Starting July 1, 2024, large firms in Sweden will need to assess and report their impacts, risks, and opportunities across their value chain. This marks a significant shift in how companies must report on sustainability, requiring not only transparency but also specific targets, performance indicators, and progression towards set targets. The CSRD is part of the EU's broader effort to drive the transition towards a more sustainable economy.
This research project seeks to explore how the implementation of CSRD affects firms' sustainability reporting and their management accounting practices. More specifically, the project aims to understand how companies adapt their internal systems and processes to meet CSRD's requirements, how different industries respond to the regulation, and the overall market reactions to this new form of sustainability reporting.
To achieve its aims, the project will address the following key research questions:
- How does CSRD influence firms’ sustainability reporting and management accounting practices?
- How does CSRD influence the reporting content and language, and what reporting best practices emerge in different industries?
- How does the capital market react to CSRD reporting?
The project is divided into three sub-studies, each focusing on different perspectives:
Sub-study 1: Changes in Reporting and Accounting Practices
This sub-study will examine how firms change their reporting and management accounting practices to comply with CSRD. The study will be based on interviews with affected companies, first and foremost companies listed on Nasdaq Stockholm, but also non-listed firms, as well as annual reports. Since the EU communicated regulatory changes in February 2025, the sub-study also explores how firms handle fast regulatory change.
Sub-study 2: Industry-Level Changes
This sub-study will compare the reporting practices across industries to understand how industry-specific norms and regulations influence the adaptation to CSRD. This analysis will highlight best practices in reporting and the challenges firms face in aligning their reports with the new European Sustainability Reporting Standards (ESRS).
Sub-study 3: Market Reactions
This sub-study will analyze the market's reactions to CSRD reporting, i.e. how investors and other capital market participants react to the increased transparency and whether or not the new regulation leads to more informed decision-making through more reliable ESG data.
The project is critical for understanding the broader effects of the CSRD on companies' sustainability efforts and the financial market. By focusing on both firm-level changes and market reactions, the researchers aim to bridge the gap between regulatory implementation and real-world outcomes. Their goal is to contribute to the academic literature on sustainability regulation and management accounting, which remains relatively underexplored.
The project will provide valuable insights for companies looking to adapt to the new regulations, helping them improve their reporting processes. It will also be of interest to policymakers, as it will assess whether CSRD is achieving its intended goals of fostering a sustainable economy and guiding market investments in greener, more responsible companies.
The project runs during January 2025 and December 2026 and is financed by a research grant from the Jan Wallander and Tom Hedelius Foundation and the Tore Browaldh Foundation.
