How sustainability managers are getting ready for CSRDby Eleonora Kurbanov
The Corporate Sustainability Reporting Directive (CSRD) has caused headaches for many people with sustainability responsibilities in organizations in recent months. The EU reform of sustainability reporting requires many companies to disclose their ESG indicators, targets and strategies in the areas of environment, social affairs and corporate governance on an annual basis from 2024. A complex task that is set out in an almost 300-page legal text. But what is the best way for companies to proceed now?
One thing is clear: now is a good time to tidy up the organization's sustainability management and bring clarity to processes and strategies.
We have summarized three fields of action that sustainability managers should take on now:
1. Put together a strong team that not only masters sustainability management but also stakeholder management.
The new sustainability reporting requirements call for close networking between all areas of the company. A dedicated sustainability team, consisting of representatives from different departments, is ideal for facilitating access to the required data and gaining a holistic view of the company's sustainability performance. These team members should not only be motivated, but also willing to undergo further training to become sustainability experts. After all, sustainability management is a continuous learning process and covers a wide range of topics that go far beyond environmental factors.
In addition to technical expertise, a strong understanding of internal processes, corporate culture and stakeholder requirements is also required. The materiality analysis in particular requires sensitivity in the stakeholder dialog with internal and external stakeholder groups. As not everyone in the organization will be immediately open to the requirements of sustainability management, it is also important that those responsible demonstrate empathy and leadership skills. Also upwards: Managers are among the most important stakeholders to manage. They must stand behind the sustainability goals and radiate this commitment throughout the organization.
2. Implements a data management system and uses it as a control tool.
Systematic and regular monitoring of a company's sustainability performance is one of the main tasks of sustainability management. This requires comprehensive data collection and inventory, in which all relevant sources and evidence for subsequent reporting are identified and listed.
To capture and manage the wealth of quantitative and qualitative data points required by the CSRD, an efficient and automated data management system is essential. Excel spreadsheets may be pragmatic, but they are no longer sufficient in view of the extensive disclosure requirements. There are numerous providers of specialized reporting software from which you can choose to suit your own needs. Test phases can be used to check whether the system is so user-friendly that those responsible can actually work with it. Ideally, the system should be used as a central control tool that supports decision-making at a strategic level.
3. Develop a sustainability strategy that provides you and the organization with a clear roadmap for the coming years.
The most important prerequisite for successful sustainability performance is a clear sustainability strategy. The double materiality analysis, which will also be necessary for reporting, forms the basis for this. Based on this and other studies, companies should define an ESG ambition level for their sustainable transition that helps them understand how far they still have to jump. The whole thing becomes concrete and tangible with topic-specific targets and metrics as well as a corresponding program of measures.
It is important that behind every goal there is also a plan for how it is to be achieved. Ambitious but unrealistic goals are not helpful in practice. Broken down, the sustainability strategy should accomplish two tasks:
it serves as a control instrument in corporate management.
it provides the organization with clarity about its sustainable orientation.
In order to meet these requirements, the sustainability strategy should be developed with sufficient time and resources and then implemented and communicated with the same determination.
The CSRD involves a lot of work, but also a lot of momentum that sustainability managers can harness to drive forward long overdue issues in the organization.
diffferent is happy to support you in developing a detailed step-by-step plan for setting up your own sustainability management.