Name: Key Learnings and Data-Backed Insights From the First Wave of CSRD-Aligned Reports
Uploaded: 2025-05-15T15:30:56.477Z
Duration: 1 h 12 s
Description: Key Learnings and Data-Backed Insights From the First Wave of CSRD-Aligned Reports

Transcript for "Key Learnings and Data-Backed Insights From the First Wave of CSRD-Aligned Reports": Welcome, everybody, to our webinar. We'll start in one minute. Just allowing enough time for everybody to take, their virtual seat. We expect a full house today, and that's the beauty of virtual rooms. There's no capacity limitation. Just waiting a bit more. We're ready to start soon. Excellent. I think I think we're ready to start now. So welcome everybody. Good afternoon, to those of you from on this side of the pond, and good morning for the for for the others. Key learnings and data backed insights from the first wave of CSRD reports. We have a lot to cover today and a fantastic panel, with expert speakers. So, let's deep dive on what we'll cover today. We have a full agenda. Obviously, we're going through welcome introductions, right now. So Datamaran has been collecting CSRD statements since the beginning of the year. We've we've been doing obsessive analysis on on these reports. This, led us to publish the report that you will, you will see today, And Ian will take us through the methodology that we use to collect these data and and, and, the, and and how we analyzed it. Then we ask our experts to review the insights and share the most surprising, more the most interesting insights today. So they we will hear from them, and then we will go through may three main areas of of conversation. So we'll we'll explore what does a typical user base statement look like. Then we'll explore within materiality across sectors, value chain and time horizon, see if if anything has changed compared to materiality, before. And then we'll we'll take a moment to think beyond reporting and think, okay. What does this mean in terms of strategy and and good governance? We should have enough time for, questions, to our, our speakers. So there is a q and a functionality, on the right hand side of of your screen. Please post your questions there, and then we'll we'll answer, those, if we have time. If we don't, we'll look at those online. Before we start, couple of housekeeping rules. So this event is being recorded, and then we'll share the recording for, all the participants to the event. So those that cannot make it can can we watch it. If there are any technical difficulties, please email us at marketing@datamaran.com. And I already covered the q and a functionality, so please don't be shy and and ask your questions. For those of you that don't know data, Moran, we support, good governance and data driven decision, making, for, large organization and leading organizations. We use, AI, to, enable that, in analyzing vast amount of publicly available information. Last note from me before we kick off, today is also a very special day for us because we're launching our, first community platform called Arbo. The the community is is is free is free to join, so, check check it out. And now without further ado, let let me introduce our our speakers. So starting from our own team, we have, Ian van der Vlugt, VP market leader at Datamaran. Then, we have, Efraig with Gemma Sanchez Danes, and, Novo Nordisk with Samuel Canghiari. Hello, everybody. Thank you for, for for joining, today. So there's no better way to kick off the conversation than actually hearing directly from, you, our our audience. And in that sense, we can launch our our first poll. Great. Ian, do you want to take over? Absolutely. So thank you, Donato. Thanks, everybody, for joining. This first poll is, is really to get a sense of that community and, and what subset of that community is joining us today. Donato mentioned Harbor. I think that one of the the really valuable assets that we as a company have been able to realize and, as you see represented in this great panel today is that community and, practitioners, academics, thought leaders, and and others come together in this shared safe space to have candid conversations about the future of the things we care about, the future of sustainability and and what that means for business. So this first poll is kind of a sense check on who's in the audience today. Obviously, given the subject matter, wave one companies, those that that have already been required to report under CSRD and are kind of gearing up for subsequent disclosures, I would expect are are kind of the the the big audience. Although, from what we're seeing thus far, it looks like we have more, wave two or three companies present. But I I would, I would be remiss if I didn't highlight the the importance of that strategic planning piece that Donato also mentioned that I know we're going to touch on in the end. As you can hear from my horrible accent, I'm I'm on the other side of the pond. When I speak with American companies and, especially in this post omnibus world, there's a lot of kind of retraction away from this idea of CSRD. And, like, oh, no. I don't we don't have to do that anymore. Thank god that the wonky, you know, ESRS EU thing isn't isn't required any longer. But there's so much value in in having this, replicable data structured format. You know, the the the value of the impacts, risks, and opportunities that that companies are reporting and the process that they're going through to identify those. I think that, if we if we're able to to translate that away from just being a a compliance exercise into what is the value of this information, then then there's going to be, a lot more traction and and, this this is definitely going to be the gold standard moving forward. So final poll results in, it's looking like we have mostly wave two, three companies who are preparing for future mandatory CSOD reporting, followed closely by those that have already gone through this this exercise, and we'll hear from from Samuel and Novo Nordisk on some of, their their, learnings from going through this, and then and then a few others to boot. So let me close