CSRD and European companies: impact and challenges
Since January 1, 2024, the European CSRD directive (Corporate Sustainability Reporting Directive) requires companies to publish sustainability reports. It succeeds the NFRD guideline (Non-Financial Reporting Directive) whose scope it broadens, and introduces more stringent and detailed standards.
The requirements of the CSRD on business management
By extending the scope of application compared to the previous directives, the CSRD marks a substantial increase in the number of businesses subject to its obligations. Its gradual entry into force in 2024 concerns companies with more than 500 employees, and will extend in 2025 to companies with more than 250 employees, then to SMEs listed on the stock exchange in 2026.
While sustainability reports must be drawn up every year at the end of the accounting year, they have an impact on company management and governance:
- Control and certification : reports must be verified and certified by an independent third party organization in order to ensure their veracity.
- Standards and disclosure : Businesses must comply with disclosure requirements and meet defined standards to harmonize sustainability reporting.
- Publication : financial and extra-financial data are published on the European digital platform ESAP, thus promoting transparency and comparability between companies.
- Penalties : companies are subject to financial sanctions, even criminal sanctions for managers, in case of lack of reporting or certification, and obstacles to certification.
ESRS standards and sustainability reporting data
Businesses affected by the CSRD directive must produce information in order to highlight their ESG impact (Environmental, Social and Governance) linked to their activity. In order to harmonize and improve the quality of this information, the CSRD defines ESRS standards (European Sustainability Reporting Standards).
Each standard specifies what information businesses should disclose, including quantitative and qualitative indicators:
- environmental data : climate change, pollution, biodiversity...
- social data : workforce, working conditions, customers and end users...
- governance data : business conduct, lobbying activities...
The sustainability reporting thus raises the standards of transparency and corporate responsibility, encourages sustainable practices and growth, as well as the achievement of the objectives of the European Green Deal. But it poses serious challenges for them due to the complexity of the data published and the difficulty in certifying it despite ESRS standards.
QHSE software, a sustainability reporting solution
Through the ESRS standards, the CSRD directive introduces over a thousand data points to be collected, analyzed, and continuously updated as part of sustainability reporting. And despite the standardization and harmonization of this data, companies must report on information and indicators that are sometimes difficult to measure, qualify, quantify or verify.
Facilitate the publication of your sustainability information
In this context, the QHSE software (Quality, Health, Safety, Environment) have a role to play in how businesses can comply with the CSRD, produce compliant reports, facilitate their certification, and assume their CSR (corporate social responsibility).
By nature, QHSE management software offers benefits that are commensurate with the challenges posed by CSRD, allowing you to:
- Simplifying data collection and tracking : thanks to their ability to centralize and organize data, they facilitate the collection and monitoring of the information required for sustainability reporting. They allow businesses to bring together data from a variety of sources into a unified system, making the reporting process more efficient and less prone to errors.
- Ensure compliance and improve your ESG performance : their reporting functionalities allow the company to comply with the requirements of the CSRD directive, by generating reports in accordance with ESRS standards, while providing analyses and insights to identify optimization levers and positively improve your ESG impact.
- Facilitate audit and validation by third parties : they facilitate audit and validation processes by independent third party organizations, by ensuring the updating, clarity, integrity and accessibility of the data and information reported.
Serving your company's ESG responsibility
QSHE software is thus perfectly adapted to support the social responsibility approach businesses. While automating data collection and simplifying sustainability reporting, they are in a position to boost your company's social responsibility and enable it to:
- facilitate the communication, awareness-raising and training of your teams on ESG issues, for each function of the company;
- align sustainability goals with the company's daily operational practices, as well ESG only in terms of health, safety and well-being;
- support the responsible use of resources, sustainable growth, and the management of waste and emissions, in order to limit your ESG impact ;
- stimulate engagement and innovation, strengthen the brand image and the reputation of your company among its customers and partners.
THEentry into force of the CSRD is a turning point for European companies, requiring a thorough review of reporting systems and a greater integration of ESG considerations into their overall strategy. By facilitating the management of data and processes related to sustainability, QHSE software is a valuable ally in taking environmental, social and governance responsibilities.
In this respect, discover our Symalean QHSE and CSR software, contact our team to align your company's QHSE and CSR management with its ESG goals.
