Knowledge

The complete overview of the CSRD reporting obligation

 

The CSRD (Corporate Sustainability Reporting Directive) introduces a comprehensive set of reporting obligations for companies, aimed at improving transparency and accountability with regard to sustainability and ESG (Environmental, Social, and Governance) aspects.

 

Overview of the main reporting obligations covered by the CSRD:

 

1. ESG themes and content requirements

 

Milieu (Environmental)

• Climate change: Companies must report on the impact of their operations on climate change, including greenhouse gas emissions, energy management, and adaptation strategies.

• Biodiversity and Ecosystems: Information on the impact of business activities on biodiversity, land use, deforestation, and natural resources.

• Water and waste management: Reporting on water consumption, waste management, and the impact on water resources and waste disposal practices.

• Circularity and resources: Companies must also provide information on their use of raw materials and their efforts to promote a circular economy.

 

Social aspects (Social)

• Human rights: Information about how the company respects human rights, including due diligence processes, risk assessments, and measures to prevent violations.

• Labour rights and working conditions: Reporting on working conditions, equal opportunities, diversity and inclusion, health and safety in the workplace, and relations with employees.

• Community involvement: Impact of business activities on local communities, including socio-economic impacts and community projects.

• Consumer Rights: Information about product safety, privacy protection, and ethical business practices with respect to customers.

 

Governance (Governance)

• Governance structure: Details about the company's governance structures, including the board's role in sustainability and ESG.

• Integrity and ethics: Information on anti-corruption and anti-money laundering measures, codes of conduct, and compliance programs.

• Risk management: Description of the processes for identifying and managing ESG-related risks, including climate-related and human rights risks.

• Remuneration policy: How the company's remuneration policy is linked to sustainability performance.

 

2. Forward-Looking information

• Strategy and objectives: Companies should describe their sustainability goals and strategies, including long-term plans to manage ESG risks and opportunities.

• Impact on business strategy: How sustainability and ESG factors are integrated into the broader business strategy and decision-making.

• Scenario analysis: Use of scenarios, e.g. in the context of climate risks, to assess future business challenges.

 

3. Value chain and suppliers

• Value chain impact: Companies must report on the ESG impact of their entire value chain, including suppliers and customers.

• Supplier assessment: How the company integrates ESG criteria into the supplier selection process and assessment.

 

4. Equipment analysis

• Determination of material topics: Companies must explain how they determine which ESG topics are material to their operations, taking into account the impact on stakeholders and wider society.

 

5. Transparency and accessibility

• Standardized reporting: Companies must submit their ESG reports according to the European Sustainability Reporting Standards (ESRS) set by the EU.

• Digital submission: Reports must be submitted in a standardized digital format, which facilitates accessibility for stakeholders.

 

6. External verification

• Auditing: ESG reporting must be audited by a third-party auditor or certifier, similar to the audit of financial data. This increases the reliability and credibility of the information reported.

 

7. Double materiality

• Double materiality: Companies must report both the impact of external ESG factors on their financial performance (outside in) and the impact of their operations on society and the environment (inside out).

 

8. Comparability and consistency

• Benchmarking: Reporting should be comparable and consistent so that stakeholders can compare the ESG performance of different companies within the same industry.

 

9. Sustainability-related risks and opportunities

• Risks: Identification of ESG-related risks, such as climate change or human rights issues, that could affect the company's performance or reputation.

• Opportunities: Description of how ESG initiatives create new business opportunities or increase value for stakeholders.

 

10. Stakeholder engagement

• Stakeholder engagement: Companies should explain how they involve stakeholders in their sustainability strategy and ESG reporting, including dialogues with employees, customers, and local communities.

 

11. Taking sustainability goals into account

• EU Taxonomy: Companies must declare how their activities contribute to the EU's sustainability goals, as set out in the EU Taxonomy for Sustainable Activities.

 

This comprehensive framework imposed by the CSRD requires companies not only to provide more detailed and broad information about their ESG performance, but also to report this information according to established standards and processes. As a result, sustainability becomes an integral part of business strategy and communication, ultimately contributing to greater transparency and accountability in business.