The CSRD (Corporate Sustainability Reporting Directive) represents a major step forward in extra-financial reporting in Europe. Adopted to strengthen corporate transparency and sustainability, it imposes new obligations in terms of ESG (Environment, Social, Governance) reporting. France recently transposed this directive, marking a significant turning point for French companies. This article aims to explain the main components of this transposition, the companies concerned, the reporting obligations and benefits, as well as the associated challenges.
1. Publication of the transposition order
2. Companies concerned by CSRD
3. Reporting obligations and certification
4. Benefits and challenges of compliance
The CSRD directive was transposed into French law by Ordinance no. 2023-703, published on July 26, 2023. This ordinance establishes the regulatory frameworks needed to bring French non-financial reporting practices into line with European requirements. It aims to ensure that companies provide transparent and comparable information on their ESG performance, thereby facilitating investor decision-making and corporate accountability. This initiative is part of a wider movement to strengthen sustainability and transparency at European level, contributing to the transition to a greener, more inclusive economy.
The transposition of this directive in France is a response to European Union requirements to harmonize ESG reporting practices across member states. By adopting this ordinance, France is ensuring that its companies comply with the same standards as their European counterparts, thus facilitating cross-border comparisons and investments.
The main aim of the CSRD is to improve the quality and comparability of companies' ESG reports. It aims to :
Enhance transparency: by requiring detailed, standardized reporting on ESG performance.
Increase accountability: By imposing reporting obligations on companies of all sizes, including listed SMEs and subsidiaries of non-European companies.
Facilitating the transition to a sustainable economy: By encouraging companies to adopt more sustainable and responsible practices.
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This directive applies to companies that meet at least two of the following criteria: they have more than 250 employees and their balance sheet exceeds €25 million. It also applies to listed companies, including listed SMEs. In addition, European subsidiaries of international groups may be affected, as may certain non-European companies with significant activities in the EU, if they exceed certain activity thresholds. Overall, in Europe, the number of companies affected will rise from around 5,000 to 7,000 to 50,000, representing a significant increase.
Sustainability reports required by the CSRD must include detailed information on companies' environmental, social and governance performance. This includes:
Environmental performance: Greenhouse gas emissions, resource management, sustainability initiatives.
Social performance: Working conditions, diversity and inclusion, community involvement.
Governance performance: Board structure, financial transparency, anti-corruption.
Companies will be required to provide quantitative and qualitative data, enabling a comprehensive assessment of their sustainability commitments and progress. This includes specific Key Performance Indicators (KPIs) for each ESG area, as well as descriptions of the policies and actions put in place to achieve their objectives.
One of the major requirements of the CSRD is the certification of sustainability reports by an independent third party. This certification is intended to guarantee the reliability and credibility of published information, thereby strengthening the confidence of investors and other stakeholders. Certification bodies will have to be accredited and meet strict criteria to ensure the quality of the audits carried out.
Independent certification is crucial to prevent the risk of greenwashing, where companies may exaggerate or falsify their sustainability progress. By ensuring that information is verified by external experts, CSRD aims to increase the credibility of ESG reports and guarantee that companies respect their commitments.
Compliance with the CSRD offers several benefits to companies, including:
Improved transparency: Comprehensive ESG reporting enhances investor and consumer confidence.
Risk reduction: Better management of environmental and social risks.
Access to sustainable finance: ESG-compliant companies can attract responsible investment.
Competitive advantage: Companies that quickly comply with new standards can position themselves as leaders in sustainability.
By adopting sustainable practices, companies can also benefit from a better reputation and increased loyalty from their customers, who are increasingly sensitive to environmental and social issues.
Despite the benefits, CSRD compliance also presents challenges and costs for companies:
Reporting complexity: Collecting and presenting ESG data can be complex and require additional resources.
Certification costs: Independent third-party auditing involves additional financial costs.
Change management: Companies must adapt their internal processes to comply with new requirements.
Training and awareness-raising: It is crucial to train internal teams in the new requirements and to raise awareness of ESG issues among all employees.
Whether you're a company looking to comply with the new requirements of the CSRD directive, or a specialist sustainability consultant, FocusTribes is here to help. We support companies in preparing and implementing detailed extra-financial reports in line with European standards. In addition, we help sustainability consultants find assignments that match their skills.
Whether you need to recruit CSRD compliance experts or find freelance opportunities, FocusTribes is here to support you throughout your sustainability reporting project.