this, and then we'll jump into some of the meat here. If I can find my way back. First of all, I I am just the pretty face who gets to announce this great report that we're putting out. I cannot take credit and I will give credit where credit's due. So, huge shout out to to our research team and our marketing team for pulling this together. Again, it's been, you know, a huge effort. Datamaran's kind of unique stake in this space is around double materiality and, and how companies are are implementing that. We've worked with hundreds of companies through this process over the past couple of years, you know, learned a lot along the way, and we we wanted to also see how companies were in the end kind of what was the outcome of this exercise? And so there has been a lot of reports of late around this first tranche of CSRD findings. Our unique positioning is is specifically around that implementation of double materiality, and we focused largely on the impact risk and opportunity statements that companies have reported as kind of the backbone of everything that that follows. We looked at 304 CSRD sustainability statements, and 11 over 11,000 individual IRO statements. This is from companies from over 21 countries and representing 57 industries. What we found, is is, you know, some of what we're going to tease out today. And I asked Gemma and Samuel in advance kind of what what were the what was the most surprising finding from this research for you? And, Samuel, I'm gonna start start with you. And this chart on the left was the one that you selected. It was specifically around that the entity specific subset. So I'd love to ask you, what did you find so interesting about about this particular, this particular finding? And and what does that mean for Novo Nordisk as you're thinking about future reporting and also have strategically how to how to drive all of this forward? Thank you, Ian, and, also to you and another for the for the invite. I'm very glad to be here. Yeah. One of the one of the most, interesting aspects was that 14% of the of the companies of the report have have reported on entry specific topics. It seems a bit lower than expected, for me. Obviously, we know that one of the goal of the standards, is the comparability, which, you know, entity specific, topics would potentially hinder that one. But I also believe that for many companies, these are the ones the those topics that allow a deeper connection with, with strategy, business model, and value creation. However, I do understand that, also the omission of them, because they, they are basically voluntary. Right, so and once made material, they would trigger a series of, minimum disclosure requirements that companies would need to report to. So, it creates some some more complications if if made material. Absolutely. And I have to say that I would expect that, auditors would not necessarily challenge, that much the inclusion of, or the the lack of, energy specific, topics at least before even the the development data assessment when when all the topics are are listed in the in the gross list and then to be to be assessed. But I believe it's, the inclusion of identity specific, topics could be a way to to move away of, what we have discussed, you know, as being as a compliance exercise of the sustainability statement and can be really grounded into the into the sustainability strategies of, of companies. From Novo Nordisk, we have, we included four of them, and not surprisingly, three are in the s four standard, consumers and end users, which, maybe pushing a bit the boundaries we have even renamed, to patient protection and quality of life. And these are the innovation, which I saw from the report is also among the ones that are in that 14%, the the most, used. And then we have also prevention of serious chronic diseases, falsified medicines, and, and then in governance, g one bioethics. So as you can from the business model we have in a nominal risk, these are very, very central to to to the way we work. Thank you, Samuel. And, I mean, thank and thank you also for being brief and and and reporting those entity specific topics. I think, you know, to your point on on auditors, maybe not a priori coming in and saying, like, you have excluded these and and they they might be important. But the more evidence there is of materiality in in the public space, then the more likely they will be on challenging your peers on why they might have excluded that information. So I think, you know, this is the first time any company has gone through this. This is the first evidence we have of how companies have implemented, the double materiality principle and, and certainly, you know, we can expect future improvement and and refinement, more robust processes as as we move forward. Gemma, shifting over to you. The this chart on the right, we have a breakdown of the, over 11,000 IRO statements we had by by IRO type. So with a positive impacts, negative impacts, risks, or opportunities, this was what you found most surprising. Can you illuminate what it was that that kind of struck you from this? And, and as as an EFRAG ambassador, what is your takeaway on that? Sure. Hello. And and and also, congratulations on the report. I think it's very visual. I think this is not an easy topic to actually summarize in in a way that, it's easy, to read. So congrats on that. Before I go into that, if I could just very briefly, comment it comment on what, Samuel is saying, because I think it's a really good example of something that I also found surprising, maybe not as as as in the first order. And and, obviously, for those standards in social where we do not have a standardized metrics, and as for as an example, we have seen, you know, good examples and good practice from pharma companies or financial services reporting that. So clearly, this is actually what we we would encourage, you know, and that's the spirit of the standards. On this particular, chart, what I found quite surprising, especially in the context where we are in, you know, under discussions about double materiality, you know, financial