Sustainability and CSRD have long been relevant topics, but now the EU is significantly raising the bar with the Corporate Sustainability Reporting Directive (CSRD). In short, this means that organisations must be much more transparent about how they work with sustainability – and not just from their own perspective. It is now equally important to report on what stakeholders think about the company’s efforts.
But what does this mean in practice? Let us explain!
CSRD – More Than Just a Report
Previously, companies could more or less create a polished report, present their sustainability goals, and consider the job done. However, with CSRD, a deeper approach is required. The directive is based on the concept of double materiality, meaning that companies must analyse both:
- How sustainability issues impact the company (e.g., climate change, new regulations, consumer trends).
- How the company impacts the wider world (e.g., environmental footprint, working conditions, social responsibility).
Companies must also report on how their stakeholders perceive their sustainability efforts. It is no longer enough to simply state, “This is what we are doing” – they must also demonstrate that stakeholders, such as investors, employees, and customers, actually agree that they are doing a good job.
What Does This Mean for Organisations in Practice?
This means organisations must actively engage with their stakeholders – and not just once a year. Stakeholders can include employees, customers, investors, suppliers, and the wider society. To understand their views, companies can use methods such as:
- Customer surveys – Ask stakeholders what they think about the company’s sustainability efforts.
- Workshops – Invite different groups to discuss and gather feedback.
- Social media and customer feedback – What are people spontaneously saying about the company? (Tip: check the comments section).
- Public consultations – Particularly important for companies that significantly impact society, such as construction or energy firms.
Beyond being a legal requirement, there are many benefits to taking stakeholder opinions seriously:
- Greater credibility – Listening and acting builds trust.
- Better decision-making – Understanding what truly matters to your stakeholders allows you to refine your sustainability strategy more effectively.
- Easier access to investments and customers – Transparency and honesty are key to long-term success.
CSRD makes it harder for organisations to merely look good on paper. Now, they must genuinely assess how their sustainability efforts are perceived – and report on it openly. Engaging with stakeholders is not just about compliance; it is about building a stronger and more credible organisation.
How would your stakeholders rate your organisation’s sustainability efforts if they had the chance to share their views?