CSRD

CSRD – What do I need to Report?

Certitude Sustainability, Uncategorized ,

The reporting requirements of the EU Corporate Sustainability Reporting Directive (CSRD) are yet to be fully established through reporting standards. However, the draft proposals of the European Financial Reporting Advisory Group (EFRAG) will be the basis on which the standards are developed.

These proposals call for the following principles to be followed:

  • Quality of Information – to ensure sustainability reporting is of an equal standard to financial reporting it must be relevant, comparable, understandable and reliable/verifiable.
  • Retrospective and Forward Looking – reporting will need to cover policies, targets, action plans and goal alignment to enable transition trajectories to be assessed and help ensure that targets are linked to outcomes, set against a baseline year and time-bound, associated with relevant KPIs, where feasible science-based, and tested against stakeholders’ expectations.
  • Levels and boundaries of reporting – sustainability reporting must go beyond the scope of operations under the control of the reporting entity and into the value chain, products and services.
  • Double Materiality – that both financial and impact materiality are considered from the positive and negative perspectives.
  • Connectivity – to ensure the absence of gaps, overlaps and a lack of coherence, sustainability and financial reporting must be placed on an equal footing and timing.

Within 3 reporting areas:

  • Strategy
    • the sustainability aspects of the entity’s strategy and of its business model,
    • the materiality assessment process – how the entity determines what is material to be reported,
    • the specific governance, management responsibilities, processes and reporting procedures put in place to address and monitor sustainability matters.
  • Implementation
    • how the reporting entity translates its strategy into action through policies, targets, action plans and dedicated resources.
  • Performance measurement
    • how the reporting entity delivers against its policies and targets,
    • what is its transition trajectory,
    • including its past performance (retrospective information) and forward-looking perspectives.

And the 3 reporting subjects of ESG:

  • Environment – impacts to and from all environmental factors:
    • climate change mitigation and adaptation,
    • water & marine resources,
    • biodiversity & ecosystems,
    • circular economy,
    • pollution.
  • Social – impacts to and from all people factors over the scope of the entity’s whole ecosystem:
    • workforce,
    • value chain workers,
    • affected communities,
    • consumers/end users.
  • Governance+ – broader than traditionally considered under the concept of ‘governance.’
    • governance,
    • business & ethics,
    • management of the quality of relationships with stakeholders,
    • organisation,
    • innovation, reputation and brand management.

There is much to be done to prepare for CSRD and whilst the standards have yet to be finalised, preparations within your organisation should be commencing now.

If you need help in your preparations for CSRD, please don’t hesitate to contact us.  We have a wealth of experience with company reporting from a GHG, Sustainability and a CSR perspective as both consultants and independent assurers.  Let us help you build your reporting requirements into your core business processes and provide clarity for all your stakeholders.

EU Leading the way in Mandatory Corporate Sustainability Reporting

Certitude Sustainability, Uncategorized , ,

Last year the EU introduced of the Corporate Sustainability Reporting Directive (CSRD). This new framework will be rolled out from 2024, and will require companies to report on how sustainability issues impact their business and how their operations affect people and planet, together with governance elements, and must specifically include:                            

  • Environmental matters – including climate risk reporting. 
  • Social matters and treatment of employees.
  • Human rights.
  • Anti-corruption and bribery.
  • Diversity on company boards (age, gender, educational and professional background).

These reports must be independently assured to ensure they are accurate and complete.

Approximately 50,000 companies are expected to be obligated under CSRD, this includes:

  • Companies listed in the EU, and large companies (one that meets two out of three of the following criteria: more than 250 employees, a turnover of over €40 million and over €20m total assets).
  • Listed SMEs. 
  • Non-EU companies with a net turnover of €150 million in the EU, and with at least one subsidiary or branch in the EU.

CSRD requirements will be introduced in phases:

From 1/1/24Companies already reporting under the Non-Financial Reporting Directive (reports to be submitted in 2025 covering 2024 data)
From 1/1/25Large companies that are not currently subject to NFRD (reports to be submitted in 2026 covering 2025 data)
From 1/1/26Listed SMEs, small and non-complex credit institutions and captive insurance undertakings (reports to be submitted in 2027 covering 2026 data).
From 1/1/28Applicable non-EU companies. (report to be submitted in 2029 covering 2028 data).

If you need help in your preparations for CSRD, please don’t hesitate to contact us.  We have a wealth of experience with company reporting from a GHG, Sustainability and a CSR perspective as both consultants and independent assurers.  Let us help you build your reporting requirements into your core business processes and provide clarity for all your stakeholders.