What does CSRD mean and what are the obligations for my company?
Feb 4, 2024
In a world where sustainability is becoming increasingly central, it is crucial that you are transparent about your impact on the environment, society, and governance. For SMEs, this can be a challenge, especially with the introduction of the Corporate Sustainability Reporting Directive (CSRD). But what does CSRD entail exactly, and what does this mean for your company?
What is CSRD?
The CSRD is an EU directive that obliges companies to report extensively on their sustainability performance. The goal? To create a uniform and transparent system that provides stakeholders, from investors to consumers, with insight into the sustainability efforts of companies. Although the direct obligations of CSRD mainly apply to large enterprises, this also has implications for SMEs. Large companies will ask for sustainability information from their SME suppliers, causing them to practically comply with the directive.
Who does CSRD apply to?
CSRD will not be mandatory for you as an SME. However, you may come into indirect contact with it in practice. Currently, the Directive only applies to listed companies. They will have to report for the financial year 2024. Ultimately, companies will fall under the Directive if they meet two of the three conditions:
revenue is higher than 50 million euros per year
total assets exceed 25 million euros
more than 250 employees work (on average over a year)
An estimated thousand companies in the Netherlands will have to comply with the CSRD.
Why is CSRD relevant to me as an SME?
It is likely that the Directive does not directly apply to you. However, you are likely to come into contact with it in some way. Research by ABN Amro shows that more than 100,000 SMEs will be affected by the Directive. Large companies, to which the Directive directly applies, rely on the information provision of smaller suppliers and customers in the supply chain for their own reporting. So, it is also likely that a party in your chain will soon come knocking on your door.
How can I prepare for CSRD?
As mentioned, the CSRD does not apply to smaller companies. Although the CSRD may sound complicated, there are simple ways to prepare:
Start with measurement: Identify where your company stands in terms of environment, society, and governance.
Set sustainability goals: Determine what you want to improve and create an action plan.
Communicate your efforts: Use your website and social media to share your sustainability stories.
Once you are well-informed about the sustainability status of your company, it is a breeze to share this with your partners via our platform. Knowledge is power!
What else can I do with CSRD as an SME?
As an SME, you can see CSRD as an opportunity to emphasize your commitment to sustainability. It is about more than just meeting the requirements; it is about strengthening your brand and building trust with your customers and partners. By reporting on your sustainability efforts, you can demonstrate that your company makes a positive contribution to the world and that you are serious about it. Measuring your sustainability performance is essential for being able to report on progress. Greenreporting offers tools specifically designed for SMEs to easily collect and report their sustainability data. This not only makes it easier to meet the demands of large companies, but also allows you to monitor and improve your own sustainability journey.
Ready to get started?
Sustainability is no longer a choice, but a necessity. With CSRD, companies are encouraged to be more transparent about their impact. For SMEs, this offers both challenges and opportunities. Greenreporting is ready to guide you through this process.
Curious about how you can prepare your company for CSRD and elevate your sustainability efforts to the next level? Secure your spot on the waiting list for our tool by signing up. Together, we make sustainable business accessible and achievable for every company.
