A deeper look into CSRD

CSRD a driver for change

The new reporting directive will state which types of companies that are obliged to report and what data they must disclose. The increased transparency will lead to an easier evaluation of companies and assessment of risks and opportunities.

“The CSRD will make it easier for businesses and consumers to move their preferences to companies that behave in a more sustainable way. Let’s say that you are a pharmaceutical company with a net zero emission target. With the CSRD, you can now determine which suppliers you want to work with based on the information on CO2 emissions that your suppliers have disclosed in their sustainability statements. The idea is that transparency will lead to change.”

Reporting standards

CSRD is structured in line with ESG, which stands for Environment, Social and Governance. ESG is a common structure for companies to use when they inform stakeholders about their sustainability work.

As a tool for the sustainability reporting the EU has adopted 12 European Sustainability Reporting Standards (ESRS). Two of the standards cover general requirements and general information and are mandatory for all companies subject to the CSRD. The other ten so called topical standards cover the full range of environmental, social, and governance issues.

Double materiality analysis

It is not all topical standards that are relevant to all companies. The first task is to perform a Double Materiality Analysis (DMA). The result of the DMA determines which topics a company must report on.

“If you are a manufacturer of IT equipment for example, reporting on biodiversity may not be relevant to you. To deal with this dilemma, companies must first analyze which topics that are relevant to them, and only report on these topics.”

Double materiality means that the analysis must cover both the issues that have an impact on the company, and the issues that the company has an impact on.

“At Stena Metall we are currently preparing the data that our customers will need from us, to analyze their value chain, such as data on their CO2-emissions related to their waste management. There will be an increased pressure on sustainability reporters to have high quality data, and we can help them with that,” concludes Leise Marud.

Stena CO2 Impact is a new service that will make it easier to do your sustainability reporting for indirect carbon dioxide emissions.