Case study: EU CSRD implementation & double materiality — a startup-to-enterprise scale story

More than 49,000 companies across the European Union fall under the Corporate Sustainability Reporting Directive's disclosure requirements, yet a 2025 survey by the European Financial Reporting Advisory Group found that only 23% of in-scope companies had completed a full double materiality assessment by their first reporting deadline (EFRAG, 2025). This compliance gap created a massive market for sustainability reporting technology startups, and the companies that successfully scaled from early pilots to enterprise-level deployments offer critical lessons about product-market fit, regulatory timing, and the operational realities of building software for a regulation that was still being finalized as customers were implementing it.

Why It Matters

The CSRD, which entered into force in January 2023 and began applying to the first wave of large public-interest entities for fiscal year 2024 reporting, represents the most ambitious mandatory sustainability disclosure regime ever enacted. Unlike its predecessor, the Non-Financial Reporting Directive, the CSRD requires companies to report against detailed European Sustainability Reporting Standards (ESRS) covering environmental, social, and governance topics across their entire value chain. The double materiality principle at the CSRD's core requires companies to assess both how sustainability issues affect their financial performance (financial materiality) and how their operations affect people and the environment (impact materiality).

For policy and compliance professionals, the CSRD creates a set of cascading obligations. Companies in the first reporting wave (large public-interest entities with more than 500 employees) had to file their initial CSRD-aligned reports by early 2026. The second wave, covering all large companies meeting two of three thresholds (250 employees, EUR 50 million revenue, EUR 25 million balance sheet), begins reporting for fiscal year 2025. Listed SMEs follow for fiscal year 2026. Each wave multiplies the demand for double materiality assessment tools, data collection infrastructure, and audit-ready reporting platforms.

The startups profiled here navigated a market where regulatory uncertainty, evolving standards, and competing jurisdictional approaches to sustainability disclosure created both opportunity and risk. Their scaling journeys reveal what enterprise buyers should look for when selecting CSRD implementation partners.

Key Concepts

Double materiality assessment is the process of evaluating sustainability topics from two perspectives simultaneously. Financial materiality asks whether a sustainability issue creates risks or opportunities that could reasonably affect the company's cash flows, development, or access to finance. Impact materiality asks whether the company's activities create significant positive or negative effects on people or the environment. A topic is material under CSRD if it meets either threshold, and companies must disclose against all applicable ESRS datapoints for each material topic identified.

European Sustainability Reporting Standards (ESRS) are the detailed disclosure standards developed by EFRAG and adopted by the European Commission as delegated acts under the CSRD. The first set of standards, finalized in July 2023, includes 12 standards covering cross-cutting principles (ESRS 1 and ESRS 2), five environmental topics, four social topics, and one governance topic. Each standard specifies mandatory and conditional disclosure requirements, quantitative metrics, and qualitative narrative elements.

Value chain data collection refers to the process of gathering sustainability performance information from upstream suppliers, downstream customers, and other third parties across a company's operations. The CSRD requires value chain reporting for most material topics, creating a data collection challenge that scales exponentially with supply chain complexity.

Assurance readiness describes the state in which a company's sustainability disclosures meet the evidentiary standards required for limited or reasonable assurance by an independent auditor. The CSRD mandates limited assurance for all sustainability reports from the outset, with a transition to reasonable assurance planned for later years.

What's Working

Datamaran: From Regulatory Intelligence to Enterprise Double Materiality Platform

Datamaran, founded in London in 2014, initially built an AI-powered platform that monitored global regulatory and stakeholder trends to help companies identify emerging ESG risks. When the CSRD's double materiality requirement became clear in 2021, the company pivoted its core product to focus specifically on automating the double materiality assessment process. This early positioning proved decisive: by the time EFRAG published the final ESRS in July 2023, Datamaran had already conducted pilot double materiality assessments with 15 enterprise clients.

The company's platform uses natural language processing to scan regulatory filings, media coverage, scientific publications, and stakeholder submissions to generate an initial materiality landscape for each client. Human analysts then refine the output through structured workshops with client sustainability, risk, and finance teams. This hybrid approach reduced the time required for a comprehensive double materiality assessment from the 6 to 9 months that pure consulting engagements typically required to 10 to 14 weeks while producing audit-trail documentation that satisfied assurance provider requirements (Datamaran, 2025).

By 2025, Datamaran had grown to more than 80 enterprise clients, including companies in the banking, energy, consumer goods, and industrials sectors. The company raised $28 million in a Series B round in 2024, led by climate-focused venture investors. Annual contract values ranged from EUR 50,000 for mid-cap companies to EUR 300,000 for global multinationals requiring multi-entity, multi-jurisdictional assessments. The critical scaling insight was that enterprises were willing to pay a significant premium for platforms that could demonstrate auditability: the ability to trace every materiality determination back to documented evidence and stakeholder input.

