Reporting and Disclosure Requirements

The Corporate Sustainability Reporting Directive (CSRD) represents a fundamental expansion and tightening of sustainability reporting in the EU. It replaces the previous Non-Financial Reporting Directive (NFRD) and significantly expands both the scope and content requirements for reporting.

📋 Scope and Timeline:

500 employees (from fiscal year 2024)

250 employees (from fiscal year 2025)

150 million in the EU (from fiscal year 2028)

📊 Content Requirements:

🔍 Audit Requirements:

🌐 Digitalization Requirements:

The EU Taxonomy is a classification system for environmentally sustainable economic activities that provides companies, investors, and policymakers with clear criteria for which economic activities can be classified as "sustainable." Reporting according to the EU Taxonomy requires a structured process for identifying, assessing, and disclosing taxonomy-aligned activities.

🏢 Scope:

500 employees

🌱 The Six Environmental Objectives of the EU Taxonomy:

📊 Assessment Steps for Taxonomy Alignment:

📈 Disclosure Obligations:

The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) have become the global standard for reporting climate-related financial risks and opportunities. Effective implementation of TCFD recommendations enables companies to systematically identify, assess, and transparently communicate climate risks.

🏛 ️ Governance Structures:

🧩 Strategy and Climate Scenario Analysis:

⚙ ️ Risk Management Approach:

📊 Metrics and Targets:

3 categories

Scope

3 emissions include all indirect greenhouse gas emissions along a company's value chain that do not fall under Scope 2. They account for the majority of the carbon footprint for many companies but are particularly challenging to capture and report due to their complexity and data availability.

🔄 Value Chain Complexity:

📊 Data Quality and Availability:

3 categories

🧩 Methodological Challenges:

15 different Scope

3 categories according to GHG Protocol with different requirements

1 and 2• Uncertainties in applying emission factors and extrapolations

🌐 Influence and Control:

The concept of double materiality is a central principle in European sustainability reporting and particularly within the CSRD framework. It expands the traditional materiality concept of financial reporting with a sustainability perspective and requires consideration of materiality from two complementary perspectives.

📊 Financial Materiality:

🌍 Environmental and Social Materiality (Impact Materiality):

🔄 Interplay of Perspectives:

📋 Practical Implementation in the Reporting Process:

Global sustainability reporting is shaped by various standards that have different focuses and regional areas of application. The most important are the European Sustainability Reporting Standards (ESRS), the Global Reporting Initiative (GRI) Standards, and the International Sustainability Standards Board (ISSB) Standards.

🇪

🇺 European Sustainability Reporting Standards (ESRS):

🌐 Global Reporting Initiative (GRI) Standards:

💰 International Sustainability Standards Board (ISSB) Standards:

📋 Important Differences and Commonalities:

Efficient ESG data management is the foundation for reliable and high-quality sustainability reporting. With increasing regulatory requirements and growing importance of ESG information for stakeholders, a structured approach to collecting, processing, and reporting sustainability data is becoming increasingly important.

🏗 ️ Building a Robust Data Architecture:

📊 Data Collection and Quality Assurance:

🔄 Process Automation and Optimization:

💾 Data Storage and Management:

📱 Report Creation and Tools:

ESG ratings assess the sustainability performance of companies and are gaining increasing importance for investment decisions, cost of capital, and reputation. Strategic management of ESG ratings can therefore represent a significant competitive advantage and should be an integral part of the sustainability strategy.

📈 Importance of ESG Ratings:

🔍 Important ESG Rating Agencies and Their Characteristics:

⚙ ️ Optimizing ESG Rating Management:

📋 Systematic Process for Rating Optimization:

⚠ ️ Challenges and Limitations:

An effective sustainability reporting strategy goes beyond mere fulfillment of regulatory requirements and integrates reporting into corporate strategy, processes, and communication. A strategic approach enables synergies to be used, resources to be deployed efficiently, and the added value of reporting to be maximized.

🎯 Strategic Alignment and Goal Definition:

📋 Framework and Content Design:

👥 Organizational Integration:

🔄 Process Design and Data Strategy:

📣 Communication and Stakeholder Engagement:

The Sustainable Finance Disclosure Regulation (SFDR) or Disclosure Regulation is a central building block of the EU Action Plan for Sustainable Finance. It establishes disclosure obligations for financial market participants and financial advisors to create more transparency about the consideration of sustainability risks and factors in investment decisions.

