With the European Union’s Corporate Sustainability Reporting Directive (CSRD) officially becoming law in January 2023, major corporations are now preparing for a significant shift in how they handle ESG reporting. Unlike voluntary reporting initiatives, CSRD requires detailed and auditable disclosures on sustainability metrics, including emissions and other material factors relevant to a company’s operations.
CSRD framework is about to affect 50,000 European companies + 10,000 international firms with large European operations by 2025. This will require a collaboration between sustainability strategy, management, and finance teams. For big players like Netflix and Pandora, this also means laying the groundwork for rigorous and transparent reporting that companies will submit in 2025.
The shift toward mandatory ESG compliance
While many companies voluntarily disclose greenhouse gas emissions and other ESG metrics, the introduction of the CSRD framework raises the stakes. In 2023, over 23,000 organizations disclosed emissions and other environmental data through CDP, representing a 24% increase over the previous year.
Under the ESG rules introduced by CSRD, companies will no longer be able to remain silent. Netflix’s chief sustainability officer, Emma Stewart, commented during Climate Week NYC, “I feel like reporting and disclosure is always top of mind for companies. This is becoming exceedingly formal and consequential. CSRD just happens to be the most demanding of all of them.” Netflix is working closely with its financial and data collection teams to ensure that they meet the new requirements.
For tech companies and others who are looking to automate sustainability reporting, an ESG reporting tool offers a solution. This can help you track key sustainability metrics and generate compliant reports effortlessly.
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Big companies are preparing for transparency
A major Jewelry company, Pandora, is also welcoming the new regulations. According to Mads Twomey-Madsen, senior vice president of communications and sustainability at Pandora, “It will require companies to provide more information about their impact and how they are impacted.” This transition means replacing estimates or assumptions about environmental impacts with hard, continuous data.
Dutch company Philips, with more than a decade of experience in integrated ESG and financial reporting, is also dedicating new resources to meet CSRD demands. Philips is managing between 800 and 1,000 data points, ensuring their processes are audit-proof.
Walking in the footsteps of giants for sustainability reporting
The experience of major companies like Netflix, Pandora, and Philips offers valuable lessons for businesses of all sizes. The key to successful CSRD compliance lies in early preparation, cross-functional collaboration, and investing in the right reporting tools.
As ESG reporting becomes increasingly regulated, companies that implement effective solutions will be better positioned to meet these challenges. Whether you’re a large multinational or an SME, IMPAKTER PRO, an AI-powered ESG tool, provides the comprehensive tools your business needs to automate sustainability reporting and ensure you meet all regulatory requirements.
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This article is referenced from CSRD: How AstraZeneca, Netflix and Pandora are preparing for Europe’s new ESG disclosure rules by Trelli.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — Cover Photo Credit: Venti Views
