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CSRD 2024: A Comprehensive Guide and the Role of HR

In the evolving landscape of corporate responsibility, the prominence of CSRD, or Corporate Sustainability Reporting Directive, cannot be overstated. Articles on CSRD have been inundating the screens of major corporations, since CSRD will take effect for the largest, listed companies from 1st of January 2024. As an HR consultancy, Quintop has witnessed a surge in demands for CSRD specialists. In this article, we delve into the fundamentals of CSRD, its implications, and shed light on the crucial role HR plays in this transformative era.

Corporate Sustainability Reporting Directive

What is CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is an EU legislation requiring companies to report on the social and environmental impacts of their business activities, enacted as part of the European Green Deal in 2023. Its goal is to make Non-Financial Disclosure (NFD) the new norm in annual reporting. Failure to comply may lead to public acknowledgment of non-compliance, cessation of activities, or fines.

In essence, CSRD fosters transparency in non-financial reporting on ESG topics (Environmental, Social and Governance), contributing to a sustainable and accountable future.

Who must comply with the CSRD?

Effective January 1, 2024, CSRD applies to companies meeting the following criteria:

  1. Over 250 employees
  2. More than € 40 million in annual revenue
  3. More than € 20 million in total assets or balance sheet
  4. Publicly-listed equities who have more than 10 employees or € 20 million revenue
  5. International and non-EU companies with over €150 million annual revenue within the EU and at least one subsidiary or branch surpassing specified thresholds.

What are the basic criteria in the CSRD report

CSRD requires companies to detail business risks, opportunities, and impacts on Environment, Social, and Governance (ESG) issues in their annual reports. Larger companies often delegate these responsibilities to specialized sustainability teams. Key sustainability topics covered in the European Sustainability Reporting Standards (ESRS) include Climate Change, Pollution, Water and Marine Resources, Biodiversity, Circular Economy, Workforce conditions, Workers in the value chain, Affected communities, Consumers and end-users, and Business conduct. For a comprehensive list of ESRS, please refer to the full publication.

The Role of HR in CSRD

While the financial department is often the starting point for their initiatives of annual reporting, the emphasis on Non-Financial Disclosures at the forefront of annual reporting as a result of the introduction of CSRD, may create a shift to the norm when looking at content of the CSRD, with special focus on where majority of the requirements lie within the E,S and G, looking at the S (social) ie Own Workforce. This triggers the fact that vital role of HR should not be overlooked. HR can be instrumental in gathering necessary information, particularly in the “Own Workforce” disclosure chapter. This section addresses social information concerning the company’s workforce, emphasizing policies, representation, engagement processes, and training metrics.

As CSRD becomes ingrained in business practices, HR’s involvement in disclosing these topics is set to grow significantly. Quintop anticipates an escalating role for HR in navigating the complexities of CSRD. The impact is set to be pervasive, making CSRD an integral part of business operations. Prepare your company for CSRD, and let Quintop guide you towards a greener and more transparent future.

We anticipate a continuous rise in the importance of HR in disclosing these topics over time. CSRD is here to stay, and its impact will become business as usual.

Prepare your company for CSRD, and allow Quintop to work with you on navigating a greener and more transparent future with CSRD.
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