by Michelle Armstrong, TYS Global VP of Value Solutions Consultant

Complying with the global standards set by the International Sustainability Standards Board (ISSB) involves aligning your business’s sustainability reporting with internationally recognized guidelines. The ISSB, operating under the IFRS Foundation, aims to provide a global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. Here’s a guide for your business to align with the ISSB standards: 

Understand the ISSB Standards and Their Objectives

• Overview of ISSB Standards: Familiarize yourself with the ISSB’s aim to standardize sustainability disclosures, focusing on providing relevant, reliable, and comparable information to investors. 
• Scope and Relevance: Understand how these standards are relevant to your business, particularly in communicating sustainability-related financial risks and opportunities to investors. 

Assess Current Sustainability Reporting Practices

• Gap Analysis: Evaluate your current sustainability reporting practices against the ISSB standards to identify gaps. 
• Stakeholder Engagement: Engage with key stakeholders, including investors, to understand their needs and expectations regarding sustainability information. 

Integrate Sustainability into Governance

• Governance Structure: Ensure your board and management are equipped to oversee sustainability issues in line with the ISSB standards. 
• Accountability and Responsibility: Assign clear roles and responsibilities for sustainability reporting and disclosure within your organization. 

Enhance Data Collection and Management

• Robust Data Systems: Develop or enhance systems to collect accurate and verifiable sustainability data. 
• Quality and Consistency: Focus on the quality, consistency, and reliability of the data collected for sustainability reporting. 

Align Reporting with ISSB Requirements

• Disclosure Practices: Adapt your sustainability reporting practices to align with the ISSB’s disclosure requirements, focusing on materiality, clarity, and completeness. 
• Continuous Improvement: Regularly review and update your reporting practices to align with evolving ISSB standards and best practices. 

Prepare for External Assurance

• Assurance Readiness: Prepare for external assurance of your sustainability disclosures to ensure they meet the ISSB standards. 
• Transparency and Credibility: Use external assurance to enhance the credibility and transparency of your sustainability reporting. 

Implement Effective Communication Strategies

• Investor Communication: Develop a strategy to effectively communicate your sustainability performance and risks to investors. 
• Public Reporting: Ensure public disclosures are clear, concise, and provide meaningful information to investors and other stakeholders. 

Monitor Developments and Participate in Dialogues

• Stay Informed: Keep abreast of developments and updates in ISSB standards and related regulatory changes. 
• Industry Collaboration: Participate in industry forums and dialogues to stay informed and influence the development of sustainability standards. 

Train and Educate Staff

• Internal Training: Provide training for staff involved in sustainability reporting to ensure understanding and compliance with ISSB standards. 
• Building Expertise: Develop internal expertise or seek external support for interpreting and applying the ISSB standards. 

Conclusion
Aligning with the ISSB standards is a strategic move towards globally consistent and comparable sustainability reporting. It not only aids in meeting investor demands but also enhances the overall credibility and transparency of your business’s sustainability efforts. As these standards evolve, staying proactive in adapting and improving your sustainability reporting practices will be key to maintaining alignment and demonstrating your commitment to sustainable business practices. 

by Michelle Armstrong, TYS Global VP of Value Solutions Consultant

Complying with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) involves a strategic approach to climate-related risk management and disclosure. The TCFD aims to improve and increase the reporting of climate-related financial information. Here’s a comprehensive guide for your business to align with the TCFD recommendations: 

Understand the TCFD Framework

• Framework Overview: Familiarize yourself with the TCFD’s four core areas: Governance, Strategy, Risk Management, and Metrics and Targets. 
• Applicability and Benefits: Understand how the TCFD recommendations apply to your organization and the benefits of enhanced climate-related financial disclosures, including better risk management and more informed strategic planning. 

Integrate Climate-Related Risks into Governance

• Board Oversight: Ensure your board of directors is informed about and oversees climate-related risks and opportunities. 
• Management’s Role: Establish management-level roles responsible for assessing and managing climate-related issues. 

