2030 is fast approaching and we’re already falling behind on our Net Zero targets, which will take a coordinated collective effort to get back on track.

As a result, businesses are coming under increasing pressure to monitor, report and reduce their energy use and carbon emissions to meet net zero targets.

This has led to an increase in both mandatory and voluntary regulations that require carbon emissions reporting to verify your net zero claims.

In this episode, Mel continues the ESG Reporting Disclosures series by explaining what the Corporate Sustainability Reporting Directive (CSRD) is, how it affects your emissions reporting, the verification requirements and who qualifies for CSRD.

You’ll learn

• What is CSRD?
• How will the CSRD affect your Emissions Reporting?
• What are the emissions verification requirements for CSRD?
• Who qualifies for ISSB S2?

Resources

• Carbonology
• Carbonology LinkedIn
• Carbonology Instagram
• CSRD

In this episode, we talk about:

[00:30] Join the isologyhub – To get access to a suite of ISO related tools, training and templates. Simply head on over to isologyhub.com to either sign-up or book a demo.

[02:10] Episode summary: Over the course of September, Mel will be exploring the latest climate change regulations that may affect your organisation. In this episode she dives into Corporate Sustainability Reporting Directive (CSRD).

[02:55] What is CSRD? – The Corporate Sustainability Reporting Directive (CSRD) is a new EU directive that modernises and strengthens the rules concerning the social and environmental information that companies have to report. It revises the 2014 Non-Financial Reporting Directive (NFRD), extends the scope of covered companies, and strengthens the reporting requirements.

The CSRD was formally adopted by the European Council on 28 November 2022.

The directive is transforming ESG reporting and will start affecting almost 50,000 companies from 2024 by expanding the scope to include all large companies, all companies listed on regulated markets, and non-EU companies with substantial activities in the EU. This includes non-EU companies with subsidiaries operating within the EU or those listed on EU regulated markets.

Many companies located both within and outside the EU will be affected during the CSRD’s phase-in period beginning in fiscal year 2024.

[05:10] How will the CSRD affect your Emissions Reporting?: Under the CSRD, companies are required to report on their greenhouse gas (GHG) emissions. This includes:

• Scope 1 Emissions: Direct emissions from owned or controlled sources. For example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.
• Scope 2 Emissions: Indirect emissions from the generation of purchased energy. This includes emissions from the production of electricity, steam, heating, and cooling consumed by the company.
• Significant Scope 3 Emissions: Other indirect emissions that occur in a company’s value chain. Companies are required to report on significant Scope 3 sources. This could include emissions from business travel, employee commuting, waste disposal, etc.

[07:10] What are the Emissions Verification Requirements? Under the CSRD, companies are required to have their reported GHG emissions data verified by an independent third party. The verification process ensures the accuracy and reliability of the reported information.

Verification options for CSRD include:

• Independent Verification: Companies must engage an accredited third-party verifier to audit and confirm the accuracy of their GHG emissions reports.
• Verification Standards: The verification must be conducted in accordance with recognised international standards, such as ISO 14064-3.
• Assurance Levels: The verification should provide a reasonable level of assurance that the emissions data is accurate and complete.
• Frequency of Verification: Verification is required on an annual basis to ensure ongoing accuracy and compliance with the CSRD.

[10:10] Who qualifies for CSRD? The Corporate Sustainability Reporting Directive (CSRD) applies to a broad range of companies based on the following criteria:

1. Companies listed on regulated markets in the EU (excluding listed micro-enterprises).
2. Large companies, classified as those meeting at least two of the following three conditions:
   • More than 250 employees.
   • A turnover of over €40 million.
   • Over €20 million in total assets.
3. Listed Small and Medium-sized Enterprises (SMEs), although there will be a transitional period when SMEs can opt out until 2028.
4. Non-EU companies with a net turnover of €150 million in the EU, and with at least one subsidiary or branch in the union.

If you would like to learn more about CSRD or inquire about the related course, please get in touch with Carbonology.

We’d love to hear your views and comments about the ISO Show, here’s how:

• Share the ISO Show on Twitter or Linkedin
• Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.