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.
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.