materiality, is that, not only in social but also in environment, we see that there's more impacts than risks and opportunities. And it's actually very interesting. It's it's, it's interesting because at the end of the day, what we are seeing is that probably the impacts are actually more easily identifiable, than some of the risks and opportunities. And also because it to a certain extent, it proves that, you know, there's not a one to one conversion between impacts and risks and opportunities. We may see, you know, a different evolution, in time, but this is actually something that I I wanted to flag. It's this is something that we thought would be the case in social. Maybe, you know, not so much on the East Side, but we are actually seeing that, across the piece. Also interesting is the fact that, the split between negative and positive impacts. It's something that, probably given that we we fell short in providing guidance or definition on positive impacts, we we are seeing different takes and interpretations. And, obviously, we could issue more guidance, but, also, we believe in the forces of the ecosystem that there there will be a certain level of, you know, standardization or self regulation if I if I could put it like that. Thank you, Gemma. Donato, I am going to now pass it back your way to dive into what does a CSRD statement actually look like? Thank you. Thank you, Ian. And thank you, Gemma and Samuel, for sharing your most insightful, finding from from from our report. Now let's take a a step back. Right? Because many many of you are are actually from wave two companies. So probably the first question that you have in your mind is, what can I expect from a CSRD statement? You know, what is the typical profile of a CSRD statement? So, you can see three charts, here, which I think do a a a good job at summarizing what you can expect. So starting with the most obvious, probably the first item on on on on the agenda, which is how long it should be. And it that's interesting. When when when companies were were preparing and, you know, deciphering the standards, you know, there were some wild script speculation. Like, if we if we did this, like, as prescribed, it will take thousands of pages. Well, the reality is that that that didn't happen. Our our analysis shows that the average number of pages is 100 o three. And that more more interestingly, that result is not not different from the average length of a sustainability report before CSRD. This is quite interesting. It's also an insight that we'll share with the, EU parliament, this week, during the hearing or hearing on on the omnibus. Because I think it's it's actually a very important data point that it's not necessarily creating additional burden, in in this in this sense. As a matter of fact, the the the biggest changes that we see are more in the structure of of the report and more importantly, also in a very clear cut of definition of what is material. And the next two charts are actually more, more about that. So the other most frequent questions that, clients from wave one have been asking us is how how many standards should be material. Right? And and CSRD is the is the, well, the ESRS are the first set of standard that has a very clear materiality mechanism, in that sense. So we know that there are 10 topical standards. And in this sense, you can see the distribution in our in our central chart, with the majority of companies in our sample, having six standards as material. But I I would say that even if you are between four and five, you you probably with with with the with the majority. Definitely, there is a a set of companies that, went for, you know, the the full picture, let's say, nine, nine or 10 or or 10 standards, but that's not the majority. And then the the the final chart on the right is actually the the same chart that we were looking at before. But at this point, we can, highlight the fact that, you know, the usual suspects are the the the topical matters that are typically considered material, which are e one, so climate change, s one, own workforce, and g one, which is business conduct, governments. On on the right hand, of that chart, you see those topics, those matters that are indicated as material less than in 50% of of the sample in a sense. Interestingly enough, even climate that, was considered the sort of standard or sustainability matter that is material for every company, we found evidence of organizations that actually indicated that they don't have any material impacts, risk, and opportunities related to that. That's why you see 99%. And I think this is also a very interesting point, in the sense that it is possible to articulate, that, there there are no material impacts, risk and opportunities related, related to climb to climate. So this is what you can expect, from from from a CSRD statement. Now asking asking our our experts panelists, Gemma, from a standard setter perspective, is this what you expected from, the first wave of of CSRD reports? I I think it's it's a really good starting point. I think that what we are seeing, is that wave one companies typically had obviously, been in scope of the NFRD. So Europe didn't start from zero. Some of them also adopted voluntary, frameworks or standards like GRI. So they were probably not, you know, at at the same starting point as others. So this is actually quite quite, sensible, I would say. Maybe the the surprising fact, and I don't know whether we we should comment that now, tonight, or later, is is the number of IROs because that's probably something that for us, it was a bit surprising, and, obviously, we are in the in the midst of the simplification exercise. We are having a large number of outreach events, and and and we understand that sometimes the flexibility that is given in the standards about aggregating IRLs has not been fully understood. So we we have a lot of granularity. It could also be that ESS one a r 16, which is the universe of subtopics and sub subtopics, has been taken as a checklist. And probably the the the finding or the surprise from our end would be more on that