EU: CSRD, a tall order for HR departments

The Corporate Sustainability Reporting Directive (CSRD) is set to become the new standard for non-financial reporting at European level. Soon to be applied to 50,000 European companies, it should help combat greenwashing and socialwashing, and encourage more virtuous practices. However, it will require companies, and HR departments in particular, to do a great deal of data collection and publication. Are they ready for this added burden?

Key points

Unprecedented volume of data to be collected and published for all companies
concerned, including social data

Scope will depend on transposition, determination of companies and future sectoral
standards

Progress expected thanks to easier access to data and obligation to publish action
plans

On July 31, the European Commission published the delegated act related to the CSRD. It details the list of sustainability reporting standards (ESRS) on environmental, social and governance (ESG) criteria to be published by companies with over 250 employees and turnover above €40 million. This long-awaited document, which has been the subject of bitter discussions under pressure from NGOs on the one hand and employers’ organisations on the other, is the result of a directive adopted in January. This will enable the application of the “double materiality” principle, which will require analysis of the environmental and social impact of a company’s activities on society and, conversely, of the impact of the social and environmental context on the company. The new standard replaces the NFRD, the previous non-financial reporting directive adopted in 2014, which was deemed to be ineffective due to the absence of clear standards set at EU level, and which only applied to 11,000 companies.

The CSRD, a regulatory mechanism yet to be finalised

The text will come into force on January 1,…

Antoine Piel

CSRD

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