CSRD and Why it Matters

2024 is the first full year of reporting for the Corporate Social Responsibility Directive (CSRD) in the EU. Companies already in scope for Non-Financial Reporting Directive will have to report on environmental, social and governance issues alongside financial data in their annual report.

The emphasis on “machine readable” information is significant. The legislation takes sustainability reporting from voluntary story-telling to a standardised set of compulsory metrics. In its entirety, the CSRD is 12 standards, if you include the generic principles and generic requirements. There are 82 reporting requirements and 1,144 data points in total, which cover environmental reporting, social reporting and governance.

In short, it makes sustainability reporting as important as financials.

Roll out plan

Supply chain is a key component of the reporting, which means this has much wider reach than just the organisations reporting now. If your company has larger companies in as customers – or if you wish to have them in the future – you need to know the key points.

The number of organisations currently in scope is relatively small. According to an EU Commission report, only 11,000 have over 500 employees and are “public interest companies”, meaning listed companies, banks and insurance companies.

However, there is a rolling plan for where CSRD applies:

Large companies already subject to the NFRD have to publish their first CSRD-compliant annual report in 2025.

Large companies not subject to the NFRD will then need to comply from 2025, with their first annual CSRD-compliant annual report published in 2026.

Listed SMEs will also be in scope from 2026, with their first annual CSRD-compliant report published in 2027. An opt-out may be possible for listed SMEs, exempting them from reporting until 2028

What does this mean for reporting?

Sector specific and SME specific standards are as yet to be determined. For the moment, the technical guidance outlines the following categories:

5 Environment Categories

Climate Change

Pollution

Water and marine resources

Biodiversity and ecosystems

Resources, consumption and circular economy

4 Social Categories

Own workforce

Workforce in supply chain

Affected local societies

Consumers and end users

Governance Category

Business behaviour

To report on these, you need to carry out an impact assessment. If you don’t think this category applies to your company – or you are not ready to collect the required data points – you get to say so. It buys organisations time to get their systems set up.

The one category you cannot do this for is Climate Change, meaning you will need to have answers right away. Sub-topics within this are Climate change adaptation, Climate change mitigation and Energy. You need to develop policies, actions and targets now and in the future.

How can we help?

We at Techbuyer have made it our business to reduce energy usage, choose sustainable products and mitigate the risks of climate change in our organisation for many years. Our research into energy efficient options for enterprise IT that span configuration, bios settings and the effect of temperature have been published in a number of peer-reviewed academic journals.

We are committed to circular solutions, which reduce emissions in purchased goods and services. We have been an IEMA-accredited Carbon and Sustainability training centre for three years, delivering courses to hundreds of people along the way. We also love to chat, so please get in touch!

Techbuyer can help with climate change actions and reporting in the following ways: