As 2024 approaches quickly, companies in Europe and around the globe are formulating plans to comply with the Corporate Sustainability Reporting Directive (CSRD) requirements. Although reports for many of the companies regulated will not be due till early 2025, they will be based on 2024 data. Ensuring compliance begins with having an understanding of what is required. ScriptString is here to aid you in that first step, and every step along the way. Let’s dig into the CSRD and how ScriptString can help.
Who Has to Report?
Under the CSRD, many companies will soon need to report to the European Sustainability Reporting Standards (ESRS). These new standards have been thought of as a more rigorous version of the existing Non-Financial Reporting Directive (NFRD) and companies already reporting to NFRD and others will need to comply. While this mainly includes European companies, international organizations may need to comply as well. Those who have obligations include:
- Large EU companies
- Most companies with listed securities on EU-regulated markets
- Non-EU parent companies with a combined group turnover of more than EUR 150 million
The 2025 deadline for first reports does not apply to everyone. With the phased-in approach, more and more companies will be required to report each year. The “ESRS Get Ready Guide” from KPMG is a great tool to refer to to understand your specific requirements and timeline for reporting! In total, “CSRD is expected to increase the number of firms subject to EU sustainability reporting requirements to approximately 49,000.”
CSRD – Meeting the Requirements
The first step to meeting the requirements is understanding the requirements.
The CSRD requires companies to report to the recently published ESRS. The standards cover a variety of areas and topics including:
Reporting Areas:
- Governance
- Strategy
- Impact, risk, and opportunity management
- Metrics and targets
Topics:
- Environmental – climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy
- Social – own workforce, workers in the value chain, affected communities, consumers, and end users
- Governance – business conduct
While the standards do cover a lot, companies must first conduct a double materiality assessment to understand exactly what standards they need to report to. ESRS 2 General Disclosures is the only mandatory standard, the rest are subject to the results of what is material to your company.
Reasoning for certain disclosure being deemed not material may need explanation in reporting and sustainability-related matters deemed material but not covered in the standards need to be disclosed as company-specific disclosures.
Reporting is meant to be published in management reports in a specific “sustainability statement”.
Preparing for CSRD
Whether you need to report starting in 2025 or will be phased in later it is important to prepare as early as possible. A double materiality assessment alone can take time to conduct to set yourself up to be able to track metrics and compile your first report.
Assessing your company, collecting data, and compiling reports can be done in spreadsheets. There are also phase in reliefs including including those to information in the value chain. Still, doing such this way can be extremely time consuming and costly, as well as prone to error. Due to the complexity of CSRD reporting, finding a technology partner to aid you can be extremely beneficial.
Automate your reporting end-to-end and say goodbye to spreadsheets. ScriptString offers a range of services to support your journey towards sustainability, including fractional sustainability services. With seamless data integrations, robust verification checks, the constant guidance of an AI assistant, and much more, we are committed to being with you at every step and beyond.
Request a personalized demo today to understand how ScriptString can aid you in preparing for CSRD reporting!