regard, whereby companies had the flexibility or liberty even to actually aggregate to make it more meaningful. Because at the level of topic, I think it makes sense, but it's actually when you go below, you know, at materiality level that we are probably seeing more granularity. And and by having a lot of information, the obscuring point, I don't think it's a risk. Let me be honest. I don't think it's a risk, but we're probably moving towards that direction. You you you raise an excellent point, Gemma, in terms of, you know, what what number of IROs is actually the right number of IROs. And, we have, visualization on on that. I think it may be coming up later. But just to give a, like, the the the breadth of the data there, we go from a minimum of one IRO, which okay. But if you have zero, you don't have a report probably, to a max to a max of 143 material IROs, which is which is a high number. Mhmm. The median value there is below twenty and thirty. I can't remember the exact value, but you can from, from from the report. Now, Samuel, coming to you. Now, obviously, you are a veteran from wave one. Now in terms of, you know, what you learned from these experience looking at these results, is there anything that you will change in in in in in in what you've done to to put together the first CSRD statement? Yeah. Maybe I can I can also link it to what both you and Gemma were talking about just now because, you started the, referring to the to the length? And with, with the, we are at 54 pages with the twenty twenty four. But we have also checked nine out of 10 topics. So, it was definitely there was a there were quite some memorization on on what to report on. But, particularly, I wanted to to point out the fact that the attempt of, focusing on the IROs that are really that are really material. And, and also in some way, putting them together and bundling them can, can help in in in focusing the disclosures on to the most material ones. And and now we have Gemma that can can, say otherwise, obviously. But I believe, for how the topics are structured, it's, it wasn't meant to exclude that many, of them, the the intention of the of the standards, but then focusing specifically on what are the, arrows. And, I'm saying that's that also in terms of changes for from 2024 to 2025, We have met, Evertore, quite a few of our discussions in terms of structure, DMA, which we are running again in these weeks. But particularly, the overarching point was to link the disclosure even more closely to the arrows. I think we have done already a quite quite good job in doing that, but that can be even even improved because I do realize that there there could be actions or metrics that, although important, they're not necessarily so closely linked with, with the arrows. So that's, that's one of the directions where we're gonna be going on, on focusing on what actually is the impact risk opportunity and, what are the policies related to them, the the actions in the in the the that are linked to them, and and then the metrics that actually track the effectiveness of those IROs and not of something else that probably is not as as important. Thank you. Thank you, Samuel. And let let me let me be, allow me to be a bit, provocative, here also, you know, with the all the omnibus noise that that we are hearing. Do you do you think, again, in light of these data and your experience, that you over implemented in in your in your first CSRE report? No. I don't believe so. I believe we can we can be even a bit more, sharper, on, on what is really most important and maybe even link it more to the to the to our to our, to our strategy. But I I don't believe we have all over implemented. We can, we can obviously, as as I was saying, link it more to the arrows, but we have done also analysis after the DMA at the data point level. And, also, we we've had some that we were we believe were not were not material, or not the decision use useful for the reader. So, no, I don't believe so. Excellent. Thank you. Thank you for that. Alright. Now it's time to, pass it back to Ian and hear again from our audience. Putting putting Samuel in the hot seat. I love it. Let me launch our next poll here. And, we're moving into a conversation around, how do we use this information? What what is what is decision relevant from to to Samuel's point from all of this this data that we're getting and the insights that we're generating? And while while you're thinking about how to enter this poll, I did want to just, nod to some of the recent product developments that we've implemented on our side and, and see if if that helps to kind of spur the conversation along. So the first is what we've called DMA evaluate. Obviously, this is an annual exercise, at least annual exercise, to pay attention to the the changes in the external landscape and what that means in terms of updates to to your impacts, risks, and opportunities. Right? How is how is the landscape evolving and, and how should we be considering, where to where to target our reassessment of IROs that we had, and how can we kind of navigate the space without going through the the full, process every year. So DMA Evaluate gives a very targeted AI driven approach to help companies through this, gives them evaluation signals on, you know, how they should be thinking about IROs and and where there might be gaps for them to to to reassess, and takes them from from a to b in a in a really nice streamlined way. The second is, an IRO benchmarking feature that we've recently put into a pilot. We now have over 500 companies IROs. So the report, we have 304 companies. Obviously, these CSRD statements are still still being published. So we're we're, internalizing those now of over 500 and support this kind of understanding, benchmarking of where where do I sit, and and how am I thinking about IROs, and, how are peer companies thinking about them, and where where might those gaps exist? How can I internalize some of these this evidence that we're seeing and, and find opportunities to also improve my processes and ensure that that we don't have any blind spots? Right? And