On Tuesday 12 November, for the third year in a row, we brought together sustainability managers for an inspiring afternoon of knowledge-sharing on the Corporate Sustainability Reporting Directive (CSRD) and sustainability reporting. The central theme this year: How should you deal with the CSRD pragmatically? We summarize the key insights for you.
Climate change and CO2e reduction should emerge as a priority from any double materiality analysis. There are numerous drivers for making climate action a priority of your sustainability strategy and report. Firstly, there is the social cost: the economic losses in Business As Usual (BAU) are many times higher than if we manage to limit warming to 1.5°C. As a company, you may already be facing the (financial) consequences of extreme weather events today; if not, there is a good chance that this will happen in the future.
Through various legislations, Europe is pushing for climate action. The CSRD makes the ESRS E1 climate standard mandatory for all large European companies; the CSDDD requires a climate transition plan for companies with an annual turnover of €150 million or more. Important stakeholders of your company also demand that you take effective action on climate: major customers, your competitors (indirectly), investors, talent on the job market, etc.
Our advice: make CO2e reduction thecore of your ESG strategy, and additionally focus on other themes that arematerial and distinctive for your company.
The ESG roadmap we developed for tomato producer Den Berk Délice is based on the company’s double materiality analysis, from which climate and CO2 emerged as material topics. Based on the roadmap, we wrote a distinctive sustainable narrative, which we poured into an eloquent brochure.
Taking action on sustainability is more important than mere reporting, but reporting is indeed essential for targeted action: What gets measured gets done. Transparency isn’t considered the CSRD’s secret ingredient for nothing.
Past compliance: why reporting pays off in the long run
Implementing and reporting on ESG: this is a challenge that should not be underestimated nor solely limited to the sustainability manager or team. If you want to take effective steps, it will be important to involve people from all departments and levels of your company: finance, HR, sales, IT, purchasing, and more besides. Pantarein adopts principles from behavioural psychology here: onboarding, changing, anchoring. Everything starts with establishing clear ESG governance.
Four key points for effective ESG governance:
With this approach, we made the difference at Vandemoortele, which is reflected in our long-standing partnership with the food company.
As ESG reporting becomes increasingly important, (un)conscious greenwashing is also on the rise. With the Green Directives, the European Union aims to put a stop to vague and opaque sustainability claims. For example, the Green Claims Directive, the best-known directive, prohibits claims such as ‘carbon neutral’ or ‘net zero emissions’ based on CO2 offsets.There will also be a European database of authorized sustainabilitycertificates.
Do not be put off by regulations. The EU does not want companies to conceal their sustainable initiatives, it wants to protect consumers. Our advice: tell an honest, substantiated story. In your communication, focus on the themes that have emerged as the most important for your company in the double materiality analysis. And provide factual substantiation through your sustainability report.
Becoming climate-neutral is not something you do alone. Collaboration within your company and across your value chain is essential.
Some examples:
CO2e-footprint: Often, a company’s own direct and indirect emissions (i.e. scope 1 and 2) only represent a small part of total emissions, with emissions in the value chain (scope 3) making up the largest share. Including your suppliers in your own climate transition is crucial if you want to reduce your emissions.
Has your company’s carbon footprint yetto be determined? Our CO2e experts will help you calculate it anddevelop your climate transition plan.
International CSR: Legislation such as the CSDDD emphasizes the importance of working with business partners to make your value chain sustainable in an international context, too. Detecting and addressing the most critical risks can only be achieved by engaging in dialogue with suppliers and other players in the chain.
These tips will help you implement the CSRD effectively in your organization. Need help or a sounding board? Our experts are ready to support you. Contact us at mail@pantarein.be.
