Is your business ready for the Corporate Sustainability Reporting Directive Legislation?
Corporate Sustainability Reporting Directive (CSRD), is the new EU legislation that became national law in November 2022, which requires companies to publish regular reports on their environmental and social impact activities. The new law requires businesses to report on how sustainability issues such as climate change impact their business and in turn, how their operations have a direct impact on their stakeholders and the environment.
The CSRD legislation is designed to support potential investors, consumers, policymakers, and other stakeholders to evaluate large businesses’ environmental and social impact before entering into a relationship or negotiation with the organisation. It is thought that the escalation of Environmental, Social, and Governance (ESG) reporting has underpinned the CSRD legislation proposal and eventual adoption into national law.
Does the legislation apply to your organisation?
Almost 50,000 companies are expected to be impacted by the new CSRD obligations, a significant increase from the 11,700 companies covered by the non-financial reporting directive (NFRD). Before we take a look at the potential impact, here’s a list of the types or organisations who are obliged to adhere to the CSRD legislation.
Organisations who will be impacted by CSRD includes large companies listed on regulated markets in the EU (apart from micro enterprises), listed SMEs, non-EU companies with a net turnover of 150 million euros and have a subsidiary or brand in the EU, large public interest entities with 500+ employees such as banks and insurance companies, and large companies meeting two out of three criteria: 250+ employees, and/ or 40 million euros turnover, and/ or 20 million euros total assets.
What are the timescales?
Companies who are obliged to work alongside the new corporate sustainability reporting directive have time on their side, as we publish this blog today in January 2023, businesses have just shy of an entire calendar year to properly prepare and align operations with the CSRD.
First reports following the CSRD requirements will need to be published in quarter one of 2024, and SMEs are expected to work in line with the CSRD by January 2026, giving smaller businesses additional two years. We have created a timeline below to provide a full storyline of events and to help you save the key dates.
No need to be concerned: STAR Index is primed and ready to help!
STAR Index has over 15 years of supply chain experience and can provide a platform to manage the wider horizons of ESG challenges, the latest challenge of course being that of the new corporate sustainability reporting directive.
We work with a plethora of partners who all support their clients with legislation and sustainability challenges. As a STAR Index partner you and your clients can use our platform to navigate through challenges such as the CSRD and begin your journey mapping ESG supply chain risk all in one place. Learn how becoming a partner could benefit you and your clients today, by clicking here.