Corporate sustainability reporting (CSRD)

WHAT IS CSRD?

CSRD stands for Corporate Sustainability Reporting Directive and is the European Commission's directive for sustainability reporting. From 2025, it will be mandatory for many companies to report their climate impact in accordance with this directive.

WHO IS AFFECTED BY CSRD?

CSRD affects companies within the EU or trading with the EU. Implementation of the CSRD will begin in 2025 and apply to fiscal year 2024, with full rollout by 2028 for fiscal year 2027. Companies that must comply with these reporting standards include large listed EU-based companies, large private EU companies, listed SMEs. and non-EU companies with a listed subsidiary, or a branch in the EU.

WHAT DO YOU HAVE TO DO?

Companies covered by CSRD must comply with mandatory standards for sustainability reporting, called ESRS (European Sustainability Reporting Standards). They cover environmental, social and corporate governance topics. ESRS E1, the Climate Change standard, is of  central focus within the CSRD as it pertains to all F&B businesses. Within ESRS E1, companies are mandated to report on their Scope 1, 2, and 3 emissions.

Why Scope 3 Emissions Are Crucial for Food Businesses

As much as 34% of global greenhouse gas emissions come from the food sector, highlighting the critical role food businesses play in climate action. The GHG Protocol, the standard for emissions reporting, divides emissions into three main scopes, and for food businesses, 95% of emissions typically fall under Scope 3. This makes Scope 3, and particularly Category 1 emissions from purchased goods (i.e., food and beverage procurements), the top priority for food businesses when aiming for CSRD compliance.

How Klimato Simplifies Sustainability Reporting

To ensure accuracy, we recommend using primary data from suppliers whenever possible. More food producers are now assessing and reporting the carbon footprint of their products. Klimato validates these calculations or performs them to align with global standards, so that you can use supplier data with confidence. Engaging suppliers to assess their emissions creates a collaborative path to improve data accuracy, benefiting both your business and your supply chain.