Integrating CSRD into Digital Governance Platforms

Abstract

Sustainability reporting has shifted from a voluntary activity to a formal regulatory obligation under the European Union's Corporate Sustainability Reporting Directive (CSRD), which requires firms to produce standardized, auditable, and comparable ESG data. For project-based multinational firms (PBMFs), this requirement introduces a distinct organizational challenge: while CSRD obligations are defined at the corporate and regulatory levels, the underlying sustainability data is generated within temporary, geographically dispersed projects operating under intense delivery pressure. This creates a structural gap between where compliance accountability sits and where data is actually produced.

This study examines the organizational and technical enablers that support the integration of ESG and CSRD requirements into digital governance platforms in PBMFs. To examine this question, a qualitative Soft Systems Action Research case study was conducted within a large maritime services organization. Data were collected through scenario-based reflective interviews with three participants at the group and project levels, supported by logbook entries.

The findings reveal that CSRD integration fails not due to employee unwillingness or inadequate technology, but because of three compounding structural barriers: technical fragmentation across disconnected systems, governance fragmentation across organizational levels, and a delivery-first incentive structure that leaves sustainability tasks without formal consequence at the project level. Two mechanisms explain why this pattern resets with every reporting cycle rather than improving over time. Interpretive drift describes how locally naturalized definitions of sustainability indicators calcify across disconnected units, making retroactive standardization progressively harder the longer it is deferred. Motivational attenuation describes how the urgency and meaning of CSRD requirements are stripped away as they are translated down the organizational hierarchy, so that by the time the regulation reaches the project floor, it is experienced as an administrative imposition rather than a meaningful governance obligation.

Four enablers emerged from the co-design phase as the conditions necessary to break this pattern: proactive data planning, dedicated sustainability roles, workflow simplicity, and embedded governance checkpoints. Critically, these enablers only function as an integrated system, and their sequencing matters as much as their content. The study extends existing literature by locating upstream embedding failure in structural rather than behavioral conditions, and contributes two named mechanisms (interpretive drift and motivational attenuation) that existing frameworks do not theorize. At the policy level, the findings suggest that CSRD implementation guidance does not yet adequately acknowledge the operational translation gap specific to project-based organizational forms.