If there’s one thing sustainability-minded organisations will never cut back on, it’s their use of acronyms. In 2023, no self-respecting sustainability communication is complete without a generous sprinkling of CO2, GHG, UN SDGs, EVs, EU ETS and GRI, to name but a few. And, of course, the mother of all three-letter sustainability terms: ESG.
Shrinking wordy concepts like environmental, social and governance into digestible, bite-sized chunks saves time – whether it’s drafting your annual report or educating stakeholders about your net-zero ambitions. After all, time is a finite resource: every six weeks that passes, another 1% of the current decade is gone, leaving less of a window to keep 1.5°C alive.
Gearing up for the long haul
The EU’s forthcoming Corporate Sustainability Reporting Directive (mercifully “CSRD” for short) will be born into this climate of urgency. While the first wave of public-interest companies effectively have until early 2025 to present their first CSRD-compliant report to the world, many are already taking steps to align with the all-important European Sustainability Reporting Standards (ESRS).
By most estimates, the time required to achieve CSRD readiness will be at least 18 months. Less high-profile companies may have more time to play with, but most are starting from a lower baseline. On the other hand, firms with fewer than 750 employees are likely to face less scrutiny in the early years of CSRD.
Living in a materiality world
Then there’s the issue of materiality. Many ESRS topics – and the corresponding disclosure requirements and data points – will be material to a manufacturer with operations, employees and investments spread across the globe. In contrast, a software provider with, say, 250 employees, no physical products and limited exposure to emerging markets may find they have relatively few disclosure requirements.
It follows that you can’t start taking concrete steps to comply with the CSRD without first determining what is and isn’t material to your business and its stakeholders. And this needs to be done through the so-called “double” lens of financial and impact materiality. A robust materiality assessment, followed by a thorough gap analysis, is, therefore, a no-brainer for any company, large or small, that wants to develop its CSRD readiness.
As the saying goes, “many hands make light work”, and arguably the most important action you can take today is to start building your CSRD team – whether that’s by sourcing the right skills internally or working with a reliable reporting partner. If you need help with the latter, give us a call. We promise to keep it brief.
Browse a selection of our ESG and sustainability reporting work here.