What the New CSRD Means for SMEs

You've previously learned why it's worth preparing a sustainability report in our 10 good reasons for sustainability reporting blog article. The following article introduces the CSRD and explains the consequences of the new guideline for sustainability reporting.

CSRD Goals

CSRD stands for Corporate Sustainability Reporting Directive. It is an extension of the Non-Financial Reporting Directive (NFRD). With the CSRD as a cornerstone of the European Green Deal, the topic of sustainability reporting is now to be raised to the same level as financial reporting.

CSRD Background Information

With the Non-Financial Reporting Directive (NFRD), large companies have already been legally required to disclose non-financial aspects of their corporate activities since 2014 (EU law) and 2017 (German law). In November 2022, the EU adopted the Corporate Sustainability Reporting Directive (CSRD). It extends both the content to be reported and the group of companies subject to reporting requirements. As a result, small and medium-sized enterprises (SMEs) will also be subjected to a reporting obligation, starting in 2027.

Reporting Content

The NFRD requires reporting on the following aspects:

  • Environmental concerns
  • Workplace issues
  • Social issues
  • Human rights violation
  • Combating corruption and bribery

 

The CSRD extends this reporting obligation. For the area of environmental concerns, reporting will soon be required on the following aspects, among others:

  • Climate protection
  • Combating climate change
  • Water and marine resources
  • Resource use and circular economy
  • Pollution
  • Biodiversity and ecosystems

All content must refer to the 1.5-degree target. A mandatory external review of the reports has also been added.

Reporting Companies

The CSRD also expands the group of companies subject to reporting requirements. The reporting obligation for the CSRD takes effect in multiple stages.

 

CSRD-en

Helpful Standards

Guidance for the preparation of a sustainability report is provided by a variety of frameworks such as:

  • German Sustainability Code. This is an internationally applicable reporting standard for sustainability aspects. It is available in various languages and is used in various European countries. To comply with the Sustainability Code, users must prepare a declaration on 20 Sustainability Code criteria (including materiality, climate-relevant emissions, and qualification). There are 13 industry-specific guidelines available for reference.
  • GRI Standards. This is the modular framework of the Global Reporting Initiative. The GRI Standards are the most widely used framework for sustainability reporting at the international level.
  • European Sustainability Reporting Standards (ESRS). Based on the CSRD, the European reporting standards are to be adopted which are intended to provide orientation for companies in their reporting and contribute to the comparability of reports. A draft of these standards is already available. Final adoption is expected in summer 2023. The following figure provides an overview of the planned standards.

 

ESRS-enOur offer

Want to write a sustainability report for your company? Waste no time in getting ready for the upcoming reporting obligation. With the preparation of our own DNK statement and thanks to our many years of experience in sustainability consulting, we were named DNK training partner at the beginning of 2022. Feel free to contact us for a free consultation.

 

 

Author: Katharina Prontnicki
Dr Denise Ott

Your contact person
Dr Denise Ott

Do you want to learn more about the topic?

Thanks for reading! If you would like to learn more about this topic, I look forward talking to you. Whether you run a company, want to drive your development department forward, or work in a research institution or public facility - with us you make technical innovations possible. We have made it our business to support tomorrow's market leaders in generating ideas for innovations, developing new products and services and launching them on the international market. You and your project are always at the centre of our attention.
chat-icon

EurA AG
Max-Eyth-Straße 2
73479 Ellwangen

T- 079619256-0
info@eura-ag.com