Incorporate Climate Change into Organizational Strategy

• Impact Assessment: Assess the potential impact of climate-related risks and opportunities on your organization’s businesses, strategy, and financial planning. 
• Scenario Analysis: Conduct scenario analysis to understand the resilience of your organization’s strategy under different climate-related scenarios. 

Manage Climate-Related Risks

• Risk Identification and Assessment: Identify and assess climate-related risks to determine how they could affect your organization. 
• Risk Management Processes: Integrate climate-related risks into your existing risk management processes, ensuring an organization-wide approach to addressing these risks. 

Develop and Disclose Climate-Related Metrics and Targets

• Metrics Selection: Choose appropriate climate-related metrics that are relevant to your organization. 
• Setting Targets: Set and disclose targets your organization uses to manage climate-related risks and explain how these targets align with your strategy. 

Enhance Transparency and Disclosure

• Reporting: Prepare to disclose climate-related financial information in your organization’s annual financial filings or other public documents. 
• Continuous Improvement: Regularly update and refine your disclosures as practices and knowledge evolve. 

Engage with Stakeholders

• Stakeholder Communication: Communicate with stakeholders about your organization’s approach to managing climate-related risks and opportunities. 
• Feedback Incorporation: Use stakeholder feedback to enhance your climate-related financial disclosures. 

Monitor Regulatory Developments

• Regulatory Awareness: Stay informed about current and upcoming regulations related to climate disclosure in the jurisdictions where your organization operates. 
• Compliance Preparation: Prepare your organization for potential regulatory changes or requirements related to climate reporting. 

Provide Training and Build Capacity

• Internal Training: Ensure relevant employees and management are trained on the importance of climate-related risks and the TCFD recommendations. 
• Expertise Development: Develop in-house expertise or seek external support to understand and implement TCFD-aligned disclosures effectively. 

Conclusion
Aligning with the TCFD recommendations is essential for forward-thinking organizations committed to addressing climate change risks and opportunities. It facilitates compliance with emerging regulations and positions your business as a leader in sustainable practices, enhancing investor confidence and public trust. By taking proactive steps in governance, strategy, risk management, and transparent reporting, your organization can effectively navigate the challenges and opportunities posed by climate change. 

by Michelle Armstrong, TYS Global VP of Value Solutions Consultant

Complying with the EU Corporate Sustainability Reporting Directive (CSRD)involves several key steps and considerations for businesses. The CSRD significantly expands the sustainability reporting requirements for companies in the EU. Here’s a guide to what your business needs to do: 

 Understand the Scope and Applicability

• Determine Eligibility: The CSRD applies to all large companies, whether they are publicly listed or not. Specifically, it targets companies with more than 500 employees. 
• Timeline Awareness: Be aware of when the CSRD requirements will apply to your business. The directive is expected to be applied in stages starting from 2024 for reports published in 2025. 

 Develop Robust Data Collection Systems

• Data Collection and Management: Establish or enhance systems for collecting a wide range of ESG (Environmental, Social, and Governance) data. This includes environmental impact, social practices, and governance structures. 
• Technology Integration: Consider implementing technology solutions that can help in accurately collecting and managing sustainability data.

Align Reporting with CSRD Requirements

• Understand Reporting Criteria: Familiarize yourself with the specific reporting standards and formats that the CSRD mandates. This includes details on sustainability-related matters such as environmental protection, social responsibility, and treatment of employees. 
• External Standards and Frameworks: Align your reporting with recognized sustainability frameworks and standards that are consistent with CSRD requirements. 

Integrate Sustainability into Business Strategy

• Strategic Alignment: Ensure that your company’s strategy reflects a commitment to sustainability, as the CSRD aims for sustainability to be integrated into the business model. 
• Stakeholder Engagement: Engage with stakeholders, including employees, customers, and suppliers, to understand their perspectives and incorporate their feedback into your sustainability practices. 

Establish a Sustainability Governance Structure

• Governance Framework: Set up a governance framework for sustainability reporting, ensuring that there is oversight and accountability within the organization. 
• Training and Awareness: Train relevant staff on CSRD requirements and the importance of sustainability reporting. 

