The clock is ticking

5 steps to prepare you for CSRD

On 21 April 2021, the European Commission adopted a Corporate Sustainability Reporting Directive (CSRD) proposal that radically improves the existing reporting requirements of the EU’s Non-Financial Reporting Directive (NFRD). This EU legislative proposal will legally oblige companies to report in compliance with European sustainability reporting standards. An attempt by the EU for greater transparency, making companies resilient and perform better, both in financial and non-financial terms. Considering the scope and reach of this legislation, it is likely that your organization will be significantly impacted. In this blog, we provide you with 5 steps in which we can support you and help you prepare well for CSRD.

The CSRD will extend the scope of sustainability reporting requirements to all large companies without the previous 500-employee threshold of the NFRD. This change will result in all large companies being held publicly accountable for their impact on people and the environment.

The scope includes all EU companies that meet at least 2 out of 3 criteria:

  • More than 250 employees
  • And/or a turnover that exceeds 40 million
  • And/or a balance sheet that exceeds a total of 20 million
Authors
Helen Miller

Helen Miller

Consultant, Sustainalize

Marit Luijckx

Former colleague, Sustainalize

Modified on: 31 August 2022

Published on: 17 December 2021

Share this article
Share on facebook
Share on twitter
Share on linkedin
Share on email

Timeline

Source: EFRAG

All in all, there is a great chance that in 2024 your company will need to report in accordance with these standards, while we only expect the final draft to become available during the second half of 2023. This means quite a big task lies ahead to meet the requirements in only a short amount of time. But not to worry. We identified 5 steps of how you can prepare your reporting already.

  1. Perform a gap analysis: if you report already we can assist you in identifying gaps against CSRD requirements we know to date and thereby help you bring focus.

  2. Include risk management in the process of identifying material topics. To establish a comprehensive strategy and ambitions, it is necessary to understand both the impact on society and the business value of the materiality assessment results. Therefore, a company’s management will be required to certify that an adequate risk and control framework safeguarding and governing reported ESG information has been established.

  3. Connect targets to material topics. To track progress on material topics, meaningful KPIs and targets should be defined. In addition, the data collection process should include clearly defined roles and responsibilities and controls. This will serve reporting purposes and enable companies to contribute to a sustainable economy in a managed way while simultaneously securing the company’s own sustainability.
  1. Start the conversation with auditors to get ready for assurance on your sustainability information and to develop a route to be ready in 2023.

  2. Start talking about sustainability governance, responsibilities, and resources.

Companies will be required to design and maintain a detailed and extensively controlled ESG information database. For most, this means a drastic change in the governance of ESG reporting and will require knowledgeable resources throughout your entire organization. From your finance team to risk management and operations.

While the clock is ticking, we can assist you in preparing for the CSRD. Allowing you to implement reasonable and well-developed structures. And stay in control.

Authors
Helen Miller

Helen Miller

Consultant, Sustainalize

Marit Luijckx

Former colleague, Sustainalize

Published on: 17 December 2021

Share this article
Share on facebook
Share on twitter
Share on linkedin
Share on email

Other news in this category

Met OV

Phasellus dignissim nulla tincidunt ultrices interdum. Nulla a enim ullamcorper, consectetur ligula sit amet, rutrum ante. Praesent cursus viverra urna ut sagittis. Sed nunc felis, hendrerit sit amet odio a, mattis laoreet mi. Quisque diam turpis, convallis at ultrices eu, vehicula a urna. Suspendisse potenti.

Met OV

Phasellus dignissim nulla tincidunt ultrices interdum. Nulla a enim ullamcorper, consectetur ligula sit amet, rutrum ante. Praesent cursus viverra urna ut sagittis. Sed nunc felis, hendrerit sit amet odio a, mattis laoreet mi. Quisque diam turpis, convallis at ultrices eu, vehicula a urna. Suspendisse potenti.

Met OV

Phasellus dignissim nulla tincidunt ultrices interdum. Nulla a enim ullamcorper, consectetur ligula sit amet, rutrum ante. Praesent cursus viverra urna ut sagittis. Sed nunc felis, hendrerit sit amet odio a, mattis laoreet mi. Quisque diam turpis, convallis at ultrices eu, vehicula a urna. Suspendisse potenti.