There are a vast number of resources out there on the Corporate Sustainability Reporting Directive (CSRD), what it means for your business, when you have to report, how to get started etc, and it all may seem very over whelming!

In this blog we are going to make things simple and breakdown the actual reporting requirements!

What is the CSRD?

The CSRD was developed to enhance and standardise the sustainability reporting landscape across Europe. Effective from 2024, it expands the scope of reporting requirements, making them more rigorous and comprehensive. The directive applies to all large companies and all companies listed on regulated markets, promoting greater transparency among significant market players.

Introduction to the ESRS

The ESRS, developed by the European Financial Reporting Advisory Group (EFRAG), provide the detailed guidelines and standards that companies must follow to comply with the CSRD. These standards are designed to ensure consistency, comparability, and reliability of sustainability information.

Key Reporting Points of ESRS

The ESRS are divided into several key areas, each focusing on different aspects of sustainability. These include general requirements, environmental standards, social standards, and governance standards. Each area is further divided into specific reporting points that detail the required disclosures for companies.

Cross Cutting Standards

1. General Requirements (ESRS 1)

• Materiality Assessment: Companies must conduct a materiality assessment to identify sustainability matters that are material from both an impact perspective and a financial perspective. This involves evaluating the actual and potential impacts on people and the environment.
• Reporting Boundaries: The reporting boundaries should include the company’s own operations, its upstream and downstream value chains, and entities in which the company holds significant influence.
• Double Materiality: Companies are required to adopt a double materiality approach, considering both the financial impact of sustainability issues on the company and the impact of the company’s activities on society and the environment.

2. ESRS 2: General Disclosures

• Governance: Details on the governance structure and how sustainability issues are integrated into it.
• Strategy: Information on the company’s strategy related to sustainability, including risks and opportunities.
• Impact, Risk, and Opportunity Management: How the company identifies, assesses, and manages sustainability-related impacts, risks, and opportunities.
• Metrics and Targets: Key performance indicators and targets related to sustainability.

Topical Standards

Environmental Standards (ESRS E)

ESRS E1: Climate Change:

• GHG Emissions: Reporting on Scope 1, Scope 2, and Scope 3 GHG emissions, including both absolute figures and intensity metrics.
• Climate Targets: Disclosure of specific climate-related targets and progress towards these targets.
• Energy Consumption: Information on energy consumption and energy mix, including renewable and non-renewable sources.

ESRS E2: Pollution:

• Air, Water, and Soil Emissions: Metrics on emissions of pollutants into air, water, and soil, including greenhouse gases, air pollutants, water pollutants, soil contaminants, and substances of concern.

ESRS E3: Water and Marine Resources:

• Water Usage: Data on total water withdrawal, water consumption, and efforts to manage water resources sustainably.

ESRS E4: Biodiversity and Ecosystems:

• Impact on Biodiversity: Information on the impact of company operations on biodiversity and ecosystems, including mitigation measures.

ESRS E5: Circular Economy:

• Waste Management: Reporting on waste generation, recycling rates, and initiatives to promote circular economy practices.

Social Standards (ESRS S)

ESRS S1: Own Workforce:

• Workforce Composition: Breakdown of workforce by gender, age, employment type (permanent, temporary), and other relevant demographics.
• Health and Safety: Metrics on occupational health and safety, including incident rates and preventive measures.
• Training and Development: Information on training programs and employee development initiatives.

ESRS S2: Workers in the Value Chain:

• Labour Practices: Reporting on labour conditions and practices in the supply chain, including adherence to labour standards and fair wages.

ESRS S3: Affected Communities:

• Community Engagement: Data on engagement with local communities, impact assessments, and measures to address community concerns.

ESRS S4: Consumers and End-users:

• Product Safety and Responsibility: Information on product safety, customer satisfaction, and responsible marketing practices.

Governance Standards (ESRS G)

ESRS G1: Governance Structure and Processes:

• Board Diversity: Data on the composition of the board of directors, including diversity metrics.
• Risk Management: Information on the company’s risk management framework, particularly related to ESG risks.

ESRS G2: Business Conduct:

• · Ethics and Compliance: Reporting on ethics policies, anti-corruption measures, and compliance with legal and regulatory requirements.

Phase-In Provisions and Flexibility

While many data points are mandatory, the ESRS also includes phase-in provisions for certain disclosures, especially for companies with fewer than 750 employees. These provisions allow for a gradual implementation of some data points, providing companies with additional time to adapt to the new reporting requirements.

Voluntary Data Points

In addition to mandatory data points, the ESRS outlines several voluntary disclosures. These allow companies to provide additional context and information beyond the mandatory requirements, enhancing the overall transparency and comprehensiveness of their sustainability reporting.

Where can I find more information?

If you’re ready to delve a bit different into CSRD, we have a free e-book you can download here.

How can SustainIQ help with CSRD?

Implementing an ESG reporting software such as SustainIQ, can play a crucial role in helping companies report and comply with CSRD.

With 200+ different reporting categories and having all your data on one centralised platform, it will allow you to track relevant points in line with CSRD.

Why not request a demo to see how it could work for you?