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The European Commission recently published a draft version of the first set of standards for the upcoming Corporate Sustainability Reporting Directive (CSRD), the Climate Standard. We summarize the published documents in this article for you to provide an overview of what you will have to report on and show you why it is necessary to not only get a grasp of your company’s emissions, but also those of your supply chain. As this is just a first draft of the standard, changes are still possible.
On 21 April 2021, the EU Commission presented a proposal for the Corporate Sustainability Reporting Directive (CSRD), the successor of the Non-Financial Reporting Directive(CSR-RUG). The EU Commission proposes to expand the scope of application from 11,000 to approximately 49,000. Companies that fall under the following criteria are required to report under the CSRD:
However, the directive only applies to SMEs traded on exchange-regulated markets in the EU.
The draft standard is clustered into three reporting areas: Strategy, Implementation, and Performance Measurement.
Within the strategy category, you are required to report on how your business strategy both impacts and is impacted by climate change, which business risks and opportunities result from climate change, and how your organization manages climate-related aspects. Aspects you have to report on in particular are:
The implementation category focuses on the policies and targets your business has agreed on in relation to climate change.
The performance measurement category is without a doubt the most challenging for any business, as it requires you to measure your climate impact and report your actual emissions.
If you want to read more about the climate standard, you can download the full publication of EFRAG, the European Financial Reporting Advisory Group, here.