What is the CSRD, the new CSR standard that will revolutionize corporate extra-financial reporting?

With the Green Deal "the EU launched a series of measures focusing on respect for human rights and environmental protection, with the aim of making sustainable corporate governance the European standard. At the heart of these measures is the creation of transparency by regulating the supply and value chains of European companies.

What is CSRD?

The CSRD Directive (Corporate Sustainability Reporting Directive) is a European regulation designed to improve and harmonize the disclosure of environmental, social and governance (ESG) information by companies.

This directive, which is part of the Sustainable Finance Package, aims to direct capital flows towards sustainable activities by providing financial companies, investors and the general public with a reliable overview of the ESG information and sustainability risks faced by companies. CSRD is a core element of CSR reporting in Europe.

Who's concerned?

52,000 companies within the European Union will have to comply: by 2024, all large companies and listed SMEs will be affected, while small businesses and micro-enterprises will only be affected from 2027, to give them more time to adapt.

What is the aim of this reform?

CSRD offers several advantages for companies:

• Improved transparency The CSRD provides clear and comparable information on corporate sustainability.
• Strengthening investor confidence Investors can make informed decisions based on reliable ESG information.
• Risk management This measure helps companies to identify and manage sustainability-related risks.
• Innovation Innovation: CSRD encourages companies to adopt sustainable practices and to innovate in this field.

Thus, the CSRD will oblige (and is already obliging) companies to carry out in-depth reforms in each of the 3 target areas: social, environmental and governance, but also the impact of the company and its value chain on these factors, the principle of double materiality.

As a reminder, double materiality requires companies to take into account both the sustainability issues likely to impact impact their financial performance and the positive and negative impacts of their activities on their economic, social and natural environment.

Why is this an upheaval?

To prepare for these changes, you first need to identify your company's scope and timeframe. You'll need to identify which indicators are mandatory subject to materiality analysisthen anticipate the operational consequences: rethink governance and data collection processes, train employees who are not currently involved in reporting, rethink information systems, budget for associated costs (including audit costs)...

Failure to comply with these standards will result in sanctions.

How can HJC help you?

Aware of the challenges of sustainable and social development for tomorrow's world economy, HEC Junior Conseil has developed a department department specifically dedicated to these issues, under the responsibility of Leopold Ramé, Head of CSR & SSE and project manager for HJC.

HJC offers a full range to help you define your strategy.. Our approach includes an assessment of the company's current impact on the environment, society and the economy, an analysis of existing practices and data, and the formulation of CSR objectives that are appropriate, measurable and aligned with the company's strategic vision and values.

In the years to come, it will also be necessary to to keep abreast of CSR best practices practices, which is why HJC regularly assists companies in benchmarking these best practices. We can also carry out your double materiality studywhich will be mandatory for most European companies by 2027.