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What is the Sustainability Report – CSRD?
The Corporate Sustainability Reporting Directive (CSRD) is a European directive adopted in December 2022, which strengthens companies’ obligations to disclose information on sustainability. The goal of this directive is to enhance corporate transparency regarding their environmental, social, and governance (ESG) impacts. This transparency is essential for directing financial flows towards more sustainable investments and allowing companies to be evaluated on their contribution to sustainability.
Information to be disclosed
The required information is divided into three main themes:
– Environment: This includes resource management, reducing greenhouse gas emissions, protecting biodiversity, and transitioning to a low-carbon economy.
– Social: This refers to working conditions, human rights, gender equality, diversity and inclusion, as well as interactions with stakeholders such as local communities.
– Governance: This section focuses on transparency in corporate management, the composition of boards of directors, anti-corruption practices, and risk management systems.
This information must comply with the double materiality principle. This means that the company must assess both the impacts of its activities on the environment and society, as well as the impact of these issues on its own financial performance. For example, a company should report not only on its contribution to greenhouse gas emissions but also on the potential impact of climate change on its operations.
Companies concerned
The CSRD applies to several categories of companies:
– Listed companies on regulated markets in the European Union, including small and medium-sized listed enterprises (SMEs);
– Large companies exceeding two of the following three criteria: a total balance sheet exceeding €25 million, a net turnover exceeding €50 million, or more than 250 employees;
– Non-European companies with European net turnover exceeding €150 million and a branch in Europe.
Micro-enterprises are excluded from these obligations, while certain subsidiaries may benefit from exemptions under specific conditions.
Context and objectives
The directive is part of the European Green Deal, launched in 2019, which aims to transform the Union into a modern and sustainable economy with net-zero greenhouse gas emissions by 2050. The sustainability report is designed to provide reliable and comparable information to investors, authorities, and citizens, thereby enabling more informed decision-making. It also helps harmonize sustainability reporting standards across the European Union.
In conclusion, the sustainability report mandated by the CSRD is a central element of the ecological transition and the promotion of a responsible economy in Europe.
Source : CELEX_32022L2464_FR_TXT
