What is the Corporate Sustainability Reporting Directive (CSRD)
EU law requires all large companies and medium-sized companies (except listed micro-enterprises) to disclose what they see as the risks and opportunities arising from social and environmental issues and the impact of their activities on people and the environment.
This helps investors, civil society organisations, consumers, and other stakeholders to evaluate the sustainability performance of companies, as part of the European Green Deal.
The Corporate Sustainability Reporting Directive entered into force on the 5th of January 2023. This new EU legislation aims to accentuate the growing awareness of environmental, social, and governance factors (ESG factors). One means is moving the publication of information related to firms’ social and environmental responsibility from virtually voluntary to mandatory.
The auditing and reporting processes have been specified in the CSRD and now include the possibility of recognizing accredited Conformity Assessment Bodies (CABs) as independent assurance services providers.
Why use Accredited Conformity Assessment Bodies when implementing the CSRD?
The basis for the recognition of CABs as per CSRