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.