A new EU directive (CRSD) will tighten reporting requirements on emissions for companies
Big changes will be made to existing emission reporting standards as the newest Corporate Sustainability Reporting Directive will be adopted by the European Commission in June later this year, after being accepted this past December.
What is the CSRD?
The CSRD are new regulations by the EU that aim to strengthen and update existing corporate sustainability reporting standards. The CRSD, which came into effect this year, will require around 50.000 companies and, eventually, SMEs to provide climate data on their products and processes. Some larger companies already have to report on the financial year for 2024. This is a big change from previous regulations covering about 11,000 companies.
How will it affect companies?
The new directive means that companies will have to start collecting climate data on their products and processes, as they will have to report within the next 6 years. Companies will also have to provide information on circularity, sustainability risks to environment and society, and report future targets and progress.
Not only will companies have to report, but now they must also be willing to have their data subject to third-party assurance.
The European Commission has stated that there will be significant sanctions for not complying, determined by the member states. In Germany, a company may receive a fine of up to €10M or 10% of the annual turnover.
How can companies stay ahead?
One way is through data-driven decarbonization. Companies can start incorporating this into their sustainability strategy using digital platforms that calculate carbon emissions on their products and processes.
ReFlow’s platform helps companies stay in line with regulations and digitally decarbonize by:
· Documenting your Scope 3 emissions for compliance
- · Assessing circularity potential
- · Making it easier to engage complex supply chains and share data
- · Generating third-party validated documentation and facilitating easy-to-make calculations on our platform based on ISO standards.
Hopefully, the new CRSD will encourage more transparency and accountability in companies, which will aid the green transition.