CSRD Implementation in the Real Estate Sector

Purpose & research question: The purpose of this study is to ascertain and explain how companies in the real estate sector can utilize various management control systems to implement the Corporate Sustainability Reporting Directive (CSRD). The study also aims to identify which control systems are perceived as particularly effective. In pursuit of these aims, the following research questions are addressed: How can companies in the real estate sector use different management control systems to implement CSRD? Which management control systems, according to Malmi and Brown’s framework, are highlighted as especially useful in the implementation of CSRD? Method: This study employs a qualitative research design with an abductive approach. Empirical data was gathered through semi-structured interviews conducted with four respondents representing four distinct organizations. All interviewees are actively engaged in the implementation and operationalization of the CSRD within their respective companies. Conclusions: CSRD represents a significant shift in how sustainability is to be integrated into and reported within corporate governance. The study shows that real estate companies are responding to this change by activating a variety of management control systems. The most central control systems are those that provide structure, direction, and follow-up. However, it is evident that the effectiveness of these tools depends on how they are used. In organizations where control is integrated, iterative, and dialogue-based, more favorable conditions are created for CSRD to function as more than a legal requirement – as a driver for genuine and long-term sustainable development.