Background
Since 2017 in France, retail companies are subject to Declarations of Extra-Financial Performance (DEFP), a subset of the 2014 European Directive (NFRD). This obligation for extra-financial reporting integrated into a management report applies to listed companies (exceeding €40 million in sales and 500 staff) and unlisted companies (€100 million in sales and more than 500 staff).
However, these DEFPs leave companies free to select a reporting methodology. They can, for example, display reductions in carbon consumption on variable bases (relative to 2018 for some, relative to 2020 for others).
Faced with vague rules, bankers and investment funds promoted the Corporate Sustainability Reporting Directive (CSRD). This requires companies to have the same level of auditability in extra-financial reporting as in financial reporting.
The aim is to harmonise declarations between the various players and to provide a normative framework for comparison. It will be applied according to the following timetable:
–January 1, 2025 : the first wave concerns listed groups with over 500 employees and sales exceeding €40 million (or €20 million in total assets), which close their financial year on December 31. Most of these groups began work on this subject in the spring of 2023: their first CSRD report will incorporate data for the year that began on January 1, 2024.
–From 2027, CSRD will apply to all European companies with sales of over €50 million, assets of over €50 million and/or 250 staff (those meeting 2 out of 3 conditions will be subject to CSRD).
–From 2028, it will also apply to all non-European companies generating more than €150 million in sales within the E.U.
This non-financial reporting is governed by CSRD standards, which define 1,178 data points that companies must follow in order to produce their CSRD report. This regulation goes far beyond what has been done until now. It covers not only carbon footprint data (scope 1, 2 and 3), but also water consumption, social, HR and governance data. According to Julie Ravillon, Global CSR and Sustainability Leader at Salesforce, “For companies, CSRD is an opportunity to have a complete view of data. As this data is currently fragmented, siloed between different teams, they need help in automating data collection, in transforming this data into a carbon footprint, and in monitoring their action plans”.
This process involves three stages:
–Step 1: the double materiality analysis, which represents around 2/3 of the work. This stage is carried out without technological support, in order to carry out an impact analysis. Guillaume Bossé, CEO of Inetum Consulting France, estimates a duration of between 4 and 12 weeks.
–Step 2: gap analysis.
