Welcome to a world where bureaucracy meets sustainability! 🌍✍️
In the corridors of the EU, extensive work has been done to shape the future of sustainability reporting. The latest directive on the agenda – the Corporate Sustainability Reporting Directive (CSRD) – is an update of the well-known NFRD. CSRD aims to highlight how companies impact our planet and society as a whole, introducing stricter reporting requirements on everything from environmental impact to social responsibility. 🌟
But what does this mean for your organisation? And how do you prepare for what could be described as a marathon of data processing and fact-checking? Let us guide you through these new regulations and dive into the world of CSRD, where every decimal brings us a step closer to a more sustainable future!
What is CSRD?
CSRD, the Corporate Sustainability Reporting Directive, is an EU directive that mandates organisations to report on their sustainability efforts. It replaces the previous Non-Financial Reporting Directive (NFRD) and goes further by including more organisations and providing clearer guidance on what needs to be reported. The aim of CSRD is to increase transparency regarding companies’ impact on society and the environment through more comprehensive and standardised reporting. This includes environmental impact, social responsibility, employee treatment, respect for human rights, and anti-corruption measures.
Which Organisations Are Affected by CSRD?
The CSRD regulations take effect from 2024 for organisations with more than 500 employees and will gradually be extended to smaller organisations. By 2026, it will apply to organisations that meet two out of three of the following criteria (according to the Swedish Financial Supervisory Authority):
✔ More than 250 employees
✔ A balance sheet total exceeding €20 million
✔ A net turnover exceeding €40 million
What Reporting Standards Exist Under CSRD?
There are 12 reporting standards divided into four categories:
- Two general standards (ESRS 1 and 2)
- Five environmental and climate impact standards (ESRS E1 to E5)
- Four social standards (ESRS S1 to S4)
- One governance standard (ESRS G1)
Regarding employee and workplace matters, the most relevant standard is ESRS S1 – Own Workforce.
What Needs to Be Reported Under ESRS S1 – Own Workforce?
Organisations must describe their processes for managing risks related to employees and workplace conditions, including issues such as harassment, discrimination, and equal treatment. Additionally, they must outline how employees are involved in risk mitigation and how problems are addressed when they arise.
Some key indicators that must be reported include:
📊 Workforce statistics, broken down by gender, country, full-time/part-time, and external/internal employees
📊 Percentage of employees who are union members
📊 Gender and age distribution within the board of directors
📊 Salary comparison indicators against relevant benchmarks
📊 Proportion of employees covered by social protection schemes for illness and work-related injuries
📊 Percentage of employees entitled to parental leave
📊 Number of work-related accidents within the organisation
This is just a small selection of the indicators covered under ESRS S1. For a detailed description of all requirements, visit the EFRAG (European Financial Reporting Advisory Group) website.
How Can Brilliant Help?
CSRD aims to increase transparency on sustainability issues and enhance comparability between organisations. It is part of a broader movement to emphasise the importance of sustainability, including both environmental responsibility and employee well-being.
The new regulations mark a significant step in improving corporate sustainability efforts. The key figures now required are objective data, often available through existing HR systems, rather than subjective data from sources such as employee surveys.
However, conducting employee surveys is an excellent way to improve workforce sustainability and strengthen the key indicators required by CSRD. With Brilliant’s platform and expertise, organisations can implement a proven methodology to create a positive work environment – something that is crucial for a sustainable and thriving workforce, as well as for being an attractive employer.
📩 Get in touch, and we’ll tell you more!