Introduction

In an era where sustainability and corporate responsibility are not just ideals but expectations, understanding the Corporate Sustainability Reporting Directive (CSRD) is vital for businesses across the European Union and beyond. As a leader in ESG (Environmental, Social, and Governance) consulting, Futureproof offers an in-depth analysis of the CSRD, explaining its nuances and implications for your business.

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What is the CSRD?

The CSRD is a significant legislative framework introduced by the European Union, effective from January 5, 2023. It mandates EU businesses, including qualifying subsidiaries of non-EU companies, to disclose their environmental and social impacts comprehensively. This directive is a cornerstone in Europe’s broader strategy to foster sustainable finance and responsible corporate behaviour.

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Key Objectives of the CSRD:

• Enhance transparency in sustainability reporting.
• Provide investors and stakeholders with clearer insights into a company’s ESG performance.
• Support EU’s long-term sustainability goals, including the 2050 climate-neutrality target.

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Who Needs to Comply?

By 2028, a broad spectrum of organisations must adhere to the CSRD, including:

• Listed companies on EU markets.
• Large EU-based undertakings.
• Non-EU companies with significant operations or revenue in the EU.

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Timeline for Compliance:

• 2024: Entities already under NFRD mandates.
• 2025: Additional large undertakings.
• 2026: SMEs listed on EU-regulated markets.
• 2028: Certain non-EU entities.

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Reporting Requirements and Standards

Core Elements:

• Double Materiality: This concept necessitates that organisations report both how their activities impact environmental and social aspects and how these aspects affect the organisation's financial health.
• European Sustainability Reporting Standards (ESRS): These standards, developed by the European Financial Reporting Advisory Group (EFRAG), specify the metrics and methodologies for reporting.

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Areas of Disclosure:

• Environmental protection.
• Treatment and inclusivity of employees.
• Social responsibility and community impact.
• Governance, ethical business conduct, anti-corruption, and anti-bribery policies.

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The CSRD vs. NFRD: The Evolution of Reporting

The CSRD extends the scope of its predecessor, the NFRD (Non-Financial Reporting Directive), requiring more detailed and broader reporting, including mandatory third-party auditing. This shift signifies a more rigorous and comprehensive approach to corporate sustainability reporting.

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Penalties for Non-Compliance

Failing to comply with the CSRD can result in significant penalties, depending on the severity and duration of the breach. It’s crucial for companies to understand their obligations and adhere to these regulations to avoid legal and financial repercussions.

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Preparing for Compliance: Futureproof’s Role

At Futureproof, we understand the complexities and challenges of aligning with the CSRD. Our platform can guide your business through every step, ensuring compliance and helping you harness the value of sustainable business practices.

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How Futureproof Helps:

We make it easy. Giving you a CSRD roadmap, pre-made resources, easy data capture and management and expert support when you need.
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1) Understand Your Requirements

Start your CSRD compliance with a bespoke action plan, supported by our expert team.
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2) Capture All ESG Data

‍Easily upload, integrate and organise all your ESG information into the Futureproof platform.
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3) Hundreds of Resources

Access our ESG library of over 500+ resources to fill any gaps for your CSRD report.
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4) Report for Compliance

Export and download your thorough CSRD reports, ensuring full compliance with regulations.

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Start with your CSRD Reporting →
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Conclusion

Embracing the CSRD is not just about regulatory compliance; it’s a step towards a more sustainable and responsible future. Futureproof is committed to guiding businesses through this transformative journey, helping you align with these directives while driving meaningful change in your industry.