Beyond Compliance: Leveraging CSRD for Strategic Value Creation

Abstract

In 2024, the European Union’s Corporate Sustainability Reporting Directive (CSRD) dramatically expanded mandatory sustainability disclosures for thousands of companies. This thesis investigates how businesses can leverage this complex regulatory requirement to enhance performance measurement and management systems instead of just treating it as a compliance exercise. The research is grounded in management control theory, applying the concept of a Management Control Systems (MCS) package as an overarching control framework and the Balanced Scorecard (BSC) and Simons’ Levers of Control (LOC) to make a more specific analysis of how sustainability metrics are integrated into strategic management processes. Empirically, the study uses two case companies, ‘Transcorp’ (logistics) and ‘Bankcorp’ (Banking), alongside interviews with industry experts to gain a broader understanding of CSRD’s role in practice.The findings reveal that CSRD can deliver strategic benefits when used beyond compliance. Companies that embed material sustainability metrics into performance tools (like balanced scorecards and dashboards) achieve stronger alignment of sustainability goals with business priorities, whereas those treating CSRD as a box-ticking exercise miss this potential. A key success factor is integrating sustainability data into core decision-making routines, ensuring that what gets reported externally is also managed internally. The research concludes that when used proactively, CSRD can evolve from a reporting obligation into a trigger for linking strategy with sustainability performance. Ultimately, the study extends traditional management accounting frameworks into the sustainability domain and provides practical guidance for using CSRD as a strategic management tool.