CSRD for large and publicly listed companies
Discover what this means for you as a reporting entity
As a large or publicly listed company, you now face the challenge and opportunity to transparently report on your sustainability performance. The CSRD requires companies to provide detailed information about their impact on the environment, society, and governance (ESG). Prepare your company for the future and contribute to a more sustainable world by starting CSRD reporting today.
European commission aims to streamline sustainability reporting
The European commission has launched an initiative, Omnibus 1, to streamline reporting rules for companies in EU countries. The proposal modifies several aspects of the CSRD legislation. Further consultation and approval from the European parliament and the council are needed. The outcome is expected within a year.
Getting started with CSRD reporting
You can take the following steps to make your business practices more sustainable.
Setup
Determine to what extent the organization and stakeholders are already involved in sustainability and assemble a project team based on this. Having a mission or sustainability strategy is usually the first starting point. Develop a project plan with the CSRD team and describe the expected outcomes, actions, and tasks. Involve the accountant early in the process to provide input on the approach.
Analysis
Double Materiality Analysis
Determine which sustainability issues are material for the organization and stakeholders through a double materiality analysis. Consider the entire value chain and involve all relevant stakeholders, such as suppliers, service providers, NGOs, shareholders, banks, government, and customers.
Gap Analysis
This process provides insight into what the company is already doing and where gaps exist that require more attention.
- Start with an analysis of the current situation: determine which ESG information is already known within the organization and what infrastructure is in place to manage that information.
- Then focus on the future situation: determine which material topics need to be reported on.
- Analyze the gaps or deficiencies.
- Then develop an action plan to collect the relevant data and close the gap, including KPIs.
Implementation
Implementation involves data collection, data verification, and policy. Collect the required data from various departments within the organization. Some information may be known to the HR department, while other information may be managed by supply chain management. Verify the quality of the collected data. Register what has been collected, how, and when. Define policies on ESG-issues, ensure a clear governance structure, and develop action plans. Ensure clear risk and mitigation strategies.
Reporting
Report the material issues via an existing business intelligence (BI) or management information dashboard. Start with draft disclosures based on available data and later add data that takes more effort to obtain.
Completion
An external audit (limited assurance) for the CSRD report is an independent review conducted by a recognized auditor or specialized service provider. The purpose of this audit is to verify the accuracy, completeness, and reliability of the sustainability information that companies report. In the Netherlands, the external audit must be conducted by a registered accountant.
Contact the Sustainability Expertise Team
Do you have a (detailed) sustainable business plan and want to know what the possibilities are? Discuss your financing options with us. Get in touch, and you will receive a response within two working days.
What you need to know
What is ESG?
Environment, Social, Governance (ESG)
The Corporate Sustainability Reporting Directive (CSRD) requires companies to extensively report on their environmental, social, and governance (ESG) performance. ESG reporting is crucial for transparency and provides insight into how companies manage sustainability and social responsibility.
Environmental:
Companies must report on their environmental impact, such as CO2 emissions, energy consumption, and waste management.
Social:
Reports must include information on social issues such as working conditions, human rights, and diversity and inclusion.
Governance:
Companies must disclose their governance practices, including business operations, ethics, and anti-corruption measures.
What are ESRS standards?
To meet the CSRD requirements, companies must report using the European Sustainability Reporting Standards (ESRS). This is a package of twelve standards covering various environmental, social, and governance aspects (ESG). The 12 standards fall under three overarching standards: general requirements (ESRS1), general disclosures (ESRS2), and thematic standards.
What is the Double Materiality Matrix?
Materiality refers to important information for a company's stakeholders. Material topics can have a substantial impact on the economic value and decision-making of stakeholders. Materiality helps companies determine which sustainability information is essential to report.
The CSRD introduces the concept of double materiality. Double materiality requires companies to assess and report sustainability issues from two perspectives:
Financial Materiality:
This concerns how sustainability issues affect the organization's financial performance. For example, when flooding at a production site in Bangladesh can lead to financial damage.
Impact Materiality:
This concerns how the organization's activities impact people and the environment. For example, a company's CO2 emissions and their impact on climate change, or working conditions in the supply chain.
How do you submit the CSRD report?
The CSRD requires companies to prepare and submit their reports according to specific guidelines and standards. Here's how and where companies must submit their CSRD reports:
- Integration in the Annual Report: Companies must integrate their CSRD reports into the annual management report. This means that sustainability information is included alongside financial reporting, providing a holistic overview of the company's performance.
- European Single Electronic Format (ESEF): Reports must be submitted digitally via the European Single Electronic Format (ESEF). This format ensures uniformity and makes it easier for stakeholders to access and compare data.
- Submission to the Competent Authority: Companies must submit their reports to the competent national authority responsible for overseeing CSRD compliance. In the Netherlands, this is done through Standard Business Reporting (SBR). SBR is the national standard for exchanging all business reports, such as annual financial statements.
- Website Publication: In addition to official submission, companies must also make their reports publicly available on their own corporate website. This increases transparency and makes the information accessible to a broader audience, including investors, customers, and other stakeholders.
Complying with these submission requirements ensures that companies meet the CSRD and contributes to transparent and sustainable business operations.
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