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2024 has been a defining moment for corporate sustainability reporting. For the first time, companies across the European Union have been required to report in accordance with the Corporate Sustainability Reporting Directive (CSRD)—a regulation that demands more than just general statements about sustainability. It sets a new bar for transparency, accountability, and action.

Our new report takes stock of how this first year of CSRD implementation is being translated into practice—specifically within the Belgian banking sector. By benchmarking the sustainability disclosures of six major banks (BNP Paribas Fortis, KBC, Belfius, ING Belgium, Crelan, and Argenta), we aim to provide a grounded and comparative view of how this regulation is reshaping sustainability reporting, and where banks are already stepping up—or falling short.

Reading the 2024 sustainability reports of these six banks offers an encouraging glimpse into how sustainability is becoming deeply embedded in financial institutions. In the past, environmental, social, and governance (ESG) topics were often managed in silos or treated as side projects. That era is fading. Today, we're seeing a more systemic shift: banks are beginning to weave sustainability into core operations—credit risk assessments, product design, and supplier selection, among others.

The level of maturity varies, of course. While some banks are still in early implementation phases, others have already put sophisticated frameworks in place. Some banks have set targets for the decarbonization of their lending or investment portfolios. Others have begun linking management remuneration to ESG targets—an important signal of long-term commitment, even if these variable compensation elements remain modest for now.

As CSRD pushes for standardized reporting, a pattern begins to emerge across the banks: certain sustainability topics are consistently identified as material. Unsurprisingly, these include Climate Change, Own Workforce, Consumers and End-users, and Business Conduct—issues that strike at the heart of the banking business model.

But that doesn’t mean every bank is telling the same story. Outside of these core topics, there is significant divergence in what each bank considers material. Part of this is structural—each bank operates with a slightly different business model and risk exposure. However, a lack of unified criteria for assessing materiality also plays a role. This variation makes direct comparison more complex than one might expect from a harmonized framework.

There’s no question that climate change is now a top priority for all six banks. Over the past few years, many have ramped up their climate risk assessment capabilities, conducting scenario analyses and building ESG scoring frameworks into their client evaluations. Several have even begun incorporating climate considerations into their lending decisions—a notable shift.

However, when we look at the banks' climate impact, particularly around financed emissions (i.e., emissions linked to their lending and investment portfolios), a gap emerges. While most banks have set targets to reduce their operational emissions, only a few have established clear, binding goals to align their portfolios with the Paris Agreement. Comprehensive transition plans are still the exception, not the rule.

So, while progress is undeniable, the road to net zero remains long—and uneven.

CSRD’s purpose is clear: to enable comparability. But the first year of implementation shows that harmonization is still a work in progress. Without sector-specific guidance, banks have adopted varying methodologies and definitions—particularly in areas like greenhouse gas (GHG) reporting and EU Taxonomy alignment. As a result, the values disclosed reflect not only actual performance but also differences in methodological interpretation.

The result? Reports that sometimes look similar on the surface but differ significantly in depth and methodology. For analysts and stakeholders, this limits the utility of the disclosures for making side-by-side comparisons—one of the core promises of the CSRD.

Belgian banks are generally mature when it comes to workforce-related policies. Most have strong frameworks in place for employee well-being, training, and health & safety, with relatively low workplace incident rates.

However, when we look at diversity and inclusion, the picture becomes more mixed. Representation of women in top management varies significantly. Pay gaps persist as well, ranging from 11% at Belfius to 31% at KBC. While some differences can be explained by structural factors, they underscore the need for continued efforts to advance equity.

The first cycle of CSRD reporting has laid a promising foundation. It has brought sustainability out of the margins and into the strategic heart of many banks. Governance structures are evolving, risk frameworks are adapting, and new reporting practices are emerging.

But, the work is far from over.

Greater consistency in reporting approaches, more rigorous data collection, and clearer methodologies will be essential if the promise of CSRD is to be fully realized. Only with this kind of alignment will stakeholders—from investors to regulators to customers—be able to assess sustainability performance with confidence and clarity.

Our benchmark report provides a snapshot of where the sector stands today, but it also serves as a roadmap for what comes next. As more banks move from ambition to implementation, we’ll be watching closely—and continuing to support the transition toward a more sustainable, transparent, and accountable financial system.