CSRD: What is it & Why does it Matter?

The CSRD will affect Medium and Large Businesses that have European Operations

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It will become vital that companies prepare themselves by building out audit-ready reporting infrastructure & setting clear sustainability goals.

The CSRD increases the breadth of sustainability reporting as it incorporates pollution, water, and biodiversity. It also increases the scope of the companies that are subject to the directive, which include all companies that have 2 or more of the following, 250+ employees, €40m+ annual revenue, €20m+ balance sheet.

Double Materiality is when you understand which elements of ESG will benefit your business Environmental & Economic Bottom Line

A key element of the CSRD is the inclusion of double materiality, which will involve recognition of how company operations affect people and the environment, and also how sustainability related developments will impact the organisation. Company stakeholders will evaluate risks and opportunities across the topics covered by CSRD and include some metrics based measurements to clarify understanding of materiality.

Regardless of the findings of the materiality assessments, all companies in scope will have to baseline their climate reporting, including full scope 1-3 emissions, alongside a climate risk assessment and any policies related to climate change mitigation and adaption. Further reporting will depending on material risk, and could include other standards, water, pollution and biodiversity metrics to be included within an organisations mandatory disclosures.