LCA's to help comply with CSRD?
How to react to CSRD Environmental reporting requirements??
The EU Council approved the new EU Corporate Sustainability Reporting Directive (CSRD) on Monday November 28th. It is part of the European Green Deal and the Sustainable Finance Agenda.
The regulation will apply starting in 2024:
-1 January 2024 – for large public-interest companies with over 500 employees (NFRD)
-1 January 2025 – for companies that meet at least 2 out of three criteria(report in 2026)
-1 January 2026 – for listed small and medium-sized enterprises (SMEs) (report in 2027).
The number of companies required to provide sustainability disclosures will increase from around 12,000 currently to over 50,000 and introduce more detailed reporting requirements on company impacts on the environment, human rights and social standards and sustainability-related risk.
The sustainability reports will also need to be independently audited.
The CSRD will require disclosure under a common framework of European Sustainability Reporting Standards (ESRS)
Five of those standards are related to disclosure on environmental impacts: Climate Change, Pollution, Water and marine resources, Biodiversity and ecosystems, and Circular economy. It is great to see that the focus is no longer only on Climate change, although that is of course a critical and urgent topic.?
Here are a few key topics from each of those, based on a very quick initial glance
ESRS E1: Climate Change
Scope 1, 2 and 3
ESRS E2: Pollution
Pollution of Air, soil and water.?
Substances of concern, substances of very high concern
ESRS E3: Water and marine resources
Water and marine resources,?
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Water consumption
ESRS E4: Biodiversity and ecosystems: It is hard to find only a few key words. These topics are listed under materiality assessment:
Direct impact drivers on biodiversity loss: Climate change, land-use change, freshwater-use change and sea-use change, direct exploitation, invasive alien species, pollution
impacts on the state of species
impacts on the extent and condition of ecosystems
ESRS E5: Resource use and circular economy
Resource use and circular economy,?
resource inflow, resource outflow
waste.
In all those five standards, the scope extends beyond the own operations of companies. “Own operations and value chain” and “upstream and downstream value chain” are mentioned multiple times in each of the standards, environmental footprint methods and lifecycle environmental performance are mentioned and for GHG, sopes 1, 2 and 3 are all included. So clearly companies need to look beyond their own operations.
Well, that is a lot to report.
What can a business start doing right now, to be ready in 2024?
A good way to gather a lot of the needed information is to conduct Environmental Life Cycle Assessments for your products, processes, services or your organization. It is still not a walk in the park but with competent people - such as those you can hire through the?Environmental Impacts Academy’s internship program - and with modern software like Earthster , it is probably a smaller challenge than you might think initially.?
LCA’s will not automatically make you compliant with those five ESRS standards but they will take you a lot closer than you would be without LCA’s.
#esrs #efrag #csrd #lca #sustainabilityreporting #lca #lifecycleasessment #betterlca #esg #esgreporting #meaningfulwork #environmental #sustainability
First set of draft ESRS’, makes a nice weekend read: https://www.efrag.org/lab6#subtitle3
Council of the EU Press release 28 November 2022 10:30: https://www.consilium.europa.eu/en/press/press-releases/2022/11/28/council-gives-final-green-light-to-corporate-sustainability-reporting-directive/
Environmental Impacts Academy can help you get started by building your capability to do Environmental LCA's. Contact us or book a meeting at https://www.environmentalacademy.org/contact