The Hidden Costs of Manual CSRD Reporting

Introduction

At first glance, handling your CSRD reporting manually—with spreadsheets and shared folders—seems like the practical choice. It costs nothing upfront, and most small and growing businesses (SMEs) already use Excel or Google Sheets. But as sustainability data grows in complexity, the real costs of manual CSRD reporting begin to surface: lost hours, duplicated effort, and costly errors that can undermine both compliance and credibility.

The CSRD Directive (EU) 2022/2464 requires companies to disclose standardised, verifiable sustainability data. While the law doesn’t prescribe specific tools, the process must be transparent, traceable, and auditable. For many small and growing businesses (SMEs), manual methods simply don’t scale.

Why Manual CSRD Reporting Feels “Free” — But Isn’t

Manual reporting relies on spreadsheets, email attachments, and ad hoc file storage. On paper, this approach has no direct cost, but it hides expenses that can drain resources over time:

• Labour hours: Collecting and verifying data across departments can consume 10–20 hours per month.
• Errors and rework: Without version control, even small formula mistakes can invalidate entire reports.
• Inefficiency: Each new reporting cycle starts from scratch, with no automated data pull or validation.
• Opportunity cost: Staff spend time copying data instead of improving performance or reducing emissions.

Over a year, a 50-person company might spend the equivalent of €5,000–€10,000 in staff time managing CSRD data manually—without realising it.

Compliance Risk and Data Quality

Under the CSRD, sustainability disclosures must be comparable, reliable, and verifiable. According to Directive Article 19a, reports should allow stakeholders—investors, regulators, and customers—to evaluate performance consistently across the EU.

Manual methods make it difficult to meet these expectations:

• Data inconsistency: When different teams track energy, waste, and workforce data separately, results are rarely aligned.
• Audit trail gaps: Without version control or access logs, assurance providers may challenge data reliability.
• Poor comparability: Spreadsheets lack the structured data format expected under the European Sustainability Reporting Standards (ESRS).

As a result, companies relying solely on manual processes risk non-conformance or increased assurance costs when reports are reviewed.

Scaling Challenges for Growing SMEs

The VSME Standard from EFRAG encourages small and growing businesses (SMEs) to use proportionate methods for reporting, such as the Basic or Comprehensive module. Even so, it assumes consistency, annual comparability, and integration across environmental and social metrics.

For small and growing businesses (SMEs) with:

• Multiple sites or suppliers,
• Complex workforce data, or
• Client reporting requests across the supply chain,

manual CSRD reporting becomes unmanageable. Every new site adds another set of spreadsheets to maintain and cross-check.

Comparing Manual vs Automated Approaches

Tools designed for CSRD reporting provide data structure, traceability, and version control out of the box. They also align with the ESRS data model, easing future assurance reviews.

When Manual Reporting Still Makes Sense

Manual reporting can work for:

• Micro-companies with fewer than 10 employees;
• Early-stage SMEs exploring sustainability metrics for the first time;
• Companies preparing baseline data before adopting software.

However, after the first reporting cycle, most small and growing businesses (SMEs) find automation a necessary step to reduce workload and maintain accuracy.

Manual vs Software CSRD Reporting: Complete Comparison

Frequently Asked Questions

Is manual CSRD reporting still compliant?

Yes, manual reporting is compliant as long as data is accurate, consistent, and verifiable. However, maintaining these standards with spreadsheets becomes harder as data volume grows. Tools designed for CSRD reporting help automate checks and ensure alignment with ESRS.

Learn how to report CSRD data accurately →

What are the biggest hidden costs of manual CSRD reporting?

The main costs are time and inefficiency. A mid-sized SME can spend over 150 hours a year gathering and cleaning data. Errors often require extra assurance work or re-submissions, adding both internal and external costs.

See how to reduce rework and errors →

When should a small and growing business (SME) switch from manual to software-based CSRD reporting?

Most SMEs switch after their first reporting cycle, once they see how much time manual data management consumes. The ideal time to automate is when your reporting includes multiple sites, metrics, or assurance reviews.

Compare manual vs automated approaches →

Key Terms

• CSRD: Corporate Sustainability Reporting Directive (EU) 2022/2464 requiring standardised sustainability disclosures.
• VSME: Voluntary Standard for non-listed Micro, Small and Medium-sized Enterprises (EFRAG, 2024).
• ESRS: European Sustainability Reporting Standards, defining the required data structure.
• Assurance: Independent verification of reported data accuracy.
• Audit Trail: Record showing how and when data was collected, changed, and verified.

Conclusion

Manual CSRD reporting may appear cost-free, but in reality, it’s an expensive hidden drain on time and accuracy. The CSRD aims for transparent, consistent, and reliable sustainability data—something that’s difficult to achieve without structured systems.

For most small and growing businesses (SMEs), investing in automation pays off quickly, freeing up teams to focus on sustainability improvements rather than spreadsheet management.

Want to understand the true cost of manual vs. automated reporting for your business? Use our ROI calculator to compare the financial impact:

This tool helps you quantify the hidden costs of manual reporting and the potential savings from automation.

Explore CSRD compliance tools for SMEs →