💫The cool kids are all doing CSRD - here's 5 reasons why you should too

This is the monthly newsletter from Bemari where we talk about how to not get lost in sustainability. The hottest topic right now is the Corporate Sustainability Reporting Directive (CSRD) and what will happen to it - will the EU backtrack? Will the requirements remain? Will timelines shift, or could the scope for applicability change?

We have been on a little bit of a hiatus but the Spark now returns to its regular schedule!

With great timing too, as we have been hearing increasing concerns about the fate of CSRD from multiple organisations. Some are in full readiness mode, some have decided to wait and see, while others are planning for Plan B in case the upcoming Omnibus review leads to significant changes to scope and applicability of sustainability regulations.

An announcement is expected next week. Ahead of this, we wanted to share with you reasons why regardless of the outcome, CSRD/ ESRS is a tool that can be very valuable for your organisation.

1. Resilience planning. Whether mandatory or not, the topics that are covered by CSRD are not going away. Climate risks are still a threat to businesses everywhere, and a financial reality - global GDP is projected to decline by 12% for every 1 degree of warming, and annual climate-related losses in 2024 surpassed $320bn.
   
   Let’s consider the following: your workers are core to the success of your business. Many businesses depend on nature inputs both directly and indirectly. Challenges in your supply chain can still catch you out if you are not managing them proactively. All of these issues are key CSRD topics.

   What CSRD offers is a methodology to evaluate how resilient your business is against various risks in this volatile world, and to consider how it contributes to what sustains it - people and planet.
   
   Think of it as your business's survival guide in a world that's getting spicier by the day. Because "we didn't see that coming" looks way worse in a quarterly report than "we've got this covered”.

2. Standardisation. Ever felt like sustainability reporting is that giant jigsaw puzzle where someone accidentally mixed in pieces from other boxes? CSRD is built on a number of existing standards and it consolidates various frameworks, approaches and metrics, so there is a lot of convergence and interoperability.
   
   If you report under TCFD, or TNFD, or doing carbon reporting - you can use that information to report under CSRD. If those topics are material to your business, CSRD gives you a reason to start assessing how you manage them, which will in turn make it easier for you to report against other requirements.

3. Link to the real world. Ok, CSRD is not single-handedly solving the issue of real-world sustainability. It is, however, currently the only officially agreed on reporting framework to consider your overall relationship with economy, people and planet. Plus, it references planetary boundaries and nature as a ‘silent stakeholder’, which is an important shift in itself.
   
   The requirements to consider the context, assess value chain contributions and engage stakeholders - all these help to start connecting those dots between your strategic business drivers and the actual world we live in.
   
   It can help you move beyond the “flavour of the month” sustainability initiatives, making decisions based on what “customers might care about” and supports you to embed sustainability into business risk and strategy discussions.
   

   There are tools to assess real sustainability performance (see below in the Toolkit) and all these can be used to report on your progress within CSRD framework.

4. Guide to sustainability strategy. Many companies say - we do not know where to start with sustainability, what should we be focusing on? Well this is the framework to guide that! Even if you do not follow a very extensive, holistic and consultative process, going through the principle stages of the double materiality assessment (DMA) will help identify what matters to the business.
   
   Once you have your focus areas, you then assess how you are managing those - do you have policies, practices, targets and are you monitoring progress against them? You may have some already, while others may still need to be developed. Voila, you have just gone through the CSRD-aligned process to arrive at a strategy and an action plan.

5. A head start is better than a head in the sand. You will have to report on the social and environmental topics one way or another. It might seem like ESG is not in vogue anymore (if you read the news), when in fact ESG is going through an important transformation: becoming part of the fabric of business. Some interesting trends on this are highlighted here by David Carlin.
   
   There are multiple country-level or industry requirements that companies still have to comply with (see non-exhaustive but telling lists here and here). Countries are introducing new ones (China has introduced ESG reporting requirements similar to CSRD, and so has India with its BSRS).
   
   As we have seen, in our global and interconnected world, the expectations for this information may come from all directions: customers, suppliers, investors and partners, even if you are not under any obligations in your country of registration.

   Why not start preparing and implementing the systems you need now? You can never be too ready.

For your toolkit

• ESRS library - the standards, guidance and Q&A. You might need a cup of coffee to get you through it but it will be worth it!

• VSME standards - voluntary standards for smaller companies, if you want to try an ESRS-lite edition

• Doing business within planetary boundaries - looking at environmental impacts through the lens of planetary health

• Authentic Sustainability Assessment - assessing contribution to real-world sustainability

• Future Fitness Business Benchmark - tools to set sustainability targets that are aligned with the future we need

For your calendar

27 February, 3pm UK time - we will be joining our partners Benchmark Gensuite and GIST Impact in a webinar discussion on how to turn compliance into value, and how a data-driven approach can help. Sign up here.

Meme of the month

Recap of Good News this month

💫 That’s it for this month. We hope it sparks a change for you and your organisation - we would love to hear what change it is. Let us know!

Is there an advice that has been very helpful to you and you think others would find helpful too? Please share by emailing [email protected].