The CSRD Directive (Corporate Sustainability Reporting Directive) imposes stricter standards on European companies to demonstrate their commitment to sustainability. This new standard replaces the NFRD (Non-Financial Reporting Directive) and requires companies to measure, document and demonstrate their actions to reduce their impact on the environment. By imposing more transparency, the CSRD requires companies to publish extra-financial reports that detail their efforts in terms of governance, environmental and social performance.
This article explores in detail the CSRD directive, applicable since January 1, 2024, its challenges for companies and the technological tools that make it possible to effectively prove and document their actions.
Understanding the CSRD Directive and its importance for businesses
What is CSRD?
The CSRD was created following the NFRD to strengthen corporate transparency on sustainability. Compared to the NFRD, the CSRD extends extra-financial reporting obligations to a greater number of companies and imposes stricter standards for monitoring and publishing environmental, social and governance (ESG) data. Its aim is to ensure that companies take into account and communicate their efforts to reduce their environmental impact, improve their social practices and ensure ethical governance.
Companies must now provide reports in accordance with the ESRS standards (European Sustainability Reporting Standards) developed by the EFRAG (European Financial Reporting Advisory Group). These reports must include detailed information on resource management, greenhouse gas emissions and initiatives implemented to reduce their environmental footprint.
These standards aim to ensure the quality of ESG statistics in the reports published by companies. By focusing on double materiality, the directive requires companies to prove not only their impact on the environment, but also how these risks affect their turnover and overall performance. This approach reinforces the obligation of transparency, which allows companies to anticipate and minimize the risks related to their activities.
The CSRD directive is the basis of the new European regulation, requiring French and European companies concerned to prove their sustainability via extra-financial reports. Compared to the NFRD (Non Financial Reporting Directive), the CSRD extends to non-European companies operating on the territory of the European Union. This implies increased engagement, where the quality of ESG data must be ensured by external audits to guarantee transparency.
Why is CSRD crucial for European businesses?
CSRD reporting is essential for companies operating in the European Union (EU) as it requires increased transparency on environmental and social issues. Large companies, SMEs, and some non-EU companies operating in the EU are concerned by these CSR issues.
The ESG criteria, defined in the ESRS standards, are used to assess the environmental, social and governance performance of companies. EFRAG ensures that these criteria are rigorously applied, thus ensuring compliance with the requirements of the EU directive. In addition, the companies concerned must demonstrate how they take into account impact materiality in their decision-making processes, in particular those exceeding certain thresholds of turnover or number of employees.
Companies with more than 500 employees are particularly concerned by these extra-financial reporting obligations. In addition, French companies and other large European companies must integrate dual materiality into their analyses. This means that they must consider both their impact on the environment, but also how environmental risks can affect their business and financial performance.
Failure to comply with CSRD obligations results in severe penalties for companies that do not publish reliable ESG information, including significant fines for greenwashing or omission of information. Reports must include ESG criteria in accordance with the ESRS standards, which have become essential benchmarks for assessing the sustainability of companies. This framework aims to align companies’ sustainability practices with the European Union‘s carbon neutrality objectives.
Environmental issues: measuring, reducing and documenting your impact
Measuring environmental impact: where to start?
The measurement of a company’s environmental footprint is a prerequisite for compliance with the CSRD. The main environmental data to be collected include:
- Greenhouse gas emissions (scope 1, 2 and 3).
- Consumption of energy and water.
- Waste management.
This information should be measured using frameworks such as the GRI (Global Reporting Initiative) standards and the TCFD (Task Force on Climate-related Financial Disclosures) recommendations, which provide a holistic view of environmental impacts.
Reducing your environmental impact: what strategies for companies?
Companies can reduce their footprint by addressing these issues and implementing strategies such as:
- Process optimization to improve energy efficiency.
- Using renewable energy to reduce dependence on fossil fuels.
- Working with eco-responsible suppliers to reduce greenhouse gas emissions from the supply chain.
