Why is enhanced transparency important?
How do organisations comply with the CSRD?
Companies subject to the CSRD must report according to the European Sustainability Reporting Standards (ESRS). These standards were developed by the European Financial Reporting Advisory Group (EFRAG). The first set of ESRS was published in the Official Journal on 22 December 2023.
Double Materiality: A Key Requirement
A key development of the CSRD was the introduction of the mandatory requirement for organisations to conduct a "double materiality" assessment, as outlined in ‘ESRS 1 – General Requirements’.
This process enables the identification of sustainability matters of the greatest significance for the organisation and stakeholders, from both an impact and financial perspective. Double materiality considers that both financial and non-financial factors, such as environmental, social, and governance (ESG) considerations, are important and interconnected when assessing an organisation's risks and opportunities. The double materiality assessment process involves assessing the organisation's ESG-related impacts (from an inside-out perspective), while also considering how sustainability issues can financially affect the organisation (outside-in perspective).
Once an organisation has identified its material ESG topics, they are required to follow the disclosure requirements within the relevant ESRS documents.
What are key reporting considerations for organisations?
The CSRD encourages robust foundations for sustainability reporting. This involves requiring organisations to set clear baselines and targets, and to regularly report on progress against these targets. This should compel organisations to take a long-term view of sustainability, integrating it into their core business strategy.
To ensure transparency and build trust, the CSRD mandates independent verification of an organisation’s reported sustainability data.
Conclusion
The CSRD represents a significant step toward a sustainable and transparent business landscape. By harmonising reporting practices and emphasising double materiality, it encourages companies to integrate environmental, social, and governance considerations into their decision-making processes. As the CSRD takes effect, companies have a unique opportunity to demonstrate their commitment to responsible business practices and contribute to a more resilient and equitable future.
CSRD Support at Arete Zero Carbon…
Is your business ready to tackle CSRD compliance?
Our CSRD Readiness Review can help you understand your reporting requirements and develop a clear path to meeting your reporting obligations.
Contact Arete Zero Carbon to discuss your needs and how we can guide you through the CSRD process.
Linked in summary:
The Corporate Sustainability Reporting Directive (CSRD) is a new EU law that significantly expands the scope of mandatory sustainability reporting for companies operating within the EU and beyond. While it presents challenges, it also offers opportunities to enhance your company's reputation and build trust with stakeholders.
Read our blog post to find out more about what the CSRD is, who it applies to and when, and why it's important. It also covers the key requirements of the CSRD, including double materiality, and offers advice on how to comply.
Arete Zero Carbon can help you navigate the complexities of the CSRD and ensure your business is prepared for compliance. Contact us today to discuss your needs and how we can guide you through the CSRD process.
The Corporate Sustainability Reporting Directive (CSRD) is a new EU law demanding comprehensive sustainability reporting from companies operating within the EU and beyond. While challenging, it's an opportunity to boost your company's reputation and build stakeholder trust.
Our blog post delves into the CSRD's implications, including its requirements, timelines, and the crucial concept of double materiality.
Need help navigating the CSRD? Arete Zero Carbon offers expert guidance to ensure your business is fully compliant. Contact us today.