Is the Corporate Sustainability Reporting Directive (CSRD) a bureaucracy monster? The new EU directive obliges companies to report on their sustainability performance. Reporting must be carried out in accordance with the European Sustainability Reporting Standards (ESRS). These requirements certainly represent a major challenge for both large companies and SMEs. However, there are also numerous CSRD aids, including from the EFRAG, as well as numerous ESG software solutions that can be a great support for companies.
CSRD assistance from EFRAG
Who is EFRAG?
The European Financial Reporting Advisory Group (EFRAG) is a private association founded in 2001 with the support of the European Commission to serve the public interest. Its members are European interest groups, national organizations and civil society organizations. EFRAG has two mandates from the European Commission:
- Development of IFRS standards for financial reporting
- Develop drafts for sustainability reporting (CSRD) and standards (ESRS)
What CSRD support does EFRAG offer?
In recent months, EFRAG has published several free guides in the form of implementation guidelines and other formats to help companies meet the CSRD requirements.
1) List of ESRS data points
In May 2024, EFRAG published the ‘final’ Excel table with over 1,100 data points. This Excel spreadsheet contains an overview of all data points in Set 1 of the European Sustainability Reporting Standards and is intended as a non-legally binding application aid for the implementation of the ESRS requirements. They serve as building blocks for the provision of a structured and comparable format for disclosure.
A particularly helpful feature of the Excel list is the note indicating which of the ESRS data points are mandatory or voluntary. In addition, each data point indicates whether a narrative, semi-narrative, quantitative or monetary disclosure is expected. It is important to note that a company does not have to disclose all data points in its sustainability report, even if they are mandatory. Instead, every company must carry out a double materiality assessment This materiality analysis results in the material topics for a company and only the data points of these material topics must ultimately be reported.
Extract from the list of ESRS data points
Companies can also use the overview to carry out a gap analysis. For example, it can be used to determine which data points required by ESRS are already reported in accordance with other international reporting standards and sustainability reporting frameworks.
2) Implementation guide for the materiality assessment
EFRAG’s guide to implementing dual materiality helps companies understand how to conduct a materiality assessment and which environmental, social and governance (ESG) topics they need to cover in their sustainability report. It explains step-by-step how to carry out the analysis and answers frequently asked questions. As the guidelines were only available in German until the publication of this article, we have summarized the four steps for creating a materiality assessment based on the guidelines in an article for you.
3) Implementation guide for the value chain
IG 2 deals with the supply chain or value chain in sustainability reporting. It explains what information companies must provide on the impacts of their entire value chain. This includes environmental and social issues as well as risks and opportunities (IROs).
The draft also contains frequently asked questions (FAQs), which are intended to provide greater clarity during implementation, as well as a “value chain map”, which clearly shows which information is relevant for individual reporting requirements along the supply chain.
Further CSRD assistance
In addition to EFRAG, there are numerous other resources and CSRD tools that support companies in implementing their sustainability reporting obligations.
Mapping of ESRS to EMAS and ISO requirements
The German Institute for Standardization (DIN) has published a table in which the ESRS topics have been mapped to the requirements of the ISO certificates. EFRAG has also published a mapping table of the ESRS to the information in the Environmental Management and Audit Scheme (EMAS).
This assistance can lead to considerable time savings, reduce duplication of work and therefore also cut costs.
CSRD assistance from CSR Tools
Our aim at CSR Tools is to simplify the implementation of the CSRD for companies. To this end, we translate the complex ESRS requirements into easy-to-understand language in our blog posts and develop tools and templates that save companies a lot of time and effort. Here is an excerpt of our CSRD assistance:
- CSRD instant check Test free of charge and with just a few clicks whether your company is affected by the CSRD and from when you are obliged to report.
- Excel template for carrying out the double check materiality assessmentThis Excel template guides you step by step through the materiality assessment process, including stakeholder analysis, and you receive a materiality matrix as a result.
- Data point mapping tool The more than 1,000 data points often seem very daunting. Our ESRS data point template shows you at the touch of a button which data points you need to report based on your material topics.
- ESG tool selection evaluation model According to the CSRD study by Ubirch, it is extremely difficult for companies to select the right software solution for sustainability reporting. Our CSRD software evaluation model offers you a structured approach.
GRI - ESRS Mapping Tool
The Global Reporting Initiative (GRI) has developed a leading sustainability reporting standard that is used by over 10,000 organizations in over 100 countries. In December 2023, the GRI published a preliminary mapping tool to support GRI reporters preparing for the first application of the European Sustainability Reporting Standards (ESRS).
The CSRD guidance illustrates the corresponding data point in the GRI Standards for each individual ESRS data point. This tool will be updated in 2024 according to the final list of ESRS data points. The GRI -ESRS Mapping Tool is available for free download.
ESG Industry Materiality Map from MSCI
MSCI is a leading provider of key decision-making tools and services to the global investment community. The MSCI ESG ratings provide an assessment of companies’ long-term resilience to environmental, social and governance (ESG) issues and is a useful tool to identify potential industry materiality issues for the company in the course of the double materiality assessment. The‘ESG Industry Materiality Map‘ is a representation of current key ESG issues and their contribution to companies’ ESG ratings.
Working aids for climate adaptation (Excel) from the trade association
With the working aids on climate adaptation from the German Retail Association, the HDE offers two free Excel templates to help retailers assess their exposure to climate change impacts and derive suitable adaptation options.
CSRD reporting is definitely a challenge, especially in the first reporting year. But with the right preparation and the right CSRD support, it can be mastered. In addition to the use of ESG software solutions, a solid materiality assessment together with the ESRS data points are certainly core elements of successful implementation.