that's, I think, one of the the the biggest questions I get is is kind of, how do I know that I'm not missing anything? How do I have confidence in, in in this process and the results that we're getting? And this first tranche of information is is going to help to build that, and it's, it's our responsibility then to to try to translate that in a meaningful way. So, taking a a look at these results, so the most people are going to be looking at benchmarking for for their own disclosures, presentation to leadership on market best practices, and then obviously as as input to the next level of materiality assessment. So I think that aligns broadly with, with with what what I was talking about with some of our recent feature developments and, and and some of the continued product value that we are, building into Datamaran. Let me just pop back into my slides here. And we're gonna talk about materiality across sectors, value chain, and time horizon, starting with this view of a sector heat map, and and the the 10 topical standards. So I'm not going to to kind of dig into all of the nuances that exist here. I think that this is obviously a very relevant, takeaway and, and can help to inform this, you know, what what is material, where do I potentially have an impact risk or opportunity that I haven't thought about yet or that, you know, that that I should look at how peers are are are kind of thinking about these these different topical areas. And I wanted to to just pause and then ask Samuel, first of all, you know, what do you think about the poll results? How how is Novo Nordisk thinking about kind of leveraging all of this information and data that exists, and and how are you going to put that into practice? And then, you know, how how does a view like this also help to inform or or get buy in for you internally on on on what you've done last year and, in your approach moving forward? Mhmm. Yeah. The results of the poll really resonates with the, the way we would also be using the the benchmarking. We have reported, before, for example, to our audit committee on the on the benchmark analysis, and I expect we will do that again. So that was a soft, very high, second position, and then also informative disclosures, the the first position. For example, now looking at the the slide you're sharing, seeing that, in health care, just playing close to home, we have s four at 84. And, yes, it's it's high, but I expect it to be even higher probably for the way that we have, translated this four into our into our company. To us, those are the patients, those, those end users. So I would expect it to be, basically, definitely material for all, all the health care companies. Now at least all pharma companies, but I believe I saw your in your, in the companies that you have assessed that it was, very high in the in pharmaceuticals compared to other health care companies. And and that starts interesting conversation, right, also internally, and and with with peers because maybe some, some peers have not identified as for as their as the patients. Maybe they they see their responsibilities to to to end earlier than than when the products reach the patients since they don't they're not delivering them directly. There are health care providers as as actors in the value chain before. So, that perception is is causing to the to the way you you structure your own, strategy on on identifying who who are your who are your consumers and end users. And at the same time, I know that this is not something that will, will impact the way we think about this in the Novo Nordisk. There's a very high, patient centricity. So I don't see that changing, but it's, it's very interesting, and it informs, also some some meetings, peer meetings that we have had with, our pharma peers, on how, s four has has been seen. Thank you, Samuel. And, jumping jumping into this next view, this was an interesting conversation we had about five minutes before this kicked off, Gemma. And and the relationship that to s four that that Samuel was just talking about, I think, kind of dovetails nicely into that conversation. So, we were looking at, IROs by value chain segment, and, and then IROs reported by time horizon. And, I wanted to specifically highlight these charts because this has been one of the the the more confusing areas from from clients that I've supported through this process in kind of thinking about how do I how do I focus on a specific time horizon. And and then how do I think about value chain segment in terms of, like, is it a risk for my business because it's created for me and impacts downstream? Or is that actually downstream and I need to be thinking about this differently? I think some of these results might highlight, a lack of a lack of clarity in in implementation of this. So I wanted to to kind of pop this over your way and get your thoughts on on what you're seeing here and, and some of some of the takeaways that, you know, you you can share back to our audience. Sure. Yes. That was actually one of of of the of the visuals that, I found quite interesting, especially when we were talking about some of the social standards. We we do know s two two s four as value chain standards in the sense that, workers in the value chain affected communities and consumers upstream, downstream in certain cases, have have been thought from, in some cases, from a due diligence and impact materiality perspective. So when you're actually thinking about, who are the affected stakeholder groups that are impacted by by the actions of the company, you would always consider that from the optics of those affected stakeholders. So there's an there's an intrinsic and explicit relationship in the sense that the company is either causing or contribute contributing to the impacts. It could also be directly linked, but let me focus on these two. So there's always the subject of the company because the company is the one that is subject to the CSR deal reporting. But we have to put ourselves, you know, through the optics, a lenses of the effect of the stakeholder group. So, of course, the policies, the