Introduction
The Corporate Sustainability Reporting Directive (CSRD) is a significant development in corporate governance, requiring businesses to enhance their transparency and accountability regarding environmental, social, and governance (ESG) matters. As sustainability becomes a pivotal factor in business success and regulatory compliance, understanding the CSRD process is crucial for companies.
This article will guide you through the main steps of Greenly’s CSRD offer, explaining the workflow and requirements at each stage.
1. Setting a Proper Governance for ESG Reporting
Define your Governance Structure
Establishing a robust governance structure is the foundation of effective ESG reporting. This involves aligning the reporting targets with the company's objectives and available resources. The governance framework should include the following elements:
Clear Vision and Objectives: Define the company’s ambition regarding sustainability, ensuring alignment with regulatory requirements and stakeholder expectations.
Resource Allocation: Assign tools, processes, and personnel to manage the ESG reporting tasks efficiently.
Stakeholder Engagement: Involve all relevant stakeholders, including employees, suppliers, and customers, to gather comprehensive data and ensure buy-in.
Engage Key Internal Stakeholders
Effective governance requires the involvement of key stakeholders, including:
Executive Committee: Provides oversight and strategic direction.
ESG Department: Manages the ESG strategy and reporting process.
Data Owner: Responsible for decision-making and resource allocation.
Data Contributor: Specialist in the area, ensures accuracy and compliance with standards.
2. Preparation of Reporting Perimeter
Defining the Reporting Perimeter
Defining the reporting perimeter involves mapping the company's activities and ecosystem to identify all relevant ESG touchpoints. This step includes:
Operations Description: Document the company's core and support activities.
Sector Specifics: Consider industry-specific ESG matters.
Geographical Scope: Define the reporting boundaries to include all departments and regions, ensuring comprehensive ESG impact coverage and CSRD compliance.
Get Insights from your Current ESG Strategy
Review existing ESG initiatives and assess their maturity to gain a clear understanding of their impact and effectiveness. This analysis helps pinpoint areas of strength and opportunities for improvement in alignment with overall sustainability goals.
Engage Expertise
For expert guidance on smoothly advancing your CSRD initiative, please contact your ESG specialist.
3. Filling in the Double Materiality Forms
Understanding Double Materiality
Double materiality is a core principle of the CSRD, requiring companies to assess both the impact of their activities on the environment and society (impact materiality) and how these factors affect their financial performance (financial materiality).
Filling Out the Forms
Greenly’s platform facilitates the double materiality assessment through structured forms, each addressing different ESG topics. The forms should be completed by internal contributors with relevant knowledge. Key steps include:
Collaboration: Engage multiple departments (e.g., HR, operations, finance) to provide comprehensive inputs.
High-Level Information: At this step, only qualitative and high-level information is required.
4. Validation of Double Materiality Analysis
Scoring and Validation
Once the forms are completed, Greenly’s scoring system, compliant with EFRAG recommendations, evaluates the responses to create a double materiality matrix. This matrix helps identify the most material ESG topics, which must be validated by the main company stakeholders and the board of directors.
5. High-level Gap Analysis
Conduct a high-level gap analysis to identify existing and missing data sources and to prioritize data collection efforts. This analysis helps:
Identify existing data sources (GHG assessment, HR data, Customer feedback, etc.)
Target data collection: Focus on areas where data is readily available or most needed.
6. Data Collection of all Material ESRS Datapoints
Comprehensive Data Collection
Collect data for all material European Sustainability Reporting Standards (ESRS) datapoints, ensuring compliance with CSRD requirements. This step involves:
Proof Management System: Gather supporting documents to meet audit requirements.
Project Management: Assign data collection tasks to ensure accountability.
7. Datapoint-Level Gap Analysis and ESG Initiatives Roadmap
Building the Roadmap
After data collection, perform a detailed gap analysis at the datapoint level to identify areas for improvement. This analysis informs the development of an ESG initiatives roadmap, outlining:
ESG Initiatives: New and ongoing projects to address identified gaps.
Timeline and Responsibilities: Clear deadlines and assigned responsibilities for each initiative.
8. CSRD Sustainability Report
Crafting the Final Report
Once all the preparatory stages have been completed, the final step is to compile and present the CSRD Sustainability Report. This comprehensive document is vital for stakeholders to understand the company’s sustainability practices and impacts fully. The CSRD Sustainability Report not only fulfills European regulatory requirements but also serves as a tool for improving corporate transparency and building trust with stakeholders. By effectively communicating its sustainability performance, the company can strengthen its reputation and competitive edge in a sustainability-conscious market.
Conclusion
Greenly simplifies the CSRD process by providing a structured and comprehensive approach to ESG reporting. By following the steps outlined in this article, companies can ensure compliance, enhance transparency, and build a sustainable future. Reach out to Greenly for expert support and guidance in your CSRD journey.