CSRD Consulting

Rethinking sustainability reporting

With the CSRD (the Corporate Sustainability Reporting Directive) the EU is breaking new ground in corporate reporting. In addition to financial information, the disclosure of non-financial data in annual reports is now mandatory. This means that both aspects will gradually be given equal importance, including through a review by auditors.

The new directive is intended to lead to transparency and comparability of companies’ ESG (environmental, social and governance) performance. It also aims to guide companies on their journey towards a decarbonised economy, highlighting opportunities for action and creating competitive advantage for actions already taken.

CSRD and ESRS – what are they?

The Corporate Sustainability Reporting Directive (CSRD) is an EU directive on sustainability reporting that has been in force since January 2023. It replaces the previous directive, the Non-Financial Reporting Directive (NFRD), and requires significantly more companies to disclose their ESG data.

This will increase the number of companies required to report from just under 12,000 to almost 50,000 in the EU. The new directive is accompanied by a prescribed reporting methodology – the European Sustainability Reporting Standards (ESRS). These have been developed by the European Financial Reporting Advisory Group (EFRAG) and are mandatory for all reporting companies.

The ESRS currently comprise twelve standards. The standards are divided into general standards and topical standards. The standards will be expanded to include sector standards in the coming years.

In addition to data disclosure, ESG-related actions, objectives and strategies are an important aspect of the ESRS. This is intended to drive the transformation towards a sustainable economy.

What is the double materiality assessment?

A very important element of the new reporting scheme is the double materiality assessment, which must be applied to each company at the beginning of the process. This assessment determines the specific content of the environmental, social and governance report.
The double materiality assessment requires companies to apply two perspectives:

«Impact materiality»
This looks at the company’s concrete impact on people and the environment (from the inside out)
«Financial materiality»
This looks at the sustainability opportunities and risks that affect the company from the outside, for example in the supply chain (from the outside in)

Which companies are affected?

The CSRD sets out the scope of reporting. Reporting obligations depend, among other things, on the size of the company. The user groups will be introduced in stages. The first companies to be affected are those already required to report under the NRFD. SMEs subject to the reporting requirements may be granted a deferral until 2028. The first reports will be published in 2025 by companies already subject to the NFRD for the 2024 financial year.

CSRD and ESRS – what does myclimate offer?

As a climate protection organisation with 20 years of experience behind us, we have long been supporting companies with the Science-Based Targets Initiative (SBTi), reduction paths, carbon footprinting and climate strategy. These issues also form an important part of the ESRS in area E1 Climate Change. Specifically, we offer the following services to help you meet your CSRD obligations:

Initial meeting and stocktaking: In a personal initial meeting, we determine together whether and when your company falls under the CSRD and which specific requirements are relevant for you. This enables us to address your specific needs and optimise the further process.
Navigating the CSRD and ESRS jungle: in a kick-off workshop, we’ll guide you through the directive and the requirements you’ll be facing. We’ll show you the tools and partners we work with, how we can help you produce a CSRD-compliant report, and how we can support you afterwards with measures and targets.
Double materiality assessment: together with our partners, we’ll carry out a double materiality assessment with you. As a result, you’ll receive a definitive overview of the material areas for your company that you will need to report on.
KPI definition and data point comparison: we’ll work with you to define relevant data points and key performance indicators (KPIs). We will prepare these for you so that they meet the ESRS requirements.
Data collection: from July, you can start collecting data in our newly developed myclimate EcoCloud sustainability software. This software is tailored to the requirements of the CSRD and was developed by experts in the field of ESG reporting and ESG data collection.
Reporting: our myclimate EcoCloud sustainability software will prepare your data so that you can create a CSRD-compliant report. This also serves as a basis for the continuous development of your company.