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The Corporate Sustainability Reporting Directive (CSRD) is bringing about major changes to how companies across Europe handle sustainability reporting.Ā
With over 1,100 data points to consider, a workload of an estimated 375 hours, and deadlines approaching fast, businesses must act quickly to ensure compliance and avoid potential penalties.Ā
In this blog post, weāll break down the current CSRD timeline and offer a clear, five-step CSRD roadmap to guide your company through the compliance processābefore itās too late.
The CSRD will roll out gradually based on a companyās size, revenue, and location. Here are the key dates to note down:
Now that youāve got the key dates in mind, letās walk through five steps to achieving CSRD compliance, from building your sustainability team to submitting your final report for auditing.
The first step to achieving CSRD compliance is building or expanding your sustainability team. Depending on your company size, this means hiring or training one or more professionals with specialized knowledge in sustainability reporting and compliance.Ā
This team will be responsible for managing the CSRD compliance process, ensuring all sustainability data is collected, assessed, and reported accurately.
Under the CSRD, sustainability reports must be verified by independent auditors to ensure data is accurate and reliable.
Finding an auditor familiar with the CSRD is essential, and Coolset can help. Alongside our platform, we give you access to a trusted network of vetted auditors. They can offer guidance and check-ins throughout the reporting process, ensuring your reporting is on track and compliant with the latest standards.
Not all topics under the European Sustainability Reporting Standards (ESRS) need to be included in your annual sustainability reportāonly those deemed āmaterialā to your business.Ā
Conducting a double materiality assessment is a mandatory step that helps you figure out which ESRS subtopics must be included. It ensures your reports focus on topics that are truly relevant, instead of topics that may align with a company's preferences or perceived importance.Ā
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Hereās how to conduct a double materiality assessment:
Start by compiling a comprehensive list of potential IROs through internal expertise and desk research. This list will serve as the foundation for your materiality assessment.
Validate the IROs by engaging key stakeholders through surveys, interviews, and workshops. Their input will help refine and prioritize the most significant issues.
Once validated, align each IRO with the appropriate ESRS sub-topics, ensuring that all relevant areas are covered.
Assess each IRO based on specific criteria. For impact, consider the scale, scope, irremediability and likelihood. For risks and opportunities, evaluate magnitude and likelihood. This scoring process helps to prioritize the most critical issues.
Set a threshold to identify which subtopics are material to your organization. This step is crucial as it determines what will be included in your final report.
For more guidance, download our free Double Materiality Assessment guide below.
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Start the data collection process for all material ESRS topics. This involves sending data requests to relevant departments, such as finance and HR, to compile the necessary information.
Ensure that you collect and report data on all material topics identified during your double materiality assessment.
In addition to the material topics, ESRS 2 data points, which cover broader reporting processes, must always be disclosed.
The next step involves clearly reporting how your double materiality assessment was conducted and which material matters emerged. While not mandatory, including a materiality matrix (shown below) can be a helpful tool to visually prioritize and clarify the significance of sustainability topics.
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Good to know: Coolsetās double materiality feature automates this entire process by helping you collect and score data from stakeholders, and visually summarize the results in a matrix for better decision-making and reporting.
Structure your report by first disclosing ESRS 2 data points, followed by the topical material ESRSs. This ensures that your report is organized and meets all CSRD requirements.
Given the CSRDās complexity and heavy workload, many proactive companies are preparing with a 'dry run' to assess their readiness to report in line with these new requirements. This can help to catch any potential compliance gaps and ensure your report is as strong as possible.
Once your report is finalized, share it with your auditor for review. They will ensure that it meets all CSRD standards and provide any necessary feedback.
For mid-market companies, getting your head around the CSRD can feel overwhelming. Thankfully, tools like Coolsetās sustainability and compliance software can make the process a whole lot more manageable.Ā
Coolset streamlines everything aboveāfrom data collection to reporting and auditingāensuring your company meets the CSRDās detailed requirements with ease.
Developed in collaboration with regulators and auditors, Coolset's CSRD compliance module is designed specifically for mid-market businesses and includes several key features:
Kick-start your compliance journey by booking a free personalized demo with one of Coolsetās climate experts today.
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Download our free guide written by our sustainability research team
Speak to one of our sustainability experts