Understanding the Corporate Sustainability Reporting Directive (CSRD)

The Corporate Sustainability Reporting Directive (CSRD) represents a significant advancement in sustainability reporting for businesses operating within the European Union. Building upon the foundation established by the Non-Financial Reporting Directive (NFRD), the CSRD introduces expanded reporting requirements on Environmental, Social, and Governance (ESG) matters, effective from January 5, 2023. This directive will gradually replace the NFRD, with the new regulations kicking in from 2024 onward.

Key Features of the CSRD

• Expanded Scope: CSRD applies to a broader range of companies, including large corporations and listed small and medium-sized enterprises (SMEs). Additionally, non-EU companies generating over EUR 150 million on the EU market are also required to comply.
• Double Materiality Concept: Companies must report not only on how environmental changes impact their business but also on the effects their operations have on the environment, including social and governance aspects.
• Future-Oriented Reporting: The directive mandates reporting on sustainability goals, adverse effects, and intangible resources, ensuring businesses consider long-term impacts.
• European Sustainable Reporting Standards (ESRS): While the CSRD outlines the requirements, the ESRS details the content of disclosure obligations, emphasizing pollution of air, water, soil, and substances of concern.

The CSRD emphasizes the importance of detailed hazardous substance reporting, specifically the reporting on Pollution (ESRS-E2):

• Air, Water, and Soil Pollution ([E2-4]): Companies must provide measurable data on emissions and microplastic usage.
• Substances of Concern (SoC) and Substances of Very High Concern (SVHC) ([E2-5]): Requires thorough reporting on hazardous substances in line with regulatory standards.

The CSRD applies to the following company types:​

• Large companies based in the EU or with an annual turnover of above €150 million in the EU.​
• Companies meeting at least two of the following three conditions: 1) €40 million in net turnover 2) €20 million in assets 3) 250 or more employees.​
• Companies listed on regulated markets in the EU (apart from listed micro-enterprises).​
• Listed SMEs (with a transitional period until 2028).​
• Non-EU companies with a net turnover of €150 million in the EU and with at least one subsidiary or branch in the union.​

The Role of 3E in Supporting CSRD Compliance

3E stands as a strategic partner in helping companies meet the rigorous requirements of the CSRD, particularly within ESRS-E2, focused on pollution:

• Authored SDS: SDS authored by 3E or with embedded 3E Regulatory Intelligence document hazardous substances subject to CSRD reporting
• Managed SDS: Indexation of hazardous substances, ensuring thorough management and accessibility of data.
• Data Collection: Facilitates the collection of hazardous substance data, essential for effective reporting.
• Screening Processes: 3E products enable portfolio screening against hazardous substance regulatory lists
• Expert Insight and Horizon Scanning: Provides ongoing updates on CSRD developments and other emerging regulatory topics, offering expert insights into business impacts.

Compliance Details and Benefits

By aligning with the CSRD requirements, businesses not only ensure legal compliance but also enhance their transparency and accountability in sustainability practices. This not only builds trust with stakeholders but also positions companies as leaders in the transition toward a sustainable economy.

For regulatory compliance professionals and their stakeholders, 3E offers the necessary tools and expertise to seamlessly integrate CSRD requirements on pollution into their operations, positioning them at the forefront of sustainable business practices. Engage with 3E today to ensure your company is ready for the future of sustainability reporting.