#CSRD reporting is coming fast, so I wanted to share some light on how we deal with this type of regulation at Responsibly.
💡 Quick recap for those who don't know: CSRD = Corporate Sustainability Reporting Directive - a major piece of upcoming EU regulation that has sustainability professionals pulling their hair out. It essentially broadens the sustainability reporting requirements for EU companies.
A big part of the update in regulation is how it requires stronger processes and reporting on supply chain sustainability - which is where we come in!
So here's how we approach it:
1️⃣ These kind of regulations come with very long, fairly complex, and frankly quite boring documentation that rarely is black and white, and that quickly ends up in vague guidance - hence the "pulling your hair out" bit.
Therefore, step 1 is always untangling this and boiling it down to the very concrete requirements.
So CSRD = ESRS = Specific reporting standards = Specific disclosure requirements 😴
Each of these we analyze to understand the specific ESG topic is being discussed - e.g. no vague "human rights" but "child labor", no vague "environmental management" but "soil pollution", and the specific supply chain requirements for that topic.
Since CSRD is a reporting directive and not a supply chain due diligence directive (like hashtag#LkSG or #CSDDD - I know, 💤 ), the supply chain requirements will vary from "simply" having to describe in your reporting how you manage the process around mitigating a supply chain esg risk (E.g. "We use Responsibly 😎🥇") to concrete measures that need to be extracted from your supply chain and included in the report.
Step 1 is untangling that so we know specifically what needs to be done.
2️⃣ Step 2 is then ensuring we get this expertise into the product. That has a few different implications:
First, we need to ensure our risk database and esg topics cover the specific regulatory topics exactly.
Second, we want to ensure we collect the right information to produce the reporting required for the regulation.
This could include updating our primary data collecting, or coding new "mitigation" rules into the system.
Third, sometimes we need additional functionality to help the customer comply holistically - e.g. the German Supply Chain Act (LkSG) needed a whistleblower system for suppliers.
3️⃣ We want to get our understanding validated by an independent third party, to ensure we guide our customers in the best possible way.
We therefore typically work with top legal agencies - like Noerr for the LkSG - to get their expertise and feedback on the solution.
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So to summarize = lots of work to codify every piece of supply chain esg regulation, to ensure you can work across legislation and esg goals without pulling your hair out.
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