top of page
Hell grüne Climcycle Welle

Fundamentals

This category deals with all disclosure requirements in connection with the company's impact on the environment.

What is the CSRD & ESRS?

The Corporate Sustainability Reporting Directive (CSRD) is a directive introduced by the European Commission that obliges companies to report on sustainability and the European Sustainability Reporting Standards (ESRS) specify exactly how reporting must be structured.

 

THE CSRD THEREFORE SAYS WHAT HAS TO BE DONE AND THE ESRS HOW EXACTLY IT HAS TO BE DONE.

Who is affected?

A company must fulfill the requirements of the CSRD and ESRS if it meets two of the three criteria:

  • Balance sheet total > 20 million euros

  • Net sales > 40 million euros

  • Number of employees > 250

 

31.12.2024 is the reporting date for the 11,000 largest companies in the European Union.

What do you need to do now?

1. materiality analysis

The first step is to carry out a materiality analysis in accordance with the principle of dual materiality. According to this principle, an asset is classified as material if it gives rise to financial opportunities or risks (outside-in) or if it has a significant impact on people and the environment (inside-out).

 

A TOPIC IS THEREFORE ALSO REPORTABLE IF IT IS ONLY CLASSIFIED AS MATERIAL FROM ONE OF THE TWO PERSPECTIVES.

 

2. reporting in accordance with ESRS

Disclosure of key figures for material categories

 

The entire ESRS is based on the results of the materiality analysis and specifies which key figures must be reported. Thus, the materiality analysis is the core of the ESRS and as we know there is no valid CSRD without ESRS. In order to be able to carry out a comprehensive assessment, an understandable plan must be drawn up as to how this assessment should be structured and we will show you how.

Structure of the materiality assessment

Understanding the contextTo better understand the impacts, the company analyzes its activities, business relationships and stakeholder interests.

Identifying impactsThe company must consider actual and potential impacts (positive & negative) through double materiality (outside-in, inside-out) as well as stakeholder and scientific research.

 

Assessment of materialityThreshold values are used to determine which impacts should be included in the sustainability statement and must be determined by the company itself.

The principle of dual materiality

The principle of dual materiality (inside-out, outside-in) is used to determine the materiality of a company's assets and, in the course of this, to provide information on which environmental, social or regulatory factors must be disclosed. An asset must be reported if either the outside-in and/or inside-out dimension is classified as material.

Threshold values

The thresholds must be used to determine the materiality of a company's assets. Key categories for the compilation of thresholds:

  • Probability of occurrence

  • Potential extent of the impact

  • Relevance for the company

  • Industry standards and practices

  • Interests of the stakeholders

 

All thresholds must be defined for both risks and opportunities.

 

A CONSISTENT APPROACH TO SETTING THRESHOLDS IS ESSENTIAL AS IT CONTRIBUTES SIGNIFICANTLY TO COMPARABILITY.

ESRS Category Structure

We guide you through the process of materiality assessment and disclosure for each (sub)category and show you which key figures must be disclosed in the case of materiality and what you must do in the case of immateriality.The materiality of an asset must be assessed in all subcategories without exception.

The structure of the categories is as follows:

1 ASSET IS ANALYZED IN 3 CATEGORIES, WHICH CONSIST OF 10 SUBCATEGORIES, USING 2 PERSPECTIVES (OUTSIDE-IN, INSIDE-OUT) FOR IT'S MATERIALITY

ESRS Categories

A bird's eye view of a forest road

Environment

This category deals with all disclosure requirements in connection with the company's impact on the environment.

Asian family carrying unripe banana stalks on their backs

Social

This category deals with all disclosure obligations related to the working conditions of a company's employees.

the right arm of a male pilot controlling the airplane with the stick

Governance

This category deals with all disclosure obligations in connection with the management and control of the company.

Taking sustainable paths

Climcycle can be used in the front and back office. We support you during implementation and use with experienced consultants and experts.

Smartphone with Climcycle Software Dashboard
bottom of page