primarily focused on transparency and accountability. He frequently emphasizes that effective data practices are the key to solving over 75 percent of the challenge. We’re diving into a crucial topic today on how to integrate the Corporate Sustainability Reporting Directive, the CSRD, into your holistic sustainability reporting function.
Kieron, thanks for joining us today. So to start, can you walk us through the key components of a strong ESG strategy?
Kieron Maddison: Yes. So the way that I see it, there’s four main components in that strong strategy. We speak to many different organizations at many different stages of their ESG journey from those big, mature multinational enterprises to smaller regional companies. But there are definite trends in their approach to ESG that we can see emerging. The first one is, they’re placing a greater emphasis on data driven decision making, more than we’ve seen in a long time. They’re leveraging those ESG metrics, not just for compliance, but also for long term value creation. They’re asking themselves, where is the return on investment from ESG? and moving on from that. They’re moving those ESG considerations into their financial reporting and corporate governance frameworks, aligning with regulations, like CSRD. There’s a noticeable shift towards more robust stakeholder engagement as well. And that’s kind of giving that 360 degree transparency and accountability in their sustainability efforts.
Ella: That’s really interesting. So you’re seeing a shift from ESG just being a compliance requirement to actually being a more strategic, value-driven approach. So, with this shift towards data driven strategies that you’re talking about, how do you see companies incorporating the CSRD within their broader ESG strategies?
Kieron: Yes. So the observations from our clients are that companies are increasingly integrating CSRD into their broader ESG strategies by leveraging technology platforms like Novata or building their own internal tooling to automate data collection and streamline that reporting process. We’ve seen clients perform a real in depth gap analysis to identify where their current ESG disclosures fall short of the CSRD standard, and then using our tool, or tools that they’ve built internally to close that gap efficiently. We’re seeing many companies prioritizing the alignment of sustainability goals with financial reporting to ensure that comprehensive compliance.
Ella: So technology and automation are becoming really essential for companies to not only meet the CSRD requirements, but also align their broader sustainability goals with financial reporting. Now, Kieron, can I ask you to elaborate on gap analysis between the current ESG reporting standards and what the CSRD requires?
Kieron: The current gap analysis has revealed several critical areas for improvement, particularly in the availability and the quality of the ESG data that they hold. So a lot of companies are discovering now that their current data collection practices are fragmented or they don’t have the depth required for CSRD. And through gap analysis, many clients are identifying those areas where the current ESG reporting frameworks fall short of those requirements. This includes gaps on things like standardization, the granularity, and the availability to provide comprehensive disclosures on topics, particularly climate risks and social factors. Often, companies are realizing that their existing reports lack the structure and depth mandated by CSRD, particularly in aligning financial and non financial data. By analyzing those gaps, they can start to prioritize investments in the systems, the processes that will help them meet those regulatory standards.
Ella: So it’s clear that the more structured, standardized systems that companies are putting in place are needed to meet these really stringent requirements that the CSRD has. Now in your experience in product development, how are companies ensuring they meet reporting deadlines without overwhelming their teams?
Kieron: Yeah. Great question. So, Thank you. I’ve always said that data is at least 50 percent of the problem and automation is playing a key role. So moving from that on the spot, we need this data now. Where can we get it kind of approach to focusing on building out a real time data collection system that operates throughout the year, not just at that reporting deadline. Right now, that’s likely a bit far off for most companies to start jumping right into. But what you can do now. Before you have to do this process for real and report on it, it’s start running a pilot data collection, find out where the data lives, how you can get it and test its integrity. Can you trust the data that you hold? The last thing you want to do is be mid cycle up against the deadline and find out that the data you have is unreliable or it’s worse than you thought. There’s a great opportunity now for everyone to start to try and close that gap and get that leadership buy-in before it’s too late. Once you have good site of the data, you can work with your own technology teams or provider, like Novata, who can help collect this data and provide a single view of your sustainability or information. The reports themselves are actually quite straightforward. It’s the availability and integrity of the data that’s proving difficult. Quantitative data is one thing, it’s reasonably straightforward to deal with, but standardizing those answers to those qualitative, open-ended questions is a completely different ballgame.
There’s some data interoperability that helps, so where you have similar data that exists and has been provided before. Similarly, having tools and processes for things like intermetric validation. By that I mean, does this data look to be consistent given other data that we’ve provided or other data that we hold. So as an example, does the number of women on the board look consistent given the number of your FTEs. And having access to benchmarks as well can help shed some light and give good indications. Hence why we’re investing so much in benchmarks here at Novata.
Ella: Fascinating. So automating that real time data collection and piloting it before the full reporting season is a smart way to get ahead. Now, what are you seeing in terms of how UK firms specifically are getting ready for the CSRD?
Kieron: So right now, from a product management perspective, I think we’re doing a lot of the same things that, the companies themselves are doing that working to develop features that cater specifically to the UK’s needs. So templates for CSRD compliance and tools that streamline cross border reporting. There’s always one eye on data interoperability. Frameworks don’t exactly align across borders. But, there are opportunities to use what you already know under different circumstances. So as a PM, I think that’s something. That’s, I think is a great feature to have,
Ella: Great. And just to confirm PM, that means a product manager, not prime minister. So it’s great to hear how you’re focusing on creating these tools that really enhance data interoperability, allowing companies to leverage existing insights across all the different frameworks that exist. Now, finally, Kieran, one last question.
What are the three key takeaways you’d want our listeners to leave with regarding CSRD compliance today?
Kieron: The top thing, please, please, please do a pilot data collection and do it now. If nothing else, you’ll sleep better knowing that you can actually get the data that you need. And if you can’t get it or it’s unreliable, you have plenty of time to figure out a suitable process to gather it and make that data of a higher quality. You also have some time then to validate it, get some benchmarks, assess your performance, see if there’s any quick wins before you have to report this data publicly.
The other thing that I’ll say is, as my second point, start approaching the return on investment of CSRD more seriously. What will the C-level want to get out of it? How do you get their buy in? How does ESG translate into the wider business strategy? It’s no secret that ‘going green’ can also generate cost savings. So I stayed at a hotel recently that gave you a free drink from the bar every day that you forwent a room clean and fresh towels. On the card that they left in your room, it was framed as an environmentally conscious approach. One of my close friends owns some hotels and his reaction was, Oh, a free drink is a lot cheaper than having a room clean and a fresh towel. I’m no way endorsed in this by the way, see it as a form of greenwashing. But there are inherent links between green and cost savings. And if you’re talking in those terms, you’re talking the language of the C-level and the language of the board.
My final point is that CSRD is a really comprehensive legislation. It’s comforting to me as somewhat of a newcomer to the sustainability space that I speak with people with decades of experience in ESG and sustainability, and they’re still trying to get to grips with it. So give yourself a break, give yourself some time and be proactive. The best thing about the sustainability world is that there is a great community and there’s great support around you. Leverage it, find an advisory team that can help you get to where you need to be.
Ella: Thanks, Kieron. Three very sound pieces of advice there. So thank you for sharing all of your insights today. I hope this episode has given you practical steps to help integrate CSRD into your sustainability reporting standards.
Until next time, let’s keep building sustainable intelligence together. Find out more at novata.com.
