It’s been hard to miss the buzz around the anticipated acceptance of the Corporate Sustainability Reporting Directive (CSRD). On November 10th, the European Parliament has approved the proposed Directive, with 85% of the Parliament in favor! The CSRD will come into effect at the beginning of next year at the latest for the first group of corporations. In parallel, EFRAG has updated the exposure drafts of the sustainability reporting standards and submitted the first set of draft ESRS to the European Commission.
With the finalization of the new Directive and Standards, reporting organizations can accelerate the implementation of the Standards in their reporting processes.
We have highlighted some notable changes which are worth picking up on:
- Less KPI’s compared to the previous published draft. The disclosure requirements have been limited from 136 to 84.
- Governance has been limited to one standard (G1) instead of the original two standards.
- The double materiality principle stands. However, the “rebuttal presumption” principle has dropped, meaning that an organization does not have to substantiate non-materiality for each (sub)topic.
- Organizations are given an extended period of 3 years to identify and measure impact on their value chain.
- Overall, the structure of the CSRD has been made aligned with the TCFD and the ISSB
In addition to the first set of sector-agnostic standards, be sure to keep an eye out for the sector-specific standards. EFRAG will focus in the next months on a set of 2 draft standards, draft ESRS for SMEs and draft sector-specific standards:
- 5 Sectors covered by GRI: agriculture, coal mining, mining, oil+gas (upstream), oil+gas (mid-to downstream).
- 5 High-impact sectors: energy production, road transport, motor vehicle production, food/beverages, textiles.
CSRD in effect, now what?
The approval of the regulation is great news for the European sustainability transition. But confirmation of the regulation alone won’t help you make sense of how this is going to impact your organization. We wish we could give you a silver bullet solution, but the truth is applying the CSRD requirements is not an easy task.
Want to read more background information about the CSRD? Read our previous blogs here:
If you, like many of our clients, could use some help to start your journey, we offer a variety of resources.
To kick-start your preparation for the CSRD and the Taxonomy disclosures, we developed the EU regulation scan, which we successfully performed for our clients. This comprehensive scan allows your company to get insight in what regulations will be relevant for you and what their requirements are. Our Intire methodology for the EU regulation scan consists of the following steps and is customizable based on your specific needs:
- Gap analysis of your current reporting requirements and CSRD requirements.
- A high-level assessment of your organization’s portfolio for Taxonomy eligibility and alignment.
- Document results and findings, specific deliverable can be custom.
- Reporting-out to discuss the results together and plan concrete follow-up actions if necessary.
In addition to set you up with a tailored overview of disclosure requirements, Intire offers a number of technical and management resources to help you prepare:
- Updated materiality assessments according to the newest double materiality methodology.
- Dedicated solutions and tools to fully comply with CSRD assurance criteria.
- Development of tailored implementation roadmaps.
Interested in the EU regulation scan or other resources Intire has to offer? Please leave your details in the form below, and we’ll help you get ready for the CSRD!
EU Regulation scan
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