Prepare for Assurance and Verification

• Assurance Readiness: Prepare for external assurance of your sustainability reporting, as the CSRD requires assurance on the reported sustainability information. 
• Transparency and Accountability: Focus on the accuracy and transparency of your reporting to build trust with stakeholders and comply with the directive. 

Stay Informed and Adapt

• Regulatory Updates: Stay updated on any changes or updates to the CSRD and related regulations. 
• Continuous Improvement: Regularly review and update your sustainability practices and reporting to ensure ongoing compliance and improvement. 

Communicate and Disclose

• Effective Communication: Develop a communication plan to effectively disclose sustainability information both internally and externally. 
• Report Preparation: Prepare your sustainability reports in line with CSRD guidelines and ensure they are accessible to stakeholders. 

Conclusion
Compliance with the CSRD is not just a regulatory requirement; it’s an opportunity to embed sustainability into the core of your business operations. By taking these steps, businesses can not only comply with the directive but also demonstrate their commitment to sustainable development and corporate responsibility. 

by Michelle Armstrong, TYS Global VP of Value Solutions Consultant

Corporate Sustainability Due Diligence Directive (CSDDD) requires a comprehensive approach from businesses. The CSDDD aims to ensure that companies operating in the EU market address and mitigate adverse impacts on human rights and the environment within their operations and supply chains. Here’s a guide on what your business needs to do: 

Understand the Directive and Its Scope

• Determine Applicability: The CSDDD applies to large companies operating in the EU market. This includes EU companies with significant turnover and a certain number of employees, as well as non-EU companies with substantial business in the EU. 
• Scope of Operations: Understand that the directive covers your operations, your subsidiaries, and your supply chain, including indirect business relationships.

Conduct Thorough Due Diligence

• Risk Assessment: Carry out a thorough risk assessment to identify actual and potential adverse impacts on human rights and the environment in your operations and supply chains. 
• Action Plan: Develop and implement an action plan to address, prevent, and mitigate identified risks. 

Engage with Affected Stakeholders

• Stakeholder Engagement: Actively engage with potentially affected groups, including workers, local communities, and other relevant stakeholders, to understand their concerns and perspectives. 
• Feedback Mechanisms: Establish and maintain a system for receiving and addressing feedback or complaints from affected stakeholders. 

Implement Effective Governance Structures

• Responsibility and Oversight: Assign responsibility for due diligence at a high governance level within your organization. 
• Training and Awareness: Ensure employees and management are trained and aware of the due diligence requirements. 

Ensure Transparency and Reporting

• Public Reporting: Prepare and publicly disclose an annual report on your due diligence policies, processes, findings, and actions taken. 
• Transparent Communication: Be transparent about the challenges and limitations faced in addressing adverse impacts. 

Monitor, Evaluate, and Update Due Diligence Practices

• Continuous Monitoring: Regularly monitor the effectiveness of your due diligence measures. 
• Regular Updates: Update your due diligence processes as needed based on monitoring results and evolving risks. 

Prepare for Legal Compliance and Liability

• Legal Compliance: Understand and comply with the legal obligations under the CSDDD, including civil liability provisions. 
• Documenting Compliance: Keep thorough records of your due diligence efforts to demonstrate compliance. 

Establish End-to-End Supply Chain Management

• Supply Chain Collaboration: Work collaboratively with suppliers and business partners to ensure they understand and comply with the CSDDD requirements. 
• Contractual Clauses: Include appropriate clauses in contracts with suppliers and business partners to ensure compliance with due diligence obligations. 

Develop a Responsive Strategy for Identified Risks

• Mitigation and Remediation: Develop strategies to mitigate any adverse impacts and provide for remediation where harm has occurred. 
• Ending Relationships: Be prepared to end business relationships if mitigation of adverse impacts is not possible. 

Conclusion
Compliance with the CSDDD is a crucial step towards responsible and sustainable business practices. By integrating due diligence into your business operations and addressing potential adverse impacts on human rights and the environment, your company not only adheres to regulatory requirements but also contributes positively to societal and environmental well-being.