Navigating the CSRD: Your Essential Quick Guide

In an era where sustainability is not just a choice but a necessity, the Corporate Sustainability Reporting Directive (CSRD) emerges as a key player. This quick guide aims to provide you a high-level overview of the CSRD for your business. It outlines who needs to report, suggested steps for implementation, and some practical advice to ensure your road to compliance is not a bumpy one.

Understanding the CSRD: A New Era of Sustainability Reporting

The CSRD (EU) 2022/2464 is a groundbreaking legislation from the European Union, enhancing the scope and depth of corporate sustainability reporting. Building on the foundations of the Non-Financial Reporting Directive (NFRD), the CSRD aims to elevate the standards of transparency in environmental and social matters, making it pivotal for stakeholders to assess a company's sustainability performance.

Who Falls Under the CSRD Umbrella?

The CSRD impacts companies within the European Union, but also extends its reach beyond large EU entities to encompass a variety of companies:

• EU-Based Companies Companies meeting two of the following three criteria have to comply with the CSRD: 250 or more employees, €50 million in net turnover, and €25 million in assets.
• Non-EU Entities Companies with significant EU operations, specifically those with an EU net turnover exceeding €150 million, including businesses with EU subsidiaries or branches generating substantial turnover.

Identifying if your business falls within these parameters is a key first step towards CSRD compliance.

Kickstarting Your CSRD Strategy

Starting with CSRD can seem daunting, but breaking it down into manageable steps can help:

• Conduct Double Materiality: This dual lens helps you understand and report both the impact of your business on sustainability matters and the influence of sustainability matters on your business. Identify the ESG topics that matters most for your business based on ESRS specifications and sector, then rank topics in IROS (Impacts, Risks & Opportunities) and evaluate their financial & impact materiality. Finally, report your list of material topics, obtain your own materiality matrix, and comply with CSRD/ESRS requirements.
• Develop a Reporting Framework: Align your processes with the European Sustainability Reporting Standards (ESRS).
• Involve and Inform Stakeholders: Engage different departments and value chain partners in the reporting process.
• Create a Compliance Roadmap: Develop a step-by-step plan considering the phased CSRD implementation from 2024 to 2028.

Actionable Tips for Today

Here’s what you can do right now:

• Educate Your Team: Ensure that your staff understand the CSRD and its impact on your business that it’s about to have on your operations.
• Audit Current Sustainability Efforts: Review how your current sustainability practices align with CSRD expectations.
• Stay Informed: Keep up-to-date with ongoing developments in CSRD regulations and standards.
• Plan for Complex Data Management: Determine the data you need for comprehensive reporting and select a future-oriented platform that has the correct compliance features already in place, while being able to efficiently gather supplier data and report to other entities requesting your data.

Takeaway

Achieving compliance with the CSRD is complex, but by developing your strategy now it will ensure you are prepared for the wave and avoid drowning. Remember that embracing the CSRD is not just about regulatory compliance; it's also an opportunity to demonstrate your commitment to a sustainable future.

By joining leading companies that are starting their preparations now, you can navigate this new directive with confidence—enhancing your transparency and accountability in sustainability. Let’s create a future where corporate sustainability is not just reported, but integrated into every facet of our operations to ensure efficient compliance and a shared understanding of the benefits it can bring.

For more detailed advice on CSRD, what is material to your business, and how to begin your journey to ensure compliance get in touch with us today