Navigating legislation: Corporate Sustainability Reporting Directive (CSRD)
The Corporate Sustainability Reporting Directive (CSRD) is shaking things up for businesses in the UK and EU, making sustainability reporting more comprehensive and essential.
It is designed to align with international sustainability standards, facilitating comparability and consistency across borders.
Here’s a straightforward guide to help your business stay ahead.
Who is affected?
Starting from Reporting Year 2024
Large Companies
Defined as companies meeting at least two of the following criteria:
Over 250 employees.
More than €40 million in net turnover.
More than €20 million in total assets.
Listed SMEs
Small and medium-sized enterprises listed on EU-regulated markets.
Non-EU Companies
Non-EU companies with a net turnover of more than €150 million in the EU and having at least one subsidiary or branch in the EU exceeding certain thresholds.
From 2026 Onwards
Remaining SMEs
SMEs not initially covered but operating in high-risk sectors or exceeding certain thresholds may eventually be included in the scope.
Gradual implementation to ensure SMEs can adapt to the new reporting requirements.
7 steps to getting on top of CSRD:
1. Get to Grips with the CSRD Requirements
First things first: know what you’re dealing with. The CSRD isn’t just for the big public companies anymore. It now includes large private firms and even SMEs in high-risk sectors. The directive covers environmental impact, social responsibility, and governance factors. Make sure you’re clear on what’s required and the deadlines.
2. Figure Out What Matters Most with Materiality Assessment
Not all sustainability issues are created equal. Conduct a materiality assessment to pinpoint which ESG factors are most relevant to your business and stakeholders. This helps you focus on what truly matters, ensuring your actions and reports are both relevant and impactful.
3. Set your ESG targets and action plan to achieve them
Fundamentally, the CSRD is about driving action. Just talking a good game will not cut it with regulators and stakeholders. For each ESG factor that is material to your business, set objectives and a clear action plan outlining what is required to deliver these targets.
4. Set Up Solid Data Collection
Good reporting needs good data. Invest in or upgrade your data collection systems to capture the necessary ESG metrics accurately. This means pulling in data from different departments, ensuring it’s reliable, and being transparent about it. Look into specialised software that can help manage all this data efficiently.
5. Talk to Your Stakeholders
Your stakeholders—employees, customers, investors, regulators—need to be in the loop. Engage with them to get valuable insights and make sure your sustainability efforts align with their expectations. Clear, honest communication about your progress and challenges builds trust and boosts your reputation.
6. Keep Improving Your Reporting Practices
Sustainability reporting isn’t a one-and-done deal. Regularly review and update your practices to keep up with evolving standards, stakeholder feedback, and your own progress. This continuous improvement not only keeps you compliant but also positions you as a sustainability leader.
7. Adopt an Opportunity Focussed Mindset
See the directive as more than just a compliance checklist—it’s a chance to drive positive change and create long-term value for your company.
Let us help you to get started
Here are some of the tasks we can help you with:
Scope what the CSRD means for your business and establish your reporting requirements
Undertake a Double Materiality Assessment
Assess your current position versus the required position
Set objectives on material ESG topics and create action plans to deliver them
Perform a Data Gap Analysis
Create, streamline and embed a data collection and monitoring process internally
Stakeholder engagement
Assess technology tools for the Production of the Report
As always, if you would like to talk to one of the Thrive team about CSRD, or getting ready for any other existing disclosure, please email: jane@thethrivebusiness.com
More about CSRD
There are ten topical standards covering specific reporting requirements for various environmental, social, and governance matters.
Executives must determine which disclosure requirements—and which of more than 1,000 data points—are material and therefore need to be included in their reporting. They need to provide qualitative reporting on their assessment for each IRO, and their plans for addressing them.
The directive is underpinned by the European Sustainability Reporting Standards (ESRS), which lay out disclosure requirements in detail.