In this article, we will guide you through the key ESG topics covered by the CSRD, helping your organization understand what needs to be reported and why it is crucial for your business.
Understanding ESG in the Context of CSRD
The CSRD expands the scope of sustainability reporting beyond financial metrics, requiring companies to provide detailed disclosures on a wide range of ESG topics. These topics are crucial for stakeholders who are increasingly interested in how companies contribute to sustainable development and manage ESG risks.
Key ESG Topics Covered by CSRD
You will find in this document the following content:
the detailed list of all ESG topics covered by ESG reporting
the description of relevant roles and functions within your organization that may/should be in charge of those topics
1. Environmental Topics
The environmental section of the CSRD focuses on how your company’s operations impact the planet. The key topics include:
Climate Change: Reporting on greenhouse gas emissions, climate risks, and your company’s strategy to mitigate climate impact.
Resource Use: Disclosure on the use of natural resources such as water, energy, and raw materials, and the efficiency of their use.
Biodiversity: Impact of your company’s operations on ecosystems and biodiversity, including land use and conservation efforts.
Pollution and Waste: Information on waste management practices, pollution control, and reduction initiatives.
2. Social Topics
Social topics in the CSRD revolve around how your company interacts with employees, communities, and other stakeholders. The main areas to cover include:
Employee Welfare: Reporting on labor practices, including working conditions, employee health and safety, and diversity and inclusion.
Human Rights: Your company’s policies and practices concerning human rights, including due diligence processes to prevent violations.
Community Engagement: How your company contributes to the communities in which it operates, including social investments and impact assessments.
Customer Responsibility: Practices related to product safety, data privacy, and ethical marketing.
3. Governance Topics
Governance topics focus on how your company is managed, including decision-making processes and ethical standards. Key areas include:
Corporate Governance: Structure and functioning of the board of directors, executive compensation, and shareholder rights.
Ethical Conduct: Anti-corruption measures, compliance with laws and regulations, and ethical business practices.
Risk Management: How your company identifies, assesses, and manages ESG-related risks.
Transparency and Reporting: Quality and transparency of your sustainability disclosures, including accuracy, timeliness, and completeness.
Don't forget that the scope of datapoints to be covered in your final reporting depends on the double materiality analysis outputs!
Why is it important to care about ESG topics at the beginning of the project?
Due to the great variety and wideness of the topics to be considered, you need to understand from the beginning who is responsible or specialist about the different items, so you build your ESG taskforce and kick the project off with everyone.
Don't forget that in a reporting initiative such as CSRD, you will have to distribute the data collection and validation efforts across the whole organization.
In case you struggle to assign certain topics to the relevant stakeholder, contact our ESG support team through the platform chatbot!