The Corporate Sustainability Reporting Directive (CSRD) forms a pivotal part of European legislation aimed at fostering sustainable and responsible business practices. CSRD expands the scope and enhances the quality of sustainability information that companies must provide. Its key requirements are designed to ensure greater transparency concerning the environmental, social, and governance (ESG) aspects of corporate operations.
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Friday
March 22, 2024, from 10:00AM to 12:00AM
CSRD applies to a broader range of companies than the previously required non-financial reporting under the NFRD directive. The criteria defining which companies must report according to CSRD include:
CSRD will be implemented gradually, starting with:
Companies must provide more detailed information on how their operations impact the environment and society, and how environmental and social factors affect their business. This includes information on climate change, biodiversity conservation, resource use, pollution, equity, employment, human rights, and anti-corruption efforts.
CSRD requires that company reports follow the sustainability reporting standards developed by the European Financial Reporting Advisory Group (EFRAG). These standards will ensure consistency, comparability, and reliability of sustainability information.
EFRAG introduces 12 ESRS (European Sustainability Reporting Standards) of which climate change, own workforce, and business conduct (Business Conduct) are mandatory for all. Compliance with the rest depends on whether the company impacts the area addressed by the standard. For example, if it causes air, water, or soil pollution, it must also report under ESRS Pollution, and so on.
CSRD introduces the concept of "double materiality," meaning companies must report on the impact of their business on society and the environment, and how environmental and social aspects in the ecosystem affect their business. This reflects a comprehensive approach to assessing a company's sustainability impact.
Companies must demonstrate how their strategy and business model consider sustainable aspects and objectives, and how this approach contributes to sustainable development.
Companies will need to ensure their sustainability reports are reviewed and certified by external auditors. This is intended to ensure the credibility and reliability of reported information.
Reports must be digitally accessible and structured so they can be easily read and analysed using automated tools. This will improve the accessibility and usability of reported information for all stakeholders.
CSRD requirements represent a significant step forward in efforts to ensure that companies incorporate sustainable practices into their business strategies and report on them. This not only increases corporate transparency and accountability but also aids in shaping a more sustainable future for all.
General Standards:The company thoroughly understands its operations, including the inputs (raw materials, energy, semi-finished products), emissions, pollution, and waste generated in the production of their products or provision of services. Once the company identifies these aspects, the algorithm determines which ESRS standards the company must adhere to.
The Risk Module includes functionality for assessing double materiality (significance) and, for all relevant environmental and social aspects, allows for the evaluation of risks, identification of necessary actions/improvements to enhance conditions, and setting of objectives.
In the CSRD DNA EQMS module, the company manages compliance assessment with disclosure requirements and report preparation. The report is automatically compiled from individual reports for each requirement, allowing for subsequent revisions.