actions, and the targets are actually set by the company, but we consider that from the impact that these are causing on these groups of workers in the value chain or the portfolio, of, investees in the case of financial institutions. So this is something that it's it's very interesting. I don't think that this will actually change the content, to be honest, but I think it's important to to understand how we were thinking about those, you know, from an impact perspective. On the on the time horizon, and it was a good, conversation the way we had, I think that what we hear from companies as well is that the time horizon of zero to one, one, you know, one to five, and over five, which is flexible because we give the option to be flexible in in in the cross cutting standards. Some sometimes, it's difficult, for companies, you know, to to to put the cuts, yeah, on on environment. There's a cumulative effect, yes, on on climate change, on pollution. So maybe it's a matter of time and maturity, whereby we are going to probably see more defined time buckets rather than having, as as we see in your report, that some of the companies are choosing, you know, in the case of potential, because it's only about potential, impacts, you know, from short to the long term. But, again, I think that this is actually fine tuning and maybe, working in in the cautious side, which, honestly, I I do fully understand. Thank you, Gemma. Really, really interesting insights. And, I'm sure, again, as as we continue on this practice and, and companies are going through this, you know, a second or third time, all of these this will kind of become clearer through through that, that that process of of just replication and, and and learning from experience. At this point, I am going to hand back over to Donato to, to take us through the next section. Thank you. Thank you, Ian. So now that we've got a picture of materiality across sectors and time zones sorry, time zones. Time arises, I want to say. Let's let's go beyond, just the reporting scope. Right, but, like, let's keep in mind that this is not reporting for reporting sake, but, actually, it should should support decision making. So let's try to read the the the insights from, from that perspective. And, I I have a a couple of charts here that can, help us think in that in that way. So I think one of the the the the biggest innovations of of the ESRs is introducing the mechanism of IROs. Right? And maybe there is a lot that can be learned by looking simply at the distribution of of IROs. And, Jeff, I believe it was, your your remark at the beginning that you were, sort of impressed with the fact that the distribution was surprising. Indeed indeed, we we see we see that, across all all the standards. Overall, the the tone of IROs, it's towards the negative side. So in other in other words, if we look at the overall distribution, you can easily spot it here, looking at the colors. Negative impact and and risks are the majority of, of of IROs. So especially when it comes to negative impact. So I wanted I wanted to first, pick your your brain on on that, Gemma. And, Samuel, why why do you think is that the case? Why there is such prevalence of, you know, sort of negative direction over over the positive one? I don't know who wants to to go first. I can I can start? Yeah. I it is something, I noticed too when I read the report. I'm not too surprised, by it because I think there is a bit of an expectation that positive impacts and opportunities have a higher burden of proof. It's a bit conservative to to go more on the on the negative side. Positive impacts are difficult to to demonstrate. And, also, I believe, and, Gemma mentioned something about it earlier, Companies are a bit uncertain how to define them. Is it a positive impact or a or mitigation of a risk? So it's a it's that I think it's that difficulty to identify the positive impacts. And maybe on opportunities, there is a there's a bit of a clash with the general habits of, of disclosing the financial outlook. So companies prefer maybe not to be too too transparent on the on the opportunity side about future gains out of sustainability matters. Yeah. I mean, I I would probably add that, when when it comes to impact materiality, in particular negative impacts, the inspiration and the definition comes from due diligence. Due diligence is about negative impacts, so it's a very well defined concept. I think that, it's also clear that the heightened risk of negative impacts may sit in certain sectors and geographies. So I think that there's actually probably more clarity on that rather than the positive impacts. On the positive impacts, we have to get, like, a definition, which, obviously, we we need to see whether we could actually also put with the with the simplification, because we understand that there's some cautioner, from from the companies on that. And and then, we we we need to also see how it plays. We also see that, in certain sectors where there's, a high level of regulation, s one, s four, for example, there's more of a tendency, especially for European headquarter companies, which are probably the majority in your sample, to actually move to positive impacts because, there's an understanding, an implicit one, that companies will not be, you know, will will not be performing in the illegal, you know, act, part of the spectrum. So anything they do is going to be a positive impact. So I think that this probably needs some fine tuning. Yeah. But we we we do see that it depends on the standards. Right? And and probably it's not surprising because there's more clarity and clarity for both preparers and auditors about what it means. It definitely definitely depends on on the standards and, as as we can see from from, this graph, right, there are standards that are more balanced, like, for example, climate and maybe just a reflection of the maturity of companies, disclosures, in that. But it also depends on the sectors, which is the the graph on the right. And I think, Gemma, you and I had a conversation in preparing this, like, asking, is is there a difference