These strategies must be documented to demonstrate that concrete actions are being taken to reduce impacts on the environment.
Documenting your actions to ensure compliance with the CSRD
Documenting the actions taken is essential to meet the requirements of the Corporate Sustainability Reporting Directive. This involves:
- Using digital tools to collect, archive and centralize environmental data.
- Adopting technological solutions such as KeeeX to prove the authenticity and traceability of actions through digital fingerprints and digital certification.
- Reporting relevant indicators in extra-financial reports using ESRS standards.
This approach ensures that the information communicated is accurate and compliant with regulators’ expectations.
Extra-financial reporting under the CSRD directive
What data should be reported?
Committed companies must report a comprehensive set of data covering environmental, social and governance (ESG) aspects. The information to be included is:
- Greenhouse gas emissions (Scope 1, 2 and 3).
- Consumption of natural resources.
- Impacts on biodiversity.
- Measures taken to reduce environmental impacts.
Integrating these data into reports is essential to ensure trust and comply with the standards set by the CSRD Directive.
How to structure and publish a sustainability report?
Sustainability reports should follow a standardized structure to allow comparison and audit of information. They should include:
- An introduction to the company and its sustainability commitments.
Companies should adhere to the CSRD criteria and follow clear standards. The structure of the report should ensure the necessary trust. For example, the use of xHTML format, mandatory for CSRD reporting, facilitates the submission of information in EU systems such as the European Single Access Point.
- The environmental and social objectives.
- The methodologies used to measure and monitor environmental data.
Reports must also comply with the requirements of the AMF (Autorité des Marchés Financiers) to ensure compliance with trust standards. The use of reliable and verifiable environmental data is essential to avoid sanctions related to non-compliance with EU law. Rigor in the presentation of ESG criteria helps improve the quality of ESG data submitted to regulators.
- The results and the actions implemented to reduce the impact.
Ensuring the traceability and reliability of environmental data
Ensuring the reliability of reported data is essential to avoid sanctions. The use of blockchain and digital certification can ensure that information has not been altered since it was collected. KeeeX offers solutions that allow to anchor evidence and certify data, thus guaranteeing their authenticity.
The consequences on Trade Finance and logistics
Integration of environmental data in merchandise management
Future regulations will require the integration of environmental data into the management of goods. This involves including information on the carbon footprint of products and their transport in commercial documents. Companies will now have to take into account the effect of their supply chain and report these statistics in their extra-financial reports.
The application of the CSRD is a lever for improving the governance of companies operating in the logistics sector. Companies in France and Europe are subject to precise monitoring of the carbon footprint of their activities, while aligning with the objectives of the EU Green Deal. Compliance with these new sustainability requirements creates a competitive advantage for companies committed to reducing environmental impacts.
Transport and carbon footprint: measuring the environmental impact of goods
The transportation of goods generates a significant share of greenhouse gas emissions. companies must measure this impact using specialized tools such as the Carbon Footprint Calculator. This allows them to accurately calculate and report the carbon footprint related to their transportation activities.
Optimizing document management for environmental compliance
document management is essential to ensure compliance with CSRD requirements. By automating the collection and integration of environmental data, companies can improve traceability and reduce the risk of errors in their reporting. Solutions like those offered by KeeeX facilitate this process, ensuring that the documents submitted are accurate and traceable.
How to prove environmental actions through technology?
The Importance of Technological Tools to Prove Environmental Impact
Companies must transparently demonstrate their environmental actions to comply with the CSRD Directive. To achieve this, they must use technological tools that allow them to track and document their efforts in real time.
These monitoring tools automate the collection and analysis of data, ensuring its accuracy and traceability. They are also essential for generating reports compliant with ESRS standards. Companies can thus prove their compliance while optimizing their resource management.
KeeeX offers digital certification solutions that track each step of the actions undertaken in terms of sustainability and guarantee that the data has not been modified since it was collected.
