Is your company ready for the CSRD 2024?

As society and more and more governments call for zero-emissions initiatives - see the Hamburg city council, which will no longer allow new combustion engines for taxis from 2025 - the need for accurate insights into these initiatives is also increasing.

To understand the impact of their emission reduction initiatives, companies are often confronted with the question of how to measure and report these initiatives.

In our last blog post on the European Sustainability Reporting Directive (CSRD), we explained the basics of the CSRD and helped you understand how it affects your company's sustainability management.

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With this in mind, in this article we explain how to determine your company's CO2 emissions, the industry standard for doing so and what you can do to prepare for the CSRD reporting requirements.

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To make it practical, let's go through in three steps why NAVIT chose SQUAKE as a partner to make sustainability core to employee mobility - from raising awareness of emissions to reporting and offsetting.

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What is the CSRD?

The Corporate Sustainability Reporting Directive, or CSRD, is an EU directive on corporate sustainability reporting and was adopted by the European Council on 28 November 2022 as part of the EU Green Deal. The CSRD updates and expands the scope of sustainability reporting requirements introduced by the existing Non-Financial Reporting Directive (NFRD) in 2014. This change in legislation means that all large companies will be held publicly accountable for their impact on people and the environment. 

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With the new CSRD guidelines, almost 50,000 companies will have to prepare for compliance, compared to about 11,000 companies under the previous NFRD framework. Most likely, your company will also be affected by the CSRD.

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The CSRD has two objectives:

• First, it ensures that companies provide reliable and comparable sustainability information that stakeholders need to assess companies' non-financial performance, putting sustainability reporting on the same level as financial reporting.
• Secondly, it improves transparency in the areas of environment, social and governance, also known as ESG, for all stakeholders.

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The following timetable for the implementation of the CSRD illustrates how enforcement will take place gradually: 

• 2025 Annual and ad hoc reports for the full year 2024 for companies already subject to the NFRD.
• 2026 Annual and ad hoc reports covering the whole of 2025 for large companies not currently subject to the NFRD.
• 2027 Annual and ad hoc reports for the full year 2027 for listed SMEs, small and non-complex credit institutions and captive insurance companies, with an opt-out until 2028.
  
  
  

When will I have to report?

Source: "The Corporate Sustainability Reporting Directive (CSRD)" - KPMG

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Regardless of the shape or size of your business, it is only a matter of time before your company needs to set up a reporting system.
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‍These 4 steps will help you get started with reporting:

• Step 1 - Understand: Understand how CO2 emissions calculations work and how you can use this information to make better sustainability decisions.
• Step 2 - Set targets: Set targets for achieving net zero and prepare the infrastructure for tracking and recording emissions. Involve your employees in a timely and transparent manner.
• Step 3 - Reduce: Identify the emissions your company wants to reduce or avoid altogether. Act in the spirit of sustainability.
• Step 4 - Offset: Some emissions are difficult to offset. Find out how you can use offsetting options.

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Why is employee mobility relevant to CSRD?

Employee mobility takes a central role in a company's sustainability strategy. In fact, 6% of global CO2 emissions can be attributed to employees' daily commute. Some studies even suggest that commuting accounts for up to 98% of an employee's work-related emissions. Although it is difficult for most companies to collect data on employee mobility, it is very important for them to understand it - mainly for these two reasons:

• Mobility often accounts for a large part of a company's environmental impact and therefore plays an important role in a company's emission reduction strategy or net zero targets. 
• Mobility is a requirement for CSRD reporting as part of your company's Scope 3 emissions.