The Corporate Sustainability Reporting Directive (CSRD) is a response to the climate change objectives outlined in the European Green Deal, aiming to improve the disclosure of climate and environmental data by companies.
Scope and Timeline:
- Member states, including Ireland, have until mid-2024 to implement the directive.
- Mandatory reporting requirements will begin for:
- Public interest entities with over 500 employees from January 1, 2024.
- Larger companies and public interest entities with over 250 employees from January 1, 2025.
- Listed SMEs from January 1, 2026, with an option to opt out until 2028.
- Reporting will be based on double materiality, meaning companies must disclose risks from climate change and other ESG matters, as well as their impact on climate and society.
Government Support:
- While non-listed SMEs aren't directly covered, they may need to provide information to larger companies in their value chain.
- Businesses can utilize government supports like the Green Transition Fund and Climate Toolkit 4 Business to prepare for reporting.
- Discussions with accountants, auditors, and large companies in the value chain are encouraged for preparation.
Reporting Standards:
- CSRD introduces 12 mandatory reporting standards developed by EFRAG, covering environmental, social, and governance aspects.
- The European Commission has adopted these standards with revisions for proportionality and usability.
What You Can Do Now:
- Assess if your company falls within the directive's scope.
- Evaluate your current sustainability reporting processes, internal controls, and governance.
- If reporting is due in 2024, discuss the directive and standards with your auditor or accountant.
- Stay updated on developments by signing up for the Department of Enterprise, Trade and Employment’s mailing list.
- Initiate conversations with large companies in your value chain to understand potential reporting obligations.
- Assess your ability to gather required data, whether as a reporting company or within a larger company's value chain.
