CSRD (Corporate Sustainability Reporting Directive), a light version?
CSRD for companies in the EU, an opportunity or burden?
The Corporate Sustainability Reporting Directive (CSRD) of the European Union requires all large companies and listed small companies (SMEs) to disclose information on their risks and opportunities in the field of ESG (Environmental, Social, and Governance). This helps investors, civil society organizations, consumers and other stakeholders to evaluate the sustainability performance of companies, as part of the European Green Deal.
The Green Deal aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases (GHG) by 2050. It also aims to protect, conserve and enhance the Union’s natural capital, and protect the health and well-being of Union citizens from environment-related risks and impacts. It aims to decouple economic growth from resource use. Its targets, however, were weakened by the “Omnibus”, as a result of lobbyists of the steel and chemical industry.
The required details of the CSRD are described in the separate European Sustainability Reporting Standards (ESRS).
On the Environment:
– Climate Change (ESRS E1)
– Pollutants (ESRS E2)
– Water and marine resources (ESRS E3)
– Biodiversity and ecosystems (ESRS E4)
– Resource use and circular economy (ESRS E5)
On Social issues:
– Own workforce (ESRS S1)
– Workers in the value chain (ESRS S2)
– Affected communities (ESRS S3)
– Consumers and end-users (ESRS S4)
On Governance:
– Business conducts (ESRS G1)
For an overview, see: CSRD essentials
The ESRS documents will be rewritten to make the system less complex with less datapoints.
Content
There is a new (delayed) timeline for introduction of the CSRD, see the Omnibus packages, and timeline and other changes.
This revision is heavily criticized by environmentalists, but the reality is that the environment was not helped by the enormous detail of data (1400 datapoints!) in the original concept. Such an administrative burden does not support the introduction of innovative business models that are needed.
On the other hand: “what gets measured gets done”, so relevant data must be monitored. This and subsequent webpages give some guidance on a “CSRD light” that makes sense from business point of view.
