Support for CSRD compliance
The Corporate Sustainability Reporting Directive (CSRD) is a European Union regulatory initiative aimed at strengthen and standardize sustainability reporting by companies.
Replacing the Non-Financial Reporting Directive (NFRD), the CSRD imposes stricter requirements on the transparency and quality of reporting on environmental, social and governance (ESG) performance.
Companies concerned by CSRD
The Corporate Sustainability Reporting Directive (CSRD) significantly extends the scope of application compared to the previous Non-Financial Reporting Directive (NFRD). The CSRD aims to include a greater number of companies in Europe, with precise criteria for determining which companies are required to comply with the new sustainability reporting requirements. Here is a detailed overview of the companies concerned:
Financial Entities
Financial institutions, such as banks and insurance companies, are also required to comply with the CSRD. These entities play a crucial role in financing the transition to a sustainable economy, and are therefore subject to detailed reporting requirements.
Large Companies
The CSRD applies to companies that exceed at least two of the three criteria following :
- 250 employees or more
- 40 million euros or more in net annual sales
- 20 million euros or more in total assets
These criteria are more inclusive than those of the NFRD, thus increasing the number of companies required to comply with the CSRD.
Listed SMEs
Small and medium-sized enterprises (SMEs) listed on EU regulated markets are also covered by the CSRD. This includes all SMEs that are publicly listed, regardless of their sector of activity.
Temporary exemptions :
For listed SMEs, there is a transition period and temporary exemptions to allow them to adapt to the new requirements. This transition phase offers a little more time for compliance, recognizing the limited resources these companies often have.
Unlisted companies and the public sector
Although the CSRD focuses primarily on listed and large companies, some large unlisted companies may also be concerned, particularly those that are systemically important or have a significant impact on the environment and society.
Some public companies may also be included, particularly if they are considered to have a significant impact on the economy, the environment or society. However, the specific criteria for inclusion may vary, and require assessment on a case-by-case basis.
Non-European Group subsidiaries
The CSRD also applies to subsidiaries of non-European groups if they meet certain EU activity thresholds. These thresholds include financial and operational criteria similar to those applied to European companies.
Specific criteria
Subsidiaries of non-European groups must comply with the CSRD if they :
- Generate EU sales in excess of 150 million euros
- Have a legal entity in the EU that exceeds the large enterprise thresholds defined above
Background and origin of CSRD
The importance of sustainability in business activities has grown considerably in recent years. Investors, consumers, regulators and other stakeholders are increasingly demanding transparency on companies' sustainable practices. CSRD is a response to these growing expectations, aimed at harmonizing ESG reporting standards and ensuring that the information disclosed is reliable, comparable and relevant.
The CSRD is part of the European Green Deal and the EU's sustainable finance strategy. It was proposed by the European Commission in April 2021 and adopted in April 2022. The directive applies to large companies as well as certain listed SMEs, extending the scope compared with the NFRD.
CSRD requirements
1.
Extended scope of application
CSRD applies to a wider range of companies, including :
Large companies: those exceeding two of the following three criteria: 250 employees, sales of €40 million, assets of €20 million.
SMEs listed on EU regulated markets.
Subsidiaries of non-European groups if they meet certain EU activity thresholds.
2.
European Reporting Standards (ESRS)
Companies must use the European Sustainability Reporting Standards (ESRS), drawn up by the European Financial Reporting Advisory Group (EFRAG). These standards cover various ESG aspects and are designed to ensure consistent and comparable reporting.
3.
External insurance
Published information must be verified by an external auditor, adding a layer of credibility and reliability to the reports.
4.
Double Materiality
Companies must assess and report not only on how their activities impact the environment and society (environmental and social materiality), but also on how ESG issues influence their financial performance (financial materiality).
5.
Digital Reports
Reports are to be published in digital format and included in the European Sustainability Register, facilitating data access and comparability.
CSRD implementation with Phishia
As a consulting firm specializing in sustainability and cybersecurity, Phishia is ideally positioned to help companies comply with the Corporate Sustainability Reporting Directive (CSRD). Our expertise and comprehensive services enable companies to meet stringent CSRD requirements while optimizing their environmental, social and governance performance (ESG).
Analysis of Current Practices
Phishia begins with a comprehensive assessment of the company's current ESG reporting practices.
- A review of existing reports.
- An assessment of data collection systems.
- Identification of deviations from CSRD requirements.
Personal Diagnosis
We provide a detailed diagnostic that highlights areas for improvement and proposes specific recommendations to close the gaps identified.
Implementation of Data Management Systems
Phishia helps set up or improve ESG data management systems to ensure efficient collection and management of the required information.
- Selection and installation of suitable software.
- Automation of data collection and reporting processes.
- Staff training in the use of these systems.
Defining Performance Indicators
We help define and implement Key Performance Indicators (KPIs) in line with the European Sustainability Reporting Standards (ESRS). These indicators enable ESG performance to be monitored and measured in a consistent and transparent way.
Training Programs
Phishia offers customized training programs to educate and train employees at all levels of the organization on the new CSRD requirements. Training courses cover :
- CSRD principles
- ESG data collection and analysis methodologies
- Best practices in reporting
Raising Parties' awareness Prenants
We also organize awareness-raising sessions for internal and external stakeholders to ensure a clear understanding of the objectives and benefits of CSRD compliance.
Audit preparation
Phishia helps companies prepare their ESG reports for external audit. This includes:
- Internal data verification
- Preparing the necessary documentation
- Coordination with external auditors
Continuous Assistance
We provide ongoing support during the audit process to answer auditors' questions and ensure that all aspects of ESG reporting comply with CSRD requirements.
Report writing and presentation
Phishia assists with the drafting and presentation of ESG reports in line with ESRS standards. We ensure that reports are clear, complete and accessible, and that they meet the expectations of regulators and stakeholders.
Strategic Communication
We also help develop a communications strategy to share the results of ESG reporting with key stakeholders. This includes:
- Preparation of communication documents.
- Planning meetings and presentations.
- Managing communication on digital platforms and social networks.
Impact on businesses
Strengthening Governance and Internal Processes
Companies will need to strengthen their internal ESG data collection and management processes to meet the new requirements. This often means investing in additional information systems and human resources.
Transparency and accountability
Increased transparency requirements are encouraging companies to adopt more responsible and sustainable business practices. This can enhance their reputation and attractiveness to sustainability-minded investors.
Financial Risks and Opportunities
Greater transparency on ESG risks enables more proactive management of the associated financial risks, while identifying opportunities for sustainable investment and innovation.
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