Blockchain and digital certification for environmental data authentication
Blockchain plays a key role in authenticating data submitted in sustainability reports. By anchoring proof of action in an immutable chain, companies can prove that their efforts to reduce environmental impact are real.
This technology also helps to strengthen the reliability of environmental information, ensuring that each piece of data is traceable and tamper-proof. With solutions like KeeeX, companies can certify their data using digital fingerprints, providing enhanced security and total trust with stakeholders and regulators.
Digital Traceability Solutions for Environmental Reporting
The traceability of environmental data is a crucial issue to prove compliance with the European CSRD. Companies covered by the CSRD directive must be able to track the environmental impact of their products and services throughout their life cycle. To do this, they can rely on digital traceability solutions, which automate the collection of data and facilitate their integration into extra-financial reporting processes.
KeeeX offers tools to link sustainability data to financial and commercial documents, thus facilitating the creation of compliant and easily auditable reports. This allows companies to ensure the reliability of the information submitted while proving their efforts to reduce their environmental impact.
Case study: companies that successfully reduce their environmental impact
Examples of successful initiatives in the trade and logistics industry
In the logistics sector, some companies in France and Europe have adopted innovative strategies to reduce their carbon footprint while improving their economic performance. For example, some of them have optimized their supply chain by integrating eco-responsible solutions such as the use of electric vehicles for the transport of goods.
These initiatives have made it possible to reduce greenhouse gas emissions and improve the relevance of reporting processes. The collected data is then integrated into the extra-financial reports to demonstrate compliance with the CSRD directive.
How do these companies prove their impact reduction efforts?
The companies that have successfully demonstrated their sustainability efforts have relied on several technological tools. They have collected precise data on their emissions, optimized their industrial processes, and adopted technologies such as blockchain to anchor immutable proof.
These companies also use external audits to validate the quality and reliability of their sustainability reports, ensuring that the information submitted complies with the CSRD requirements on European soil and does not fall within the scope of greenwashing.
Results and benefits of CSRD compliance
In France, companies that comply with the sustainability objectives of the CSRD benefit from a better reputation among investors and consumers. Thanks to these CSR (Corporate Social Responsibility) actions, they manage to strengthen their image of sustainability and ethics, which translates into greater attractiveness on the financial markets. In addition, by reducing their carbon footprint, they achieve significant savings in energy consumption.
Thanks to the application of the European Sustainability Reporting Standards (ESRS), companies can better measure their environmental impact and prove that they meet the expectations of stakeholders in terms of sustainability. By demonstrating their commitment to complying with the European directive, they also improve the transparency of their social and environmental practices, thereby strengthening investor confidence.
Companies that adopt sustainable practices differentiate themselves from their competitors, attract responsible investments and consolidate their market position. By proving their environmental commitment, they also strengthen their governance and build a lasting relationship of trust with their stakeholders.
Large companies that comply with the CSRD not only obtain reputational benefits, but they also ensure their long-term growth by aligning themselves with the objectives of the CSRD Directive. Thanks to better governance, these companies meet the expectations of stakeholders and investors in terms of trust and sustainability.
Towards a more sustainable and responsible business thanks to the CSRD directive
Anticipate changes to be ready to prove your actions
The European CSRD directive poses a challenge in particular to large European companies, but it also offers many opportunities in the context of Corporate Social Responsibility (CSR). By anticipating changes and adopting technologies such as blockchain and digital certification, companies can not only prove their actions, but also improve their sustainability management.
Opportunities for companies that truly engage
Companies that are truly committed to reducing their environmental impact position themselves as leaders in their sector. By adopting responsible practices, they gain in competitiveness. These actions allow them to build a more sustainable future, both for themselves and for the planet.
By preparing companies for this new European Commission regulation, the CSRD helps build a solid framework for better environmental management. Companies that integrate CSR strategies can demonstrate their commitment to reducing their environmental impact, thereby creating an environment that is conducive to better ESG performance.