“Dry-Run” as a CSRD preparation tool 

The new Corporate Sustainability Reporting Directive (CSRD) approved on 28 November 2022 by the European Council applies from 2024 to companies listed and already subject to the Non-Financial Reporting Directive (NFRD). A second, even larger wave is looming on the horizon, promising to broaden the scope of corporate transparency. 

The objectives of the “Dry-Run” 

Among the more than 49,000 companies affected by the CSRD in Europe, a majority will be from 2026 for the 2025 financial year, when the application will also cover large companies which are not subject to the NFRD and which meet two of the following three criteria for the previous two financial years: 

• 250 employees 
• €40M in net turnover 
• €25M in total assets (or balance sheet total) 

In order to anticipate the challenges linked to this regulation, the “Dry-Run”, a sort of simulated external audit, is by far the most relevant solution.  

With the main objective of identifying gaps, the “Dry-Run” reviews the assessment of double materiality (effect of the company's activities on the environment, and/or of the environment on the company's activities) made by the company, its compliance with the European Sustainability Reporting Standards (ESRS), as well as its sustainability report in order to best prepare its CSRD report. 

Then, the “Dry-Run” enables the improvement of processes and data collection by identifying the different internal centers and external stakeholders likely to produce and provide the data required by the ESRS. 

The final evaluation then draws a conclusion on the various points to be improved with a view to the final external audit. 

Advantages of a “Dry-Run” 

Preparing the CSRD report starting with a “Dry-Run” saves valuable time for firms. Serving as a full-scale exercise, it allows an inventory of the company's maturity level on CSRD and its data collection and production processes, which can be long and significant efforts to undertake. It gives a better understanding of the work to be carried out, its different stages and the time required to construct the final report. 

Since it is not publicly disclosed and is used as a construction support for the final report, it is also an excellent way to reduce the risks of errors, oversights, and non-compliance in general.  

All these parameters give the company a head start and thus enable a more efficient external audit. 

Awareness, gap analysis or “Dry-Run”? 

The “Dry-Run” is not the only tool helping companies prepare for their first CSRD audit. In order to draw attention to the importance of the CSRD and educate on the key points of this directive, raising awareness through tailor-made training remains a useful and easy way to raise the level of knowledge of companies and the collaborators involved.  

As part of the review of one or more defined procedures, a gap analysis can also prove to be a very robust compliance tool, as it can perfectly identify the gap between regulatory expectations and the information disclosed by the company. 

A “Dry-Run” within the framework of the CSRD, however, remains the most complete and effective tool. It constitutes an important stage of preparation, allowing companies to prepare proactively and effectively, thus minimizing risks and maximizing the effectiveness of the official audit.