What forms do CSRD-compliant reports take?
Summary
CSRD-compliant reports are essential documents developed by companies to disclose their financial and non-financial performance, thereby promoting transparency and commitment to environmental sustainability.
Structured according to CSRD guidelines, they cover various aspects, including environmental, social and governance (ESG).
These reports follow recognized ESG reporting standards, ensuring compliance. They are also externally audited for accuracy and transparency, reinforcing stakeholder confidence.
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Introduction
Reports in line with the Corporate Social Responsibility Directive (CSRD) usually take the form of traditional annual reports, but focus on the information specified by the directive.
These reports are developed by companies in order to disclose financial and non-financial information related to their performance. They promote transparency and force companies to commit to more environmental sustainability. The reports are intended for stakeholders and can be consulted by all.
Their publication helps to promote sustainability, corporate social responsibility, and transparency across the European market.
Write CSRD-compliant reporting
The CSRD aims to standardize key indicators in order to simplify comparability between companies. The directive specifies a specific structure that the company must follow in preparing its reports. Thus, it contains:
An introduction,
A presentation of the regulatory context,
A precise description of the methodologies used for data collection,
The initiatives put in place to achieve the objectives,
The results of the external audit.
The content of sustainability reports is governed by the ESRS (European Sustainability Reporting Standards).
ESG Reporting
The ESG report discloses the company's performance in the following three areas: environmental, social, and governance methods.
The company must highlight its vision in terms of sustainable development. It defines objectives relating to its impact on the environment: water and energy management, greenhouse gas emissions, biodiversity, etc. It must also provide data related to its work practices, including its inclusion and diversity policy. In addition, the report includes key indicators that illustrate the information provided by the company (carbon footprint, diversity rate, organizational structure, etc.)
An executive summary helps highlight the important points of the report. It reports on achievements and initiatives underway to improve its performance.
Standards
12 cross-sectoral standards are specified and made mandatory for all companies covered by the CSRD.
In addition, companies must report on a series of mandatory standard indicators according to their sector of activity. These obligations may be supplemented by specific standards for listed SMEs or for non-European companies.
Each company must therefore find out about the obligations to which it is subject, since they differ according to several criteria.
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Writing, ESG standards, external audit: guarantees of reliability and confidence for all stakeholders.
Ensure compliance of reports
Ensuring CSRD compliance is essential for EU businesses. This involves rigorous management of the collection and disclosure of information, as well as attention to recognized ESG reporting standards. The CSRD aims to increase the transparency and quality of non-financial information disclosed by companies.
Compliance with standards
For the sake of harmonization, the CSRD applies the use of recognized ESG reporting standards, such as the Global Reporting Initiative (GRI) or equivalent. When it comes to performance reviews, companies should explain how they collect data and calculate KPIs to ensure compliance.
Submit the report to an external audit
The CSRD provides for the obligation of external audits for large listed companies, large unlisted companies, and public interest entities that exceed a certain threshold. This makes it possible to identify any flaws in the report and to remedy them before it is published.
The external auditor reviews the information contained in the sustainability report for accuracy, reliability, and compliance with recognized ESG reporting standards and CSRD requirements.
Once the audit report is finalized, it must be included in the sustainability report to demonstrate compliance with CSRD requirements.
The external audit process aims to ensure that the sustainability report is reliable and transparent, thereby enhancing stakeholders' trust in the information disclosed.
Accessible and transparent reporting
In addition to being reliable, the reports must be understandable. Thus, they must be written in a clear and intelligible manner so that all stakeholders can easily understand the information presented. In addition, because the reports must be accessible to all stakeholders who may be affected by them, including investors, customers, employees and regulators, companies are required to make them public.
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