CSRD: Why the EU’s sustainability reforms are important for your company’s environmental initiatives
Companies across the world, from the biggest brands or small independents, are keen to advertise how they are trying to achieve their climate goals and protect the environment. As you may know, millions are paid annually to climate protection organisations to compensate for the emissions that companies emit, and each tonne of CO2 is sold as a CO2 certificate.
This is often managed by Verra, who promise that CO2 will be saved and oversee various certificates, such as for solar systems, hydropower, and forest conservation. Issuing CO2 certificates is a billion-dollar business. However it was recently revealed that for years, CO2 certificates had been issued but should never have been sold in the first place. It appeared that forest protection organisations had significantly overestimated the extent of their CO2 compensation. This oversight was unfortunately possible under Verra’s guidelines.
For quite some time, it had not been mandatory for companies to provide information about their sustainability measures. However, last year, the EU adopted a directive to instruct companies on how to best conduct sustainability reporting. The Corporate Sustainability Reporting Directive (CSRD) will gradually require companies to submit an annual sustainability report in the form of a tiered model.
Companies often like to highlight the efforts and initiatives they have put in place protect the environment, while aspects of their operations that are not so eco-friendly are perhaps more likely to go unsaid. This will become more difficult from next year in the EU, as the new directive has clear guidelines that must be met. By not being transparent, organisations risk damaging their reputations.
With this in mind, it is worthwhile for companies to implement processes now that will meet CSRD. First, somebody should be given responsibility for corporate social responsibility (CSR) issues, then internal communications departments, and even a PR agency, can provide additional support.
Establish workflows and trust in CSR expertise
To ensure your company remains transparent, the directive recommends establishing a workflow – such as scheduling regular meetings between CSR teams and stakeholders. Keeping track of complex CO2 emissions requires a lot of data and organisation, especially if anybody from outside of your company is going to be able to understand it, so investment in specified software and support from external experts may be come in handy.
Successfully communicating sustainability efforts
But the work does not end here. It is important to show the direction your company wants to travel in. Is a concrete strategy being pursued to optimise products and processes with sustainability in mind? What values is the company working towards in the next five to 10 years? Companies should show ambition, while still being realistic. Overly ambitious goals that cannot be achieved ultimately damage credibility.
Instead, the sustainability data should be prepared in a way so that is comparable to progress being made over several years and remain clear to anybody who may wish to read it. If the challenges are clearly addressed and the next steps are well communicated, your company’s credibility will be strengthened both internally with employees and externally with customers and stakeholders.
To bring a company’s sustainability efforts and success to fruition, they must reach your target audiences. PR agencies can help here thanks to their knowledge of what is a broad media landscape. Agencies have far-reaching networks to identify which press and social media channels are best to reach who you want to speak to by showing the true news value of your CSR initiatives and how best to communicate them.
If your organisation operates within the EU, then taking steps now will help you be in a great position for when CSRD comes in effect in 2024.