As of January 1st 2024, the Corporate Sustainability Reporting Directive (CSRD) will come into effect. It’ll initially apply to all EU and Non-EU companies listed on EU regulated markets with over 500 employees and to those already subject to the existing EU Non-financial Reporting Directive (NFRD). These businesses will have to comply with the EU directive by reporting on ESG (environmental, social, governance) issues and their impact. It is expected that CSRD will be rolled out to more and more smaller-sized businesses over time.
The primary goal of CSRD is to enhance transparency and comparability of sustainability information across various entities to support all stakeholders with high-quality information, guide decision-making processes and to boost the flow of capital towards sustainable activities.
A key focus of this directive is the disclosure of Scope 1,2, and 3 emissions, required for Greenhouse Gas (GHG) reporting for UK businesses. Scope 1 and 2 cover direct and indirect emissions respectively, while Scope 3 refers to all the emissions not directly generated by the company but associated with its activities across the entire value chain. For many businesses, Scope 3 emissions account for more than 70% of their emissions and are usually the most difficult to calculate.
A recent poll, conducted by 7bridges, of UK-based businesses that assessed their readiness for Scope 3 reporting under CSRD found:
- 71% had measured their own carbon footprint
- 40% were already compliant
- 25% said they will not be able to meet the deadline
To ensure readiness for Scope 3 reporting, businesses must take immediate action to align with the new reporting standards, digitise their information and seek the required assurances needed by the CSRD guidelines. An effective way to address these requirements is to map your emissions footprint and understand the extent of your emission sources.
If you need to create visibility of the transport aspects of your company's scope 3 emissions, Woodland can support your business in achieving CSRD compliance through our transport Carbon Reporting Services.
Should you have any questions on sustainability regulations or require guidance on carbon reporting and ways to make your supply chain more sustainable, please reach out to our dedicated Sustainability team here.
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