SDC is ready with tools for the banks’ CSRD challenge

Banks are also affected by the new, complex ESG reporting requirements from the EU. SDC is now offering a shared Nordic tool for CSRD reporting to its partner banks. This enables banks to complete the implementation of the new EU sustainable directive, which for some banks already applies to 2024 data. The first seven banks have already agreed to participate in the project.

SDC is ready to lend a helping hand to the partner banks that are struggling with the new CSRD directive from the EU, which requires reporting on countless data points. SDC has reached an agreement on a shared Nordic tool that will assist the banks with reporting and reduce local administration within the banks.

“Several of our affiliated financial institutions have requested a shared solution across the SDC collaboration. In this context, they asked us to help find a solution, and naturally, we immediately accepted the task. We have worked intensively with our affiliated financial institutions to identify their specific needs and what they want the tool to assist with, while also exploring the market for suppliers who could meet those requirements. The result is that SDC now can offer a third-party solution for our Nordic banks, which significantly reduces the administrative burden of CSRD reporting,” says Niklas Høj, Area Director at SDC, responsible for the core banking system and applications.

The new Corporate Sustainability Reporting Directive (CSRD) from EU, with 1,147 sustainability metrics, requires companies to report on their sustainability efforts on the same level as financial reporting. This presents a big task for many companies, especially for the banks that are large enough to be required to report. The CSRD introduces new obligations, including conducting a double materiality analysis and reporting on countless data points while ensuring proper documentation. This creates challenges for financial institutions in terms of both time and money.

SDC’s goal is to develop common Nordic solutions, assist member banks, and tackle tasks together. This is also one of the aims in the effort to find a tool that can assist with CSRD reporting. A tool that is expected to reduce the administrative burden for banks and enable them to report on the new directive without being more strained than necessary.

Seven banks – along with SDC itself – are participating in the project

The new solution offered within the SDC framework is provided through an external supplier, Greenomy, and facilitates data management as well as structured workflows for CSRD reporting based on standardized data points. This solution enables SDC’s partner banks to efficiently navigate and comply with the EU's CSRD regulations. Greenomy are experts in the field and are ‘friends’ of the EFRAG network, the European Financial Reporting Advisory Group. Greenomy’s Head of Global Accounts, Kiriil Radchenkov, is pleased with the new collaboration.

"Our collaboration with SDC is a testament to our shared vision of easing and ensuring seamless compliance with the CSRD directive, enabling banks to efficiently manage their ESG data while contributing to a more sustainable future," says Kiriil Radchenkov.

Six banks in Denmark have already shown interest in proceeding with the solution, and since the tool can be used across the Nordic region, all financial institutions within the SDC collaboration in Norway, Sweden, and the Faroe Islands also have the opportunity to join when and if they are obligated to follow the new the new regulations. This also means that a Swedish bank has expressed interest.

Starting in 2025, the CSRD directive will primarily apply to large and medium-sized banks, but in the following years, an increasing number of smaller banks will also be impacted by the EU requirements. SDC itself must align with the CSRD directive by 2025 and, together with its member banks, has agreed to adopt the shared reporting solution.