CSRD: The obligation to report on sustainability
The CSRD (Corporate Sustainability Reporting Directive) came into force on January 5, 2024 and replaces the previously applicable NRFD (Non Financial Reporting Directive) and significantly expands it. This makes sustainability reporting equivalent to financial reporting. It is intended to create transparency and ensure that companies disclose their environmental impact. This is an important step towards achieving the goals of the European Green Deal, which aims to make the EU climate-neutral by 2050. But who is affected by CSRD? And what requirements does the new directive contain?
Who is affected by CSRD?
According to estimates, CSRD is relevant for around 50,000 companies in the EU, including 15,000 in Germany alone. Since January 2024, all companies that are already subject to the NRFD are affected. From 2025, the CSRD will affect all larger companies that meet two of the following three criteria
- 250 employees
- 25 million € balance sheet total
- 50 million € net turnover
Do you meet two of these criteria? Then it is advantageous for you to tackle implementation at an early stage.
What requirements do the new guidelines contain?
In future, companies will have to report more comprehensively and according to more uniform standards. The aim is to improve the measurability and comparability of reports through the use of key figures.
- An important element of the new regulations is the concept of "double materiality", which is defined in the CSRD. Companies must now report both on the impact of their business activities on people and the environment and on the impact of sustainability factors on the company. Previously, reporting was only required if both aspects applied.
- As with financial reporting, sustainability reporting must be externally audited in future. Initially, a "limited assurance" audit is planned, followed by a "reasonable assurance" audit.
- In future, sustainability information is to be a mandatory component of the management report in order to facilitate access to the information. This illustrates the growing importance of sustainability reporting, which is being upgraded in parallel with financial reporting.
We support you!
The new regulations require some changes for medium-sized companies. As part of the CSRD, they must report comprehensively on their energy efficiency, the use of renewable energies and the reduction of CO2 emissions. Energy management software can serve as a basis, ensuring detailed recording and processing of all relevant data. Our econ4 software can record your energy consumption in real time and provide a detailed breakdown of energy consumption. This makes it easier to compile the data for your sustainability reporting. It also optimizes your energy efficiency and saves you money.
But an energy management software is only part of the transition. For example, the reporting guidelines require you to carry out a double materiality analysis and evaluate the parts of the report that apply to you. Comprehensive support throughout the CSRD implementation process is therefore advisable for you.
At econ solutions, we work closely with BFE Institut für Energie und Umwelt. BFE can support your company with the following:
- They provide training on understanding the legal requirements and reporting requirements
- They work with you to design the double materiality analysis
- They help you to evaluate the parts of the report that apply to you
- You support the creation of the data basis
- They are your technical contact during the preparation of the report
Our experienced colleagues will support you with their expertise throughout the CSRD implementation process to ensure a smooth transition.
If you have any questions, we will be happy to assist you at any time.
Important note: This text does not replace comprehensive legal advice. This document has been designed to provide general information. The specific situation and objectives of individual companies are not taken into account individually. The assessments contained herein are not to be understood as recommendations for action. econ solutions GmbH accepts no liability for the use of this publication or its content. The data contained in this publication has been obtained from sources that we believe to be reliable.
Sources
Corporate Sustainability Reporting Directive (CSRD) - CSR (csr-in-deutschland.de)