with between the manufacturing or sort of, like, hard Yeah. Sectors versus the soft the services, the financial services. We can actually see that. I I will say that probably financials is the most optimist, sector that we have. Right? In our data with the, you know, quite high percentage, 32% positive impacts, maybe all that money that they're they're lending, like that, capital, enablement, sort of functionality. And we can also identify those sectors that are a bit more nervous, like they have the biggest share of of of risk, in that sense. And and I think the other the other kind of analysis that is possible to do here, which is quite intriguing, is, keeping in mind the theory of double materiality. Right? The idea is that negative impacts generating to material risk for organizations. Right? Now the reality is that, yes, for some standards, we see quite some balance in that. And, again, climate is is a good example. But if you take, for example, here, e two pollution or even e four, or s two, like, the percentage of negative impacts compared to the percentage of of risk, there there is there is a big gap. So Right. This tells us that it takes a lot of material negative impacts for a company to recognize a material risk. Yeah. So Also, coupled with that, I will probably say that, there's probably more mature methodologies and consensus about, you know, what, in in which areas the impact will convert into risk and opportunities. Right? I mean, climate is a systemic risk, so we understand that. Consumers, we we we understand the linkage as well. But the ones that you mentioned, indeed, Donato Calace, the the that that conversion rate, if I may call it like that, is actually less clear. Mhmm. And and, Samuel, from your perspective as, you know, a reporter, but also doing the analysis that is behind this. Right? The idea is that if we see a lot of negative impacts right now and and a smaller share of of material risk, like, we should expect the the risk to grow, right, and reflect the bigger bigger share of of impacts. Do do you see that happen? Do you think that is is is going to happen? I think it it is going to happen, but it's, we're still, it's still a bit early for that, because I'm thinking that, the wave one companies are the ones that are expected to have also more mature risk function, and that would lead to, I I would expect, an integration into the and that is the consequence that, it is a bit more difficult to for sustainability risks to make the cut in a in a in a in a risk, risk profile. So it's and particularly for standards like, yeah, with the ones you're mentioning, e four, it's, it's difficult to provide a quantification substance that to, yeah, substantiate the the risks than then are compared against the the the other operational ones that the companies have. So, I believe this is where maturity will, will change, things over time. But at at this at this point, I'm afraid it's it's because of the of the lower integration. And and don't get me wrong. I think it's the it's the right direction, the division with the year end. But there is a there's this downside, of immaturity of, of integration of sustainability in the risk function. And I and I think the common thread across your your comments and your views is that we can expect this picture to change and evolve, over time, which, you know, it's it's it's it's a very tangible, example of that idea that of dynamic materiality that, you know, for so long, we've been talking about, in this field. Alright. So we have ten more minutes. So I think we can move on to the final segment of of this conversation. So first of all, I think I'll I'll, we'll give a gift to everybody that stayed with us for, for for this hour. We actually will launch the report next week. But for those of you that are here with us, if you go to the docs, section of of the webinar, you can download it. And you can download it also with the other white papers that we release, this year. We released a full check survey at the beginning of the year asking experts what are the most, important insight that we're expecting from, the first wave of CSRE statements. And then we also published a white paper or specifically on on on IROs. So if you want your crash course on everything, CSRD and double market, I guess, this is your opportunity to download, download these. And with that said, I think we can move to, to the q and a. I I will probably, I will probably kick it off using my privilege as as moderator to ask a question to, to Gemma. So, Gemma, we we all know that, EFRAG received a mandate to simplify the set one, of, of standards. So what can you tell us about the work that is happening? We know that in the work plan, there is a plan to look at at at data from CSRD with one companies. So what can you tell us about what's happening there? How much time do I have tonight? Okay. So what what what I could say is that we we have a very clear mandate. So, let let me say that the first milestone will be to, publish for public consultations, at the July, beginning of August, from four to six weeks. We are defining that with the board the, exposure draft, with the intention of having, you know, September and October to fine tune and send to the commission in, at the October. So we are working against a very tight time scale. I think we are used to it, but not, you know, in the same sort of, like, rush, if I could call it like that, that we have now. So, we have, we have had about 70, one to one bilateral meetings with, preparers, auditors, civil society, and and what we are doing now is actually understanding where the themes are, where, you know, we challenges exist. We had the input call period finishing about two weeks ago. So we know what where companies struggle and and where what the the proposal will be. So, so, basically, we we are now going through all these inputs, working with the board, and and obviously the tech and support in how this simplification could take place. But materiality is an area that we have heard the message loud and clear. It's guidance. It's probably simplification, in the process, in