The new CSRD applies to a drastically larger scope of companies<\/strong> (50.000 companies more than NFRD\u2019s) across all sectors. Companies will have to publicly disclose detailed and transparent information on how sustainability issues:<\/span><\/p>\n <\/p>\n The CSRD applies to all <\/span>large companies<\/b> governed by or stock listed in the EU law or established in an EU member state. It also applies to global businesses that have operations\/ securities in Europe. Next to these criteria, companies have to meet at least two out of the following three requirements:<\/span><\/p>\n *<\/i><\/b>Go to question 10 for the CSRD & SMEs.\u00a0<\/span><\/i><\/p>\n Have to comply with the CSRD from the 1st of January 2024 onwards<\/a><\/span>.<\/strong> The CSRD measuring & reporting requirements are obligatory in the annual reports over the financial year 2024. This \u2018first\u2019 CSRD-compliant annual report will have to be published in 2025.\u00a0<\/span><\/p>\n Have to comply with the CSRD from the 1st of January 2025 onwards.<\/strong><\/a><\/span> The CSRD measuring & reporting requirements are obligatory in the annual reports over the financial year 2025. This \u2018first\u2019 CSRD-compliant annual report will have to be published in 2026.<\/p>\n Companies will have to report on additional information elaborated in the soon-to-be-released two sets of <\/span>CSRD Sustainability Reporting Standards<\/span><\/a><\/span>. The proposal for these standards has been released. Both sets of standards are required for the reporting year 2024 (report published in 2025) onwards.\u00a0<\/span><\/p>\n Will be adopted on the 30th of June 2023<\/strong><\/span>. It will include the guidelines on two main conceptual guidelines:<\/span><\/b><\/p>\n a. Double Materiality:<\/b><\/a><\/span> Identifying all potential negative and positive impacts on people & environment. Connected with a company\u2019s own operations and its <\/span>value chain.<\/b><\/p>\n b. Quality of information: <\/b>Required standards on<\/span> how you should ensure your sustainability information is of high quality (e.g truthful representation, comparability, verifiability, etc.). Also explaining the standards for the general reporting and important sub-topics (e.g climate change).<\/span><\/p>\n Will be adopted on the <\/strong><\/span>30th of June 2024<\/b>. This set will help companies to finetune their reporting and addresses:<\/span><\/p>\n a. The 4 remaining conceptual guidelines:<\/b><\/p>\n b. Requirements for your sustainability strategy & business model <\/b>and its <\/span>resilience towards sustainability-related<\/i>\u00a0risks and climate scenarios<\/i>. This includes aspects such as;\u00a0<\/span><\/p>\n The two sets of Sustainability Reporting Standards still need to be released. But the preliminary focus points (question 4) in the proposal give us an idea of the main <\/span>environmental impact results<\/span><\/i> required.<\/span><\/p>\n The CSRD proposal stated they will follow the <\/span>TCFD*<\/span><\/a><\/span> in particular for climate-related sustainability information (image 2). Additionally, embracing the NFRD. This means the CSRD requires Greenhouse Gas (GHG) Protocol Reporting for company emissions.\u00a0<\/span><\/p>\n Conclusion:<\/b> Your company will (very likely) have to measure and report its GHG data (scope 1, 2 & 3 emissions), compliant with the GHG Protocol.\u00a0<\/span><\/p>\n *Task Force on Climate-Related Financial Disclosures<\/span><\/a><\/span><\/p>\n The CSRD wants companies to disclose other environmental impact types than climate alone. In their standards proposal, the CSRD follows the EU Taxonomy for other environmental impact information required. These are called the 6 criteria from the EU Taxonomy:<\/span><\/p>\n Conclusion:<\/b> Measuring these impacts requires a full<\/strong> environmental footprint of your company (covering 15+ environmental impact categories). Here, both the EU Taxonomy and CSRD highly recommend the scientific footprinting method <\/span>Life Cycle Assessments (LCA)<\/span><\/a><\/span>.<\/span>\u00a0<\/span><\/p>\n The CSRD is here to stay.<\/strong> Companies have to report annually on how they operate and manage their social and environmental challenges. Additionally, the CSRD requires as much primary data<\/strong> as possible. Therefore, companies also need environmental data on the products they purchase (product LCAs) and feed this into their own measurements. All this reporting and data collection needs to be robust, transparent, and verifiable. Especially, as limited assurance (external audit) will be mandatory for the CSRD. Social challenges require a different approach, however, environmental data can be continuously measured and monitored.