Companies that have voluntarily reported on sustainability up till now, have always had the freedom to present themselves in the best light possible. The sustainability report is often a polished document with beautiful images and impressive numbers. However, with the introduction of the CSRD, much of this voluntary nature is being stripped away. Companies will have to be more transparent and report on aspects they may prefer to keep hidden. What does this mean for the sustainability report?
For the CSRD, organizations are required to report on what truly matters to them. The most relevant (material) topics must be addressed in the report. This means that even if you have a multitude of solar panels on your roof or have replaced all your lights with LEDs, you will also need to report on topics you would rather not bring to the forefront. This usually goes beyond what organizations have included in their sustainability report thus far.
The voluntary nature of reporting is largely gone. The CSRD obliges organizations to assess the topics that are relevant to their specific circumstances. The manner in which this assessment is conducted is verified by the accountant. In other words, the accountant not only checks the accuracy of what you report but also ensures that all relevant topics for your organization are covered in your reporting.
A new era for the sustainability report
What does this mean for the sustainability report? At first glance, the difference between a CSRD report and the traditional sustainability report seems significant. The CSRD will require much more extensive documentation, consisting of numerous policy documents and data reporting that may be less reader-friendly compared to the average sustainability report.
Does this spell the end of the sustainability report? Organizations have various choices in this regard. One option is to create a simplified and more polished version alongside the CSRD report, which is streamlined in terms of content. This way, the sustainability report as we know it can still exist alongside the CSRD report.
Another option is to enhance the CSRD report by placing the most important information you want to present at the forefront of your document. As an organization, you have the freedom to determine the structure in which you report, as long as you cover all the necessary aspects and indicate where each piece of information can be found.
In short, with the advent of the CSRD, it has become more challenging for organizations to present themselves as more environmentally friendly than they truly are. The CSRD report will look significantly different from a traditional sustainability report.
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