CSRD – An opportunity to transform your business and future-proof your sustainable practices
CSRD – an incremental step towards strengthened and more transparent sustainability reporting
The Corporate Social Responsibility Directive (CSRD) was proposed in April 2021 as a new directive that aims to strengthen and make sustainability reporting more transparent for companies in the European Union. It aims to increase transparency and accountability, and to encourage companies to integrate sustainability considerations into their business strategy and operations. It builds upon the Non-Financial Reporting Directive (NFRD) from 2014, which mandated EU-based companies to disclose non-financial information such as environmental, social, and governance factors. Even though NFRD rose the awareness and importance of sustainability reporting, there was a need for strengthened and more transparent reporting requirements for companies in the European Union. CSRD is a manifestation of just that.
So what’s new? Why is CSRD becoming increasingly important?
CSRD and NFRD differ in several ways. Firstly, the CSRD expands the scope of reporting requirements to cover a wider range of companies, while the NFRD applied only to large public-interest entities. CSRD will not only influence a wider range of companies – the effect itself will also be more considerable. It introduces more detailed and standardized reporting requirements and requires companies to report on their due diligence processes to identify and address human rights and environmental risks. Moreover, the CSRD introduces a requirement for third-party assurance of sustainability reports, ensuring that companies’ sustainability reports are independently verified.
7 steps to mature sustainability capabilities for companies
While the CSRD presents a significant challenge for companies, it also provides an opportunity to transform their business, align with sustainable practices, and establish themselves as sustainability leaders. This is becoming increasingly urgent as consumers, investors, and other stakeholders demand more action from companies to address environmental and social issues.
By realizing the importance, and thereby value of CSRD, CSRD can help companies to improve their sustainability performance. We help companies address CSRD challenges, achieve compliance, and leverage the benefits of sustainability reporting. By following these seven steps, companies mature their sustainability capabilities, enhance their reputation, and reduce exposure to sustainability-related risks.
1. Identify relevant frameworks
2. Identify relevant topics
3. Define needs and goals
4. Define gaps between current state and target
5. Develop a strategy and roadmap
6. Develop processes to secure relevant data
7. Transformation and execution
As part of Knowit, Ascend has access to specialized knowledge and expertise on CSRD and can assist companies in developing and executing their sustainability strategies, enabling them to leverage the benefits of CSRD and achieve long-term success. If you want to learn more about CSRD and how to prepare for it, you can visit Knowit’s blog post on the topic here.
The time to act is now – reach out to navigate the challenges of CSRD and transform your business for a sustainable future.