Making the Performance Management System integrate the European Sustainability Reporting Standards (ESRSs)

The research on potential ways to address sustainability at a corporate level has become a trendy topic in the last 20 years. To date, many organizations around the world reported their activities in terms of environmental, social, and governance performance on a voluntary basis. Starting from 2024, almost 50,000 companies will be subject to mandatory sustainability reporting in view of the recent introduction of the Corporate Sustainability Reporting Directive (CSRD). Accordingly, organizations need to start addressing sustainability at a strategic level, which is still missing. The novelty introduced by the CSRD can be seen as an opportunity to provide management accounting scholars with a way to design and implement a sustainability tool to support managers in addressing sustainability as well as making the organizations compliant with the ESRS. To this end, we developed a four-dimensional framework by reviewing the accounting literature on sustainability performance management and the disclosure requirements introduced by the CSRD. In this view, the sustainability performance management framework is designed to adequately support organizations in integrating sustainability value drivers at a strategic level and in making the organizations compliant to the CSRD.