👥 Scope:

📊 Disclosures at Company Level:

🏷 ️ Product Categorization and Requirements:

6 products: Conventional products without sustainability objectives

8 products ("Light Green"): Products promoting environmental or social characteristics

9 products ("Dark Green"): Products with explicit sustainability objective

📝 Regulatory Technical Standards (RTS):

⚠ ️ Challenges and Impacts:

The materiality analysis is the foundation of sustainability reporting and determines which ESG topics are relevant for the company and its stakeholders. A well-founded materiality analysis ensures that reporting focuses on the truly important topics and efficiently uses resources.

🎯 Understanding Double Materiality:

📋 Systematic Process for Materiality Analysis:

👥 Stakeholder Engagement:

📊 Documentation and Validation:

⚠ ️ Common Challenges:

With the introduction of CSRD, sustainability reporting is subject to mandatory external audit. Preparation for this audit requires systematic documentation, robust processes, and a clear understanding of audit requirements.

📋 Audit Requirements Under CSRD:

🏗 ️ Building an Audit-Ready System:

📊 Data Quality and Documentation:

🔄 Internal Control System (ICS):

🤝 Cooperation with Auditors:

Different stakeholder groups have different expectations and information needs regarding sustainability reporting. Effective stakeholder management requires understanding these expectations and balancing them with the company's capabilities and strategic priorities.

👥 Important Stakeholder Groups and Their Expectations:

📊 Systematic Stakeholder Analysis:

💬 Proactive Communication Strategy:

⚖ ️ Balancing Different Expectations:

🔄 Continuous Engagement:

Effective communication of sustainability information requires target group-appropriate preparation and presentation of content. Different stakeholders have different information needs, levels of knowledge, and preferred communication channels.

🎯 Target Group-Specific Communication:

📱 Multi-Channel Approach:

📊 Visualization and Storytelling:

✅ Credibility and Transparency:

🔄 Interactive Communication:

The integration of sustainability and financial reporting is a central goal of CSRD and reflects the growing recognition that ESG factors are relevant to business success. Integrated reporting creates a holistic view of corporate performance and value creation.

🔗 Connections Between Sustainability and Financial Reporting:

📋 Requirements Under CSRD:

🏗 ️ Organizational Integration:

📊 Content Integration:

💡 Benefits of Integrated Reporting:

Digital technologies offer significant opportunities to make sustainability reporting more efficient, transparent, and user-friendly. From data collection to publication, digital solutions can support the entire reporting process.

🤖 Automation and AI:

📊 ESG Data Management Platforms:

🌐 Digital Reporting Formats:

🔗 Blockchain and Verification:

📱 Stakeholder Engagement:

The Task Force on Climate-related Financial Disclosures (TCFD) has developed a framework for reporting climate-related financial risks and opportunities. These recommendations are integrated into many reporting standards, including ESRS, and are becoming increasingly important for investors.

🏛 ️ Four Pillars of TCFD:

🌡 ️ Climate Scenario Analysis:

📊 Climate-Related Metrics:

🎯 Climate Targets and Transition Plans:

💰 Financial Impacts:

Corporate Sustainability Due Diligence (CSDD), as required by the EU Corporate Sustainability Due Diligence Directive (CSDDD), requires companies to identify, prevent, and mitigate adverse impacts on human rights and the environment in their value chains. Reporting plays a central role in transparency and accountability.

📋 Reporting Requirements Under CSDDD:

🔍 Due Diligence Process:

🌐 Value Chain Perspective:

📊 Integration into Sustainability Reporting:

⚖ ️ Accountability and Transparency:

Sustainability reporting is a rapidly evolving field. New regulations, standards, and stakeholder expectations require companies to remain flexible and continuously develop their reporting. Strategic preparation for future developments is therefore essential.

🔮 Expected Developments:

3 emissions

🏗 ️ Building Flexible Structures:

📚 Capacity Building:

🔄 Continuous Improvement:

🤝 Stakeholder Engagement:

Biodiversity and ecosystem services are gaining increasing importance in sustainability reporting. The loss of biodiversity is recognized as one of the greatest global challenges alongside climate change, and companies are increasingly expected to report on their impacts and dependencies.

🌿 Importance of Biodiversity:

📋 Reporting Frameworks:

🔍 Key Reporting Elements:

📊 Metrics and Indicators:

⚠ ️ Challenges and Solutions: