The European Commission is continuing along its green course and opening a new chapter in sustainability reporting. In April 2021, it proposed a Corporate Sustainability Reporting Directive (CSRD) to replace the existing Non-Financial Reporting Directive (NFRD) adopted in 2014.
On November 10, 2022, the CSRD draft has now been approved by a large majority in the European Parliament. The European Council gave its approval on November 28, 2022. The directive is thus adopted and will take effect 20 days after its publication in the Official Journal. It is now official that companies, banks, and insurance companies will face some changes regarding sustainable reporting.
Don’t delay getting ESG-ready
The path to compliant ESG reporting isn’t a sprint, but instead more of a steeplechase that demands a lot of preparation and stamina. That means: the sooner you start, the better.
The regulations were originally meant to apply as early as January 1, 2024, for the 2023 fiscal year. However, the European Council and the European Parliament want to delay their introduction by a year. Despite this grace period, you shouldn’t take your eyes off the finish line. Here’s a reminder of the applicable reporting periods and publishing dates:
In order to become effective for companies, the CSRD must now be transposed into national law on an EU level within 18 months following its adoption on November 28, 2022.
Implementing the CSRD can’t be that hard, right?
In theory, ESG reporting might sound straightforward, but adhering to the regulations is actually complex. The updated rules don’t just present a time-consuming technical challenge, but they are also intended to create transparency, meaning that companies will have to gain a comprehensive overview of the impact of ESG on their own business (outside-in perspective) and the impact of their own business actions on people and the environment (inside-out perspective). For the purposes of the derived strategy, measures must then be defined and implemented, the success of which is to be measured using relevant KPIs. So, there’s a lot to do.
Successfully reporting on sustainability
With all that in mind, how should you best approach the matter so that your company crosses the finish line in time and publishes a compliant report by the deadline?
Like in many other scenarios, a checklist is the way forward:
Determine your current status, document your target status, and define processes to reach your goals – in other words, how can you move from your current status to your target status?
Create the perfect sustainability report step by step:
How LucaNet can lend you a helping hand
We have the solution to prepare your company for sustainability reporting in next to no time. That’s because LucaNet is already ESG-ready!
Whether EU taxonomy mapping, indicator calculation, performance analysis, or reporting – our software for integrated financial and ESG reporting gives you complete control and transparency over your sustainability data. ESG data and metrics are automatically imported from source systems and clearly managed in one central location.
Explore LucaNet and see for yourself how it makes consolidated annual reports reliable, automated, and quick – including a management report and incorporated sustainability report. Better yet, it converts your ESG reports into the required iXBRL format. Our long-standing expertise in creating auditable financial reports makes us your ideal partner.
If you want to learn more about sustainability reporting, what regulations you need to comply with, and how to put everything into practice, then don’t miss “The ABC of sustainability reporting”, one of our many articles on the topic.
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