the disclosure of the process. So we're working on that right now. Thank you, Gemma. More more fun to come. And and I'm sure LinkedIn will will keep us all informed, as as everything progresses. So, next question we have from Vincent, and thank you, Vincent. Given that biodiversity loss and ecosystem collapse is the second risk by severity in the next ten years according to the World Economic Forum, What do you make of the fact that only 44% of companies reported on it? And, Gemma, I'm I'm gonna I'm gonna point this one at both of you because it it gets it gets into to some of the some of the how do how do we kind of triangulate all of this information in a in a changing world? Gemma, starting with you, you know, what what what's your take on that? Sorry, Ian. Sorry. I I got some interruptions, but do you mind reformulating, the question? Sure. So, the fact that biodiversity loss is is kind of a a huge risk that we're facing globally, and only 44% of companies reported on on biodiversity. You know, what how do you interpret that? No. We were just discussing that, earlier on. I mean, methodologies, the, consensus that we have seen on climate being a systemic risk. Also, the fact that TCFD had been working on that for a number of years. I think that actually put climate, you know, ahead of the game. We are seeing, far more traction in biodiversity. Obviously, TNFD, it's playing its role. We we have a standard that it's very entity specific, based. So it's a standard where probably the amount of standardized metrics is not similar to the other e standards because, biodiversity is a local risk. You know, you you need to go to that level. So I think that it needs more education. It needs more maturity and and certainly methodology. So, we know that companies may not be reporting it now, but we had a number of conversations and understand that this is actually something that in the short term we're going to see more of. Thanks, Gemma. And Samuel, as a as a practitioner, having thought long and hard about biodiversity ecosystem services and and kind of, impacts that you're having through the value chain, risks, etcetera, like, what is your take on this and and how is Novo Nordisk kind of leading the pack when it comes to to thinking about this in pharma? Yeah. And, honestly, well, to what, I don't have much to add to what, Gemma said, because it's really about, I think, maturity, in in biodiversity. It's, it's difficult, and we have a lot much less definitions, when like, for example, when you when you talk about climate, you have the greenhouse gas protocol. And a lot of the information are out there for understanders, but for biodiversity, it's it's everything, very value early stage. So it's just very difficult to to buy, I believe. When when reading the reports, actually was one of the takeaways even from, from you in the report, and I was looking at in again at, the the pharma health care sector. I was, seeing it also there. It was highlighted how the dependency on the natural resources is is very high for for for our sector. So, outcome is not as is not so material or or it's not reported on. It it's definitely one of, of the interesting takeaways. For us, it is, is definitely is definitely as a negative impact, relevant and particularly, obviously, for the, yeah, for the impact on on biodiversity. And then you can argue also also from a risk perspective on the dependence on the on the natural resources for for the manufacture of, of a pharmaceutical, which is a a risk that is not not up there to the negative impact, but it's definitely one that we are monitoring. Great. I think we have time for one last question, and apologies to all the others. We'll we'll collect the questions and try to, reply offline, later. So this question is from Paul, Shortland. With the current news on CSRD and its potential changes, will CSRD still maintain its gold standard hat, or could it lose out and to who? Slightly political question, I guess, there. Who who would like to try to answer this one? Maybe we should give it to the politicians, Donato. That's a big one. So, any thoughts, Samuel? I mean, from a from a reporter perspective, what what will be your best and best case scenario? What will be you, you know, easier for you in in that sense? I could say so. I don't I don't know what the what Paul was meant in terms of a a lose out to to who. For example, if the the reference is to to the standards of the the ISSP, where there's only financial materiality as a as a decisional lens for the for the disclosure, I think it is it was fundamental for for the, for the SRSs to keep the double money IT. We have so many so many other stakeholders, that are relevant for us. It cannot be limited to to to investors. And, obviously, it's it's an important, aspect of the preparers to think who their audience is. And for us, it's definitely not only the investors. We can't deny that they are almost among the most important ones, but they're not the only ones. So it's important also to look at the at impacts. I don't know if that's what Paul meant, but at least this is my first, thought. I I I would agree with with Samuel, and I think that your study actually, you know, provides the evidence. If, you know, impacts are excluded, how meaningful would be the report? Right? Because materiality drives the disclosures. So I I think from us, from the beginning, it's not only, you know, EFRAG with the mandate from the commission, but also the full sustainable finance package, you know, from Europe and China now. Right? Because it's we are not allowed, you know, on on double materiality. So, very fundamental, and you are proving how, you know, useful evidence based, this is. You know? And that seems to me, great, highlight to end our conversation, how important impact reporting remains. Thank you, Gemma and Samuel, for for joining today. And thank you for for your insights. Thanks again to our team for their excellent research, and thank you to everybody for joining us. And please read our report, share it, and we look forward for further conversation. Thank you. Thank you, Aaron.