CSRD and DPEF: What are the differences?
Summary
The CSRD is a European directive that standardizes ESG reporting for all large companies in the EU, while the DPEF is a French requirement targeting large companies operating in France. The CSRD is more comprehensive and harmonized at the European level, whereas the DPEF is specific to French legislation.
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What is the CSRD?
The CSRD (Corporate Sustainability Reporting Directive) is a European directive adopted in 2021 that strengthens the non-financial reporting obligations of companies. It aims to enhance the transparency of environmental, social, and governance (ESG) information for investors and other stakeholders. The CSRD applies to a wide range of companies, requiring them to publish standardized and verified reports on their ESG performance. This directive replaces the NFRD (Non-Financial Reporting Directive).
What is the DPEF?
The DPEF (Déclaration de Performance Extra-Financière) is a reporting obligation established by French law, which requires large companies to disclose information about their environmental, social, and societal impact. Introduced in 2017, the DPEF aims to increase transparency and provide stakeholders with a clear view of the risks and opportunities related to sustainability. The companies concerned must include this information in their annual management report, in accordance with the standards and criteria defined by French legislation.
Differences between the CSRD and DPEF
CSRD vs. DPEF: What are the objectives ?
The CSRD (Corporate Sustainability Reporting Directive) and the DPEF (Déclaration de Performance Extra-Financière) have similar objectives in terms of transparency and accountability, but with different scopes. The CSRD, a European directive, aims to standardize the reporting of environmental, social, and governance (ESG) information across the EU by improving the quality and comparability of the data published by companies. Its primary goal is to provide investors and stakeholders with reliable information to assess sustainability-related risks.
In contrast, the DPEF, governed by French legislation, aims to enhance transparency on the environmental, social, and societal impacts of large companies in France. It is part of a compliance approach to meet national requirements.
CSRD vs. DPEF: Which companies are covered?
The CSRD applies to a wide range of companies across the European Union:
Large publicly traded companies,
Companies with more than 250 employees, Companies generating more than €40 million in revenue or with a total balance sheet exceeding €20 million,
It also applies to certain listed SMEs and non-European companies with significant activities within the EU.
In contrast, the DPEF primarily targets large French companies, such as those listed on the stock exchange, as well as non-listed companies that meet certain size criteria (more than 500 employees) and revenue thresholds (over €100 million). The DPEF specifically targets companies operating in France, imposing transparency obligations on their non-financial performance.
CSRD vs. DPEF: Compliance Requirements
The CSRD requires companies to publish detailed reports on their environmental, social, and governance (ESG) performance, adhering to the reporting standards defined by the EFRAG (European Financial Reporting Advisory Group). These reports must be verified by an independent third party.
The DPEF, on the other hand, requires relevant French companies to provide a non-financial performance statement in their annual management report. This statement must cover environmental, social, and societal impacts, as well as associated risks. While both frameworks aim to improve transparency, the CSRD is more comprehensive and standardized at the European level, whereas the DPEF is specific to French legislation.
CSRD vs. DPEF: Impact on Corporate Strategy
The CSRD and the DPEF have significant impacts on corporate sustainability strategies. The CSRD requires companies to integrate sustainability into their overall strategy, making transparency on ESG (Environmental, Social, Governance) performance essential for investors and other stakeholders. This directive may lead to adjustments in risk management, data collection, and communication.
The DPEF, on the other hand, pushes French companies to consider their non-financial impacts in their strategy. It influences the management of environmental, social, and societal risks and encourages greater corporate social responsibility (CSR).
How to Prepare for the CSRD and the DPEF ?
First, companies should assess their current compliance with ESG (Environmental, Social, Governance) reporting. It is crucial to implement effective data collection systems and ensure independent third-party verification. Companies should also train their internal teams on the specific requirements of each framework, particularly on reporting standards and performance criteria.
The use of digital tools and specialized software, such as D-Carbonize, can facilitate data management and tracking of sustainability indicators. Finally, proactive communication with stakeholders is essential to ensure transparency and strengthen the company’s credibility in its compliance and sustainability efforts.
