EU Corporate Sustainability Reporting Directive

The EU Corporate Sustainability Reporting Directive (CSRD) and how it affects UK companies

Background

On 5^th January 2023 the EU brought into effect a new directive aimed at modernizing business regulations for social and environmental reporting. This legislation aims to increase transparency for investors and stakeholders, to see investment risks associated with sustainability within a company or group. Many people view this new directive as a crucial move towards a sustainable, responsible and ethical business environment, which focuses on society and, ultimately, the planet.

Lots of UK companies probably gave off a large sigh of relief that they don’t currently need to worry about the extra reporting requirements as they’re not in the EU… but was it too soon?

Did you know that the directive also covers EU subsidiaries of non-EU parent companies?

Furthermore, if you were already obligated to report under the EU Non Financial Reporting Directive (NFRD), you now need to report under the CSRD as well.

This handy image explains it nicely:

source: www.sustainablefuturenews.com

So, I’m a UK registered business, I’m not listed and my turnover is less than 150 million turnover in the EU, I don’t need to worry. Are you sure?

UK businesses need to be forward thinking, it’s critically important to realise that these reporting mechanisms are on the way for UK companies, and external companies are already scoring UK businesses on their ESG ( Environmental, Social and Governance) submissions to Companies House and year end accounts.

These are already being used by some companies to make sure their own suppliers are ethically, environmentally and socially mindful and if not, are changing suppliers accordingly. UK MP’s are realizing we’re falling behind and are calling for reporting regulations to become more comprehensive. They’re also calling for the UK Government to launch an ESG strategy (if you want to read the report yourself). There is a large chance that ESG and it’s reporting are soon going to become hot topics for company reporting and disclosure… are you going to be ready?

Of course, you can always reach out to us at www.eco-shaper.com. We’re constantly at the forefront of regulatory changes and are continually looking to change our SaaS solution to maximise all aspects of carbon and ESG reporting.