Novata: Scaling CSRD Data Infrastructure for Private Markets

Novata, launched in 2021 as a joint venture backed by the Ford Foundation, S&P Global, and Hamilton Lane, built an ESG data management platform initially focused on private equity and venture capital portfolio companies. The company recognized early that the CSRD's scope would eventually capture thousands of private companies, either directly through the size thresholds or indirectly as value chain partners of in-scope entities. Novata repositioned its platform to serve as the data collection and aggregation layer for CSRD reporting across investment portfolios.

The company's go-to-market strategy targeted general partners at private equity firms managing European-domiciled portfolio companies. Initial pilots covered 5 to 15 portfolio companies each, with 6-month implementation timelines. Novata's platform standardized data collection across the ESRS datapoint taxonomy, providing portfolio companies with pre-configured templates, automated validation checks, and gap analysis reports. Conversion from pilot to full portfolio deployment occurred at a 58% rate, with the primary barrier being portfolio company resistance to disclosing detailed operational data to fund managers (Novata, 2025).

By mid-2025, Novata managed CSRD-relevant ESG data for more than 400 portfolio companies across 22 private equity clients. The platform processed approximately 1,200 ESRS datapoints per company, with automated validation catching an average of 14% data quality errors before submission to auditors. Annual platform fees ranged from $150,000 to $500,000 per fund depending on portfolio size and reporting complexity.

Greenomy: Regulatory Compliance Automation for Mid-Market Companies

Greenomy, founded in Brussels in 2020, built a SaaS platform specifically designed to automate CSRD and EU Taxonomy compliance for mid-market companies in the second and third reporting waves. The company's positioning reflected a calculated bet that the largest compliance market by volume would be the estimated 40,000 mid-market companies entering CSRD scope between 2026 and 2028, most of which lacked dedicated sustainability reporting teams.

Greenomy's platform guided users through the double materiality assessment using decision trees mapped to the ESRS disclosure requirements, auto-generating gap analyses and disclosure drafts based on user inputs. The company partnered with four of the Big Four accounting firms' mid-market practices to integrate its platform into their CSRD advisory offerings, providing distribution access to thousands of potential clients without building a direct enterprise sales team (Greenomy, 2025).

By 2025, Greenomy had onboarded more than 200 companies, primarily in Belgium, France, Germany, and the Netherlands. Annual subscription pricing of EUR 15,000 to EUR 45,000 positioned the platform significantly below the cost of full consulting engagements, which typically ranged from EUR 100,000 to EUR 400,000 for first-time CSRD reporters. The company raised EUR 15 million in Series A funding in 2024, with the stated goal of reaching 1,000 mid-market clients by the end of 2027.

What's Not Working

Standards volatility and implementation guidance gaps created significant product development challenges for all three companies. The European Commission delayed several sector-specific ESRS and modified implementation timelines multiple times between 2023 and 2025. Each change required platform updates, client re-engagement, and, in some cases, rework of completed assessments. Datamaran reported that standards-related product updates consumed approximately 25% of its engineering capacity in 2024, diverting resources from feature development. Greenomy had to issue revised double materiality templates three times in 18 months as EFRAG published additional implementation guidance.

Value chain data collection remains the largest operational bottleneck for enterprise CSRD reporters. Companies with complex global supply chains reported that collecting Scope 3 emissions data, workforce metrics for non-employee workers, and biodiversity impact data from Tier 2 and Tier 3 suppliers was significantly more difficult than any of the three platforms could fully automate. Novata found that 35% of portfolio companies could not provide complete value chain data for their first reporting cycle, requiring the use of estimates and proxies that reduced data quality scores and complicated assurance engagements (PwC, 2025).

Assurance provider readiness lagged behind corporate implementation timelines. The limited pool of qualified sustainability assurance providers, combined with the novelty of the ESRS standards, created bottlenecks in the audit process. Several Datamaran clients reported that their assurance providers requested changes to materiality assessment methodologies mid-engagement, requiring reassessment cycles that added 4 to 8 weeks to reporting timelines. The lack of established assurance practices for double materiality assessments meant that platform-generated outputs faced inconsistent scrutiny across different audit firms.

Client fatigue from overlapping disclosure frameworks slowed adoption among multinational companies. Organizations simultaneously subject to the CSRD, SEC climate disclosure rules, ISSB standards adopted by non-EU jurisdictions, and California's SB 253/SB 261 requirements frequently struggled to reconcile different materiality definitions, metric specifications, and reporting boundaries. Platform vendors that could not offer cross-framework mapping and harmonized data collection saw higher churn rates among multinational clients, with Greenomy reporting 12% annual churn among companies with significant non-EU operations compared to 4% for EU-only reporters.