\u00a0<\/span><\/p>\n Conclusion:<\/b> To ensure your environmental footprint is accurate, credible, and constantly accessible.<\/strong> It is highly advised to have a robust <\/span>footprinting system<\/span> in place. Allowing you to stay in control of your own data, monitor improvements, and make annual footprint comparisons.<\/span><\/p>\n Manufacturing companies\/companies who produce large portfolios<\/strong>\u00a0use Ecochain<\/a><\/span> for their company environmental footprint calculations. Ecochain software provides 95% of the data these companies need to make a company footprint according to the GHG Protocol. It measures the full environmental footprint of manufacturing sites \u2013 and creates individual LCA for all your products at the same time. Providing a company overview as well as product details. <\/span><\/p>\n It does all the heavy lifting, leaving only a few details to be performed manually for a full GHG company footprint. But instead of solely focusing on carbon as many company footprint calculators \u2013 Ecochain shows you your full impact range according to LCA. In line with the CSRD\u2019s requirements.\u00a0<\/span><\/p>\n Also, many suppliers have to deliver environmental data to their buyers \u2013 due to the CSRD. They use Ecochain<\/a><\/span>\u00a0to create individual LCAs of their product, which buyers then feed into their own measurement systems. Read more about the role of suppliers in the CSRD here.<\/a><\/p>\n The first set of reporting standards highly focuses on double materiality and the quality of your sustainability information. NFRD-compliant companies already have to be compliant with the CSRD from the 1st of January 2024 onwards and all other large companies in 2025. Therefore, we advise you to start preparing as soon as possible.\u00a0\u00a0<\/span><\/p>\n Your first steps in 2022\/2023 should be to:<\/b><\/span><\/p>\n Start by already assessing the double materiality of your sustainability topics (general social & environmental footprint). Aligned with the proposed CSRD framework. Take notice of the CSRD reporting standards released in mid-2023 \u2013 and apply them to your preparation work.\u00a0<\/span><\/p>\n The CSRD mandates limited assurance by a third party- requiring \u2018accountancy-proof\u2019 reporting. Talking to an assurance provider beforehand helps prevent misalignment with the assurance requirements. And helps you get the required data, processes, and controls in place from the start.<\/span><\/p>\n Measure your baseline GHG performance- compliant with GHG Protocol \u2013 (scope 1, 2, and 3). As well as other important environmental KPIs<\/a><\/span> (think of land use, water use, human toxicity, etc) calculated via the scientific method Life Cycle Assessment (LCA).<\/span><\/p>\n Use EU reference frameworks such as <\/span>UNGP on Business and Human Rights<\/span><\/a>, <\/span>the OECD Guidelines<\/span><\/a><\/span>, and the <\/span>Charter of Fundamental Rights<\/span><\/a><\/span>\n
Quick summary of the Goals of the CSRD:<\/h3>\n
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![\"EU-CSRD-One-pager_Ecochain\"](\"https:\/\/ecochain.com\/wp-content\/uploads\/2023\/05\/EU-CSRD-One-pager_Ecochain.jpg\")
2. Which companies fall under the CSRD?<\/b><\/h2>\n
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3. When do I have to comply with the new CSRD?<\/b><\/h2>\n
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4. What should I report under the CSRD?<\/b><\/h2>\n
The first set of standards:<\/span><\/h3>\n
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![\"\"](\"https:\/\/ecochain.com\/wp-content\/uploads\/2023\/05\/Double-materiality_Ecochain.jpg\")
<\/figure>\nThe second set of standards:<\/span><\/h3>\n
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5. How do I comply with the CSRD reporting requirements?<\/b><\/h2>\n
Climate: TCFD & GHG Protocol<\/b><\/h3>\n
![\"\"](\"https:\/\/ecochain.com\/wp-content\/uploads\/2023\/05\/TCFD-Climate-recommendations_Ecochain.jpg\")
Complete Company Environmental Footprint: EU Taxonomy\u00a0<\/b><\/h3>\n
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A robust footprint measurement system.\u00a0<\/b><\/h3>\n
Ecochain for company AND product footprints<\/h4>\n
6. <\/b>When do I take the first steps for the CSRD?<\/b><\/h2>\n
1. Assess your double materiality and take notice of the standards in mid-2023.<\/strong><\/h3>\n
2. Have an initial discussion with a third-party assurance provider.<\/strong><\/h3>\n
3. Measure your baseline environmental<\/strong><\/span>(LCA) <\/strong><\/span>& GHG performance.<\/strong><\/span><\/h3>\n
4. Start assessing social considerations in your value chain.<\/strong><\/span><\/h3>\n