CSRD: Why you need to know about it
The European Union (EU) has adopted a new law that requires large companies and listed SMEs to report on their environmental, social, and governance (ESG) performance. The Corporate Sustainability Reporting Directive (CSRD) will enter into force on January 1, 2023. It is a major step forward in the EU's efforts to promote sustainable business practices.
The reporting requirements will help increase transparency and accountability, allowing investors, consumers, and other stakeholders to make informed decisions about companies. It is also expected to drive innovation and investment in sustainable business practices.
Here are some of the key requirements of the CSRD:
- Scope:
It applies to large companies and listed SMEs. Large companies are those with more than 250 employees and a turnover of more than €40 million or a balance sheet total of more than €20 million. Listed SMEs are listed on a regulated market with more than 250 employees and a turnover of more than €40 million or a balance sheet total of more than €20 million.
- Reporting requirements:
It requires companies to report on a wide range of ESG issues, including greenhouse gas emissions, human rights, and social impacts. The reporting requirements are more extensive than those under the current Non-Financial Reporting Directive (NFRD).
- Auditing:
It requires companies to have their ESG reports audited by an independent auditor. The audit must be conducted in accordance with the International Standard on Assurance Engagements (ISAE) 3000.
- Sanctions:
Companies that fail to comply with the CSRD may be subject to fines of up to €10 million or 5% of their global turnover.
The CSRD is a significant piece of legislation that will have a major impact on businesses in the EU. The reporting requirements will be a challenge for many companies, but they are also an opportunity to demonstrate their commitment to sustainability. The CSRD is a positive step towards a more sustainable future.
If you are working in impact startups, ESG departments, or HR departments of corporates, you can play a role in helping companies comply with the CSRD:
- Educate your colleagues about the CSRD:
Many people are not familiar with the CSRD. You can help to educate your colleagues about the CSRD and its requirements.
- Support companies in developing their ESG reporting:
Many companies are struggling to develop their ESG reporting. You can offer your support to companies in developing their ESG reporting.
- Hold companies accountable for their ESG performance:
The CSRD requires companies to report on their ESG performance. You can hold companies accountable for their ESG performance by asking them questions about their ESG performance and by making your concerns known to company management.
- Enroll in the Global Networker Course from 17ACADEMY:
This course will teach you how to build cross-sectoral collaborations and networks to accelerate the process of transformation toward a sustainable economy. By integrating this course into your CSRD report, you can demonstrate your company's commitment to sustainability and show how you are working to positively impact the world.
The CSRD is a new law, and it is still unclear how it will be implemented. However, it is clear that the CSRD will have a major impact on businesses in the EU. As someone working in impact startups, ESG departments, or HR departments of corporates, you can play a role in helping companies comply with the CSRD and in promoting sustainable business practices. positively impact the world.
