Importance of CSRD

On July 31, 2023, the European Commission published the final text of its first twelve European Sustainability Reporting Standards (ESRS). ESRSs make sustainability reporting significantly more complex and strict: more and more complex information shall be disclosed by the companies involved. With the requirements for clear ESG ambitions, strategies, policies and measures, as well as over a hundred metrics and targets, the volume and scope of reporting requirements has multiplied. In the first phase, certain companies will already have to fulfill sustainability disclosures based on the ESRS in the 2024 reporting period. Considering also their value chain (upstream and downstream), companies must assess which topics to report using the concept of double materiality: which are the areas that are important from a financial or impact point of view. Although this type of reporting is extremely resource- and investment-intensive, in the long run it can be the basis for creating a more responsible business environment.

ESRS standards

The ESRS set out detailed reporting requirements for companies subject to the CSRD. Two comprehensive standards provide common reporting concepts and comprehensive disclosure requirements, including multiple data points. Ten topic-specific standards complement these with detailed disclosure requirements on environmental, social and governance topics. Together, these twelve ESRSs require companies to provide information on their management and strategy for material sustainability topics, impacts, risks and opportunities arising from sustainability topics, and to publish quantitative metrics and targets – the latter also applied to the value chain as a whole.

Following the materiality assessment, companies must ensure that they have the data, processes and expertise to report also on topics that are new to them, such as biodiversity or the circular economy.

Companies must develop and demonstrate their corporate governance practices for addressing sustainability issues, including how sustainability key performance indicators (KPIs) affect compensation.

Disclosures will require an assurance provided by a third party, therefore, clear levels of control environment, documentation of processes and controls will be required to support the disclosures.

Companies must therefore prepare for these challenges and recognize the opportunities offered by this expanded reporting in line with regulatory expectations.

Our services:

  • Double materiality assessment: development of a company-specific methodology for impact analysis and assessment of financial materiality, conducting the materiality assessment.
  • Comprehensive CSRD readiness assessment.
  • Preparation of the non-financial report in accordance with CSRD, in XBRL format required by the Directive.

Services according to the letters E, S and G

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