CSRD
December 3, 2024 | The Corporate Sustainability Reporting Directive (CSRD) is a new, comprehensive EU reporting directive considering (non)-financial information in relation to sustainability.
The Corporate Sustainability Reporting Directive (CSRD) is a new, comprehensive EU reporting directive considering (non-)financial information in relation to sustainability.
Why align reporting with CSRD? - It will be mandatory to follow the guidelines for EU (non-)listed companies. It is an integrative, comprehensive approach towards sustainability and financial reporting and its aim is to increase transparency, reli- ability, comparability and most importantly: it identifies impacts, risks and opportunities for sustainability.
When do you start? - As soon as possible. Why? For large companies that are already subject to NFDR, CSRD will be mandatory from FY 2024. Meaning that in a couple of months, data gathering should start. For other large companies, CSRD will be mandatory from FY 2025, and for SMEs from FY 2026.
How do you start? - Whether you already have data in place, or you have to start from scratch - with Cooltree and Scaler as your guide through this comprehensive approach, we will take the following steps towards CSRD compliance.
Get familiar with CSRD
It consists of European Sustainability Reporting Standards (ESRSs) which guide the reporting process, existing of General requirements (ESRS 1) and General Disclosures on Environmental, Social and Governance (ESG) topics (ESRS 2).
The CSRD starts with general disclosures that should be reported by every company, which includes general information on the company such as: the business model, strategy, targets, and company and sustainability gover- nance.
Besides the general disclosures, you report on ESG topics that are identified as material to your company as assessed in a double materiality assessment, and their related impact, risks, opportunities/ metrics and targets/ gover- nance/ strategy. These are thus specific to your company. In addition, the company also reports on sector-specific topics, which are yet to be released.
How Cooltree can help you align with CSRD
We start with conducting a double materiality assessment, then we determine CSRD preparedness, afterwards we make a gap analysis to identify missing data. This is then followed by creating an improvement plan which helps with increasing data coverage and quality. Based on this we then generate a CSRD report in Scaler, which can also be used to manage your audit.
Conduct Double Materiality Assessment
Identify which topics are material for the entity
Take into account (i) the impact of the entity's operations on the environment and society (inside-out),
and also (ii) the sustainability-related matters that potentially affect the company’s financial performances (outside-in)It identifies the material impacts, risks and opportunities that are to be reported in the CSRD
Determine CSRD preparedness
Analyse the data that is already available (guided by the Scaler Platform)
Does the entity already comply with another standard or benchmark, such as GRI, EU taxonomy, ISSB, TCFD, NFDR, or GRESB? CSRD is (partly) aligned with these standards and will contribute to an efficient processReport (CSRD and SFDR compliant)
Generating the EU Taxonomy alignment report
Gap analysis: Identify missing data and data collection advice
The missing data that is needed for CSRD will be identified and communicated with the client to make it
easy to collect the data. Cooltree will assist, guided by our data platform ScalerAdvice on how to collect the missing data, set up work- ing groups to collect the data
Create an improvement plan: Increase data coverage and its quality that is reported to CSRD
Set up an improvement plan based on the gap analysis with deadlines and responsible stakeholders
Start to execute the actions to improve alignment and collect the right data
Significant projects, such as climate risk assessments, are set up during this phase, which is not only good for your CSRD alignment, but also for the resilience, competitiveness and sustainability of your company
Generate CSRD report
• In the Scaler Platform, you will be able to generate afully aligned CSRD report and update at your preferredfrequency
• Besides data coverage, the platform gives you insight into the data quality of the underlying data
• Continuously improve your data and monitor progress with all stakeholders involved
Manage your audit
Start early to ensure a well structured process to be prepared for the (mandatory) audit
Scaler provides straightforward insight into missing data and keeps an audit-log of any changes made during the data collection
With Scaler, it empowers the auditor to conduct an in-depth audit into the underlying values
Want to know how we can help your business align with CSRD reporting? Get in touch at: info@cooltree.nl.