Key Players

Established Companies

• SAP: integrated CSRD reporting modules into its enterprise resource planning suite, providing native data connectivity for companies already using SAP systems
• Workiva: US-based reporting platform that added ESRS templates and double materiality workflow tools, leveraging its existing base of 5,800 corporate reporting clients
• Wolters Kluwer: expanded its CCH Tagetik platform with CSRD-specific modules, targeting the compliance and finance function integration layer

Startups

• Datamaran: AI-powered double materiality assessment and regulatory intelligence platform serving more than 80 enterprise clients
• Novata: ESG data management platform for private markets, managing CSRD data for more than 400 portfolio companies
• Greenomy: SaaS platform automating CSRD and EU Taxonomy compliance for mid-market companies across Western Europe
• Position Green: Nordic sustainability management platform offering integrated CSRD reporting and performance tracking
• Sweep: Paris-based carbon and ESG data platform providing CSRD-aligned data collection and reporting capabilities

Investors and Funders

• Ford Foundation: anchor investor in Novata's founding consortium, supporting open-source ESG data infrastructure
• Sofina: Belgian investment company that participated in Greenomy's Series A, focusing on European regulatory technology
• European Innovation Council: provided grant funding to multiple CSRD technology startups through the EIC Accelerator program

Action Checklist

• Conduct a readiness assessment to determine which CSRD reporting wave applies to your organization and identify the specific ESRS datapoints requiring disclosure based on a preliminary materiality screen
• Evaluate CSRD platform vendors on their ability to produce audit-trail documentation for double materiality determinations, not just the materiality matrix output
• Request references from vendor clients that have completed at least one full CSRD reporting cycle including assurance engagement, prioritizing references in your industry sector
• Map existing data collection processes against ESRS value chain requirements to identify gaps in Scope 3 emissions, workforce, and biodiversity data before selecting a platform
• Establish early engagement with your assurance provider to align on double materiality methodology acceptance criteria before beginning the assessment process
• Build internal capacity by designating a cross-functional CSRD implementation team with representatives from sustainability, finance, risk, legal, and procurement functions
• Develop a value chain engagement strategy that provides suppliers with clear data requirements, submission timelines, and support resources at least 9 months before your reporting deadline

FAQ

Q: How much does a typical CSRD implementation cost for a mid-market company in the second reporting wave? A: Total first-year implementation costs for mid-market companies (250 to 1,000 employees) typically range from EUR 150,000 to EUR 500,000, including platform licensing (EUR 15,000 to EUR 50,000), external consulting for double materiality assessment and gap analysis (EUR 50,000 to EUR 200,000), internal personnel time (equivalent to 1.5 to 3 full-time employees for 12 months), and limited assurance fees (EUR 30,000 to EUR 100,000). Subsequent annual reporting costs decrease by 30 to 50% as processes mature and data collection systems are established.

Q: How long does a double materiality assessment take from initiation to board-approved results? A: Using a combination of platform-assisted analysis and structured stakeholder engagement, a comprehensive double materiality assessment typically requires 10 to 16 weeks. This includes 2 to 3 weeks of data gathering and landscape analysis, 4 to 6 weeks of stakeholder consultation and impact/financial materiality scoring, 2 to 3 weeks of internal review and validation, and 2 to 4 weeks for board review and approval. Companies with complex value chains or multiple business divisions should plan for the longer end of this range.

Q: What are the key differences between CSRD double materiality and ISSB single materiality approaches? A: The ISSB standards (IFRS S1 and S2) apply a single financial materiality lens, requiring disclosure of sustainability information that could reasonably affect investor decisions about enterprise value. The CSRD's double materiality adds the impact materiality dimension, requiring disclosure of how the company affects people and the environment regardless of whether those impacts create financial risks. In practice, this means CSRD reporters must assess and potentially disclose on topics such as biodiversity impact, community effects, and workforce conditions in the value chain that might not meet the ISSB's financial materiality threshold. Companies subject to both frameworks should use CSRD's broader scope as the baseline and tag datapoints that also satisfy ISSB requirements.

Q: How should companies handle value chain data gaps in their first CSRD reporting cycle? A: EFRAG's implementation guidance and the ESRS standards themselves acknowledge that complete value chain data may not be available immediately. Companies should use a phased approach: collect primary data from Tier 1 suppliers and the most material Tier 2 suppliers, use sector-average estimates and spend-based proxies for remaining value chain segments, and clearly disclose the estimation methodologies used. Assurance providers generally accept this approach for limited assurance engagements provided the company can demonstrate a credible plan for improving data quality over subsequent reporting cycles. Priority should be given to closing data gaps for the three to five most material value chain topics identified in the double materiality assessment.

Sources

• European Financial Reporting Advisory Group. (2025). CSRD Implementation Progress Report: First Wave Reporting Analysis. Brussels: EFRAG.
• Datamaran. (2025). Double Materiality at Scale: Lessons from 80 Enterprise Implementations. London: Datamaran Ltd.
• Novata. (2025). ESG Data in Private Markets: CSRD Readiness Across Portfolio Companies. New York, NY: Novata Inc.
• Greenomy. (2025). Mid-Market CSRD Compliance: Platform Adoption and Outcomes Report. Brussels: Greenomy SA.
• PricewaterhouseCoopers. (2025). CSRD Assurance Readiness Survey: Findings from 500 European Companies. London: PwC.
• European Commission. (2023). Commission Delegated Regulation (EU) 2023/2772: European Sustainability Reporting Standards. Brussels: Official Journal of the European Union.
• International Sustainability Standards Board. (2023). IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. London: IFRS Foundation.