![]() Increased transparency is enshrined in the CSRD. Robust data on scope 3 emissions and the 'double materiality' will better stand up to the scrutiny of investors, among others, who want to know how their investee companies can not only survive but The actual emissions being measured and reported are now broader in scope, too, and reporting must include value chain emissions, commonly known as scope 3 – in addition to scopes 1 and 2 – in order to capture the impact of a company's upstream and downstream activities, but also possible areas of risk. They'll also need to go through a third-party audit on their reporting as part of the CSRD's push to create high-quality, reliable reporting. The climate crisis won't be solved by short-term solutions and the CSRD recognises this long-term outlook: companies must now set long-term ESG targets and baselines and show consistent progress toward meeting these goals. ![]() This is a great chance to show a company's positive steps toward addressing its impact on the environment – improving investor confidence and aligning with other stakeholders' expectations around clear, objective reporting – and creating a positive, sustainable future. The CSRD means companies are now bound by law to disclose their impacts transparently and consistently, reducing the risk of greenwashing. While this represents a greater reporting burden, the shift is a crucial step forwards for safeguarding biodiversity and human rights. What to report is described in European sustainability reporting standards (ESRS) drafts: a set of more than 20 detailed standard documents. ![]() This means a more complex reporting process than many companies are used to: corporate entities will need to disclose future and retrospective information while extending the scope to include the entire value chain. This means that companies will now have to report on how their business is financially impacted by climate change (financial materiality), in addition to identifying their impact on people and the environment (impact materiality). However, one of the most important changes is the concept of 'double materiality'. Here) as part of the European Green Deal. The new directive builds on previous regulation (read our 'Hitchhiker's Guide to the EU Taxonomy & SFDR
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