What is the ESRS?

The EU's Corporate Sustainability Reporting Directive (ESRS) mandates comprehensive sustainability reporting for large companies. It requires companies to disclose a wide range of environmental, social, and governance (ESG) information, including climate-related risks, social impacts, and governance practices. To ensure the accuracy and reliability of this information, the CSRD imposes an assurance requirement, meaning companies will need to have their sustainability reports verified by independent auditors.

What is the E.U. Corporate Sustainability Reporting Directive?

The EU's Corporate Sustainability Reporting Directive (CSRD) requires large companies, listed SMEs, and non-EU companies with significant EU activities to disclose comprehensive sustainability information. Starting in 2024, these companies must report on climate-related risks and opportunities, greenhouse gas emissions, renewable energy usage, and energy efficiency measures. The CSRD aims to improve the comparability and reliability of sustainability information across the EU.

Relationship Between ESRS and EU CSRD

The Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) work hand in hand to improve how companies report on their sustainability efforts in the EU. The EU CSRD lays out the rules and requirements for what companies need to disclose about their ESG impacts. It aims to make sustainability reporting clearer and more consistent, helping companies be accountable for their actions.

‍

On the other hand, the ESRS gives companies specific guidelines on how to report in line with the CSRD. It provides a structured approach to ensure that the information shared is comparable and reliable. Together, these initiatives are designed to create a more transparent and effective sustainability reporting system, encouraging businesses to take their corporate sustainability commitments seriously.

‍

The Upcoming Changes to CSRD and ESRS

CSRD

The CSRD will expand the scope of sustainability reporting to about 49,000 corporations and partnerships across the EU. The CSRD will introduce substantial new requirements, enforcing changes in internal processes to collect and manage extensive ESG data. This may create a considerable workload for companies, especially those with limited sustainability reporting experience. These are the key deadlines for compliance:

‍

• 2024: Public-interest companies with 500+ employees
• 2025: All large companies meeting specific balance sheet criteria
• 2026: Publicly traded SMEs and foreign companies with significant EU revenue

ESRS 

The ESRS will be mandatory starting with the 2024 fiscal year, with the first reports due in 2025. Initially, public-interest companies with over 500 employees must comply in 2024. By 2026, all large companies and capital-market-oriented small and medium-sized enterprises (SMEs) will also need to adhere to the standards. As for SMEs, they will follow simplified reporting standards that are still in development and can be implemented gradually until 2028. SMEs not subject to mandatory reporting may choose to report voluntarily.

How Flexidao Enhances Your ESRS and CSRD Reporting Efforts

‍

Navigating the complex framework of CSRD and ESRS reporting can be daunting, particularly for Scope 2 emissions, which requires detailed information on electricity supply, and a detailed inventory of renewable energy certificates to back up your claims. 

‍

Accurate reporting on electricity supply demands careful data collection and management, a process that can be resource-intensive and prone to errors when relying on traditional methods like spreadsheets. 

‍

Flexidao streamlines this process by offering businesses a comprehensive platform, designed to manage and organize their electricity data with ease. Our innovative solution allows you to effortlessly calculate emissions from electricity consumption, ensuring precise and dependable reporting on: 

‍

• Gross global Scope 2 emissions measured in metric tons CO2e. 
• Detailed breakdown of Scope 2 emissions by country, business division, facility, and subsidiary. 
• Comprehensive totals for electricity consumption segmented by region. 
• Total energy consumption figures (excluding feedstocks) in MWh. 
• Renewable electricity purchases categorized by country or region. 

‍

By using Flexidao's platform, businesses can confidently optimize their reporting processes, minimize errors, and stay compliant with the latest sustainability regulations.

‍

Learn more about how Flexidao can improve your ESRS and CSRD reporting to help empower your sustainability strategy today.

‍