In November 2022, the European Union introduced legislation for sustainability reporting, the CSRD, Corporate Sustainability Reporting Directive. This means that more than 1,000 companies in the Netherlands must now prepare for this. In the beginning, this legislation only applies to large companies, but smaller companies also have to deal with it in their role as supplier or customer. What can companies do now to prepare for this legislation?

Sustainable reporting by companies: CSRD
The Green Deal is a series of measures to make Europe climate neutral by 2050. Companies must contribute to this. To stimulate this, the Corporate Sustainability Reporting Directive (CSRD) was adopted in November 2022. This is based on ESG. ESG stands for Environmental, Social and Governance. It is about the activities of companies that have an impact on society and the environment. This is important because businesses have a major impact on the world around us. The aim of this directive is that non-financial information becomes just as important as financial information. Large companies must report on their ESG performance from 2024.

This means that companies must provide information not only about how they operate (ESRS 1 and 2), but also about their environmental impact (5 guidelines), social performance (4 guidelines) and good governance (1 guideline). This sustainability information includes the corporate strategy, sustainability strategy, business model, policy, action plans, targets and benchmarks. This requires intensive cooperation within the company.

In practice, large listed companies will have to report first and have their business model externally validated to show how their activities impact sustainability and how external factors such as climate change or human rights issues affect their business.

CSRD consequences
But even if your company does not fall directly under the CSRD, it is wise to prepare. Firstly, because companies that fall under the CSRD are already taking a critical look at cooperation partners in the chain. For example, if they want to be CO2 neutral, they ask suppliers what measures they are taking to make them more sustainable. Second, companies that are already taking steps in the field of corporate social responsibility and are transparent about their impact are more reliable and attractive to customers, investors and employees.

There is no one-size-fits-all approach for companies looking to implement ESG values. Some companies find their motivation from within, while others are encouraged by regulation. The most important thing is that the ESG values ​​are taken seriously internally and proactive steps are taken that everyone in the company can contribute to.

Do you want to know how you can start your company and involve your employees? By establishing a growth culture together, you can continue to grow sustainably with your organization. Grooblue uses the Harvard Growth Culture model as the basis for this approach. If you would like guidance in these steps, please contact us.