Climate protection is known to be an important and widespread issue that has a significant impact on our economy. Corporate sustainability reporting is nothing new. Certain companies of public interest in the EU have been required to report on their sustainability for several years now. This is regulated by the Non-Financial Reporting Directive (NFRD), which has been in force since 2014.
This reporting obligation is now being significantly expanded by the Corporate Sustainability Reporting Directive (CSRD), which came into force on January 5, 2023. The new regulations must be implemented by member states 18 months later.
This affects all companies with at least 250 employees, as well as large companies in the accounting sense and small and medium-sized enterprises (SMEs) that are capital market-oriented.
The aim of the CSRD is to close existing gaps in sustainability reporting and to expand it overall. There is a particular focus on preventing greenwashing, i.e., companies attempting to gain a sustainable image without providing evidence to support this image.
In the future, companies will have to report more comprehensively and according to more uniform standards. Greater quantification of reporting content by means of key figures is also intended to improve the measurability and comparability of the information provided. Initial drafts of the standards, which are still to be adopted by the EU Commission, are currently being developed. Existing standards and regulations are to be incorporated into these drafts.
The CSRD establishes the principle of double materiality. According to this principle, companies are required to report both on the impact of their own business operations on people and the environment and on the impact of sustainability aspects on the company.
In future, sustainability reporting will have to be audited externally in the same way as financial reporting. The EU Commission is setting audit standards for this purpose. In addition, the depth of the audit is to be gradually expanded: in a first step, an audit with limited assurance is planned. After that, an audit with reasonable assurance will be required, which corresponds to the depth of the audit in the context of financial reporting.
In order to facilitate access to sustainability information, this will be a mandatory part of the management report in future. This demonstrates the high importance of sustainability reporting, which is gradually assuming the same status as financial reporting.
Since January 1, 2020, certain capital market-oriented companies have been required to disclose their accounting documents in the European Single Electronic Format (ESEF), which is readable by both humans and machines. Under the CSRD, this requirement is to be extended to sustainability reporting.
SAP has already developed a solution for CO2 accounting. SAP Sustainability Footprint Management is based on the Business Technology Platform and can be seamlessly integrated into SAP Business One. The SAP solution provides the CO2 balance sheet for individual products, creates clear graphics, and sorts your data according to various criteria. This gives you a direct overview of where the largest CO2 emissions occur in your production chain. As a result, weak points in production become immediately apparent and can be specifically addressed. In addition, the data helps to improve the eco-efficiency of the company and reduce resource consumption.
The decision has been made, and the clock is ticking. The deadline is July 5, 2025, by which time all affected companies must have adapted their reporting to comply with the CSRD guidelines. The exact key figures relevant for this are still being determined, but some companies are already in the midst of lengthy preparations.
The UNIORG Group is also eagerly awaiting developments regarding the CSRD. As your partner, we will keep you up to date with any new information and solutions for these new guidelines. Otherwise, we are happy to assist you if you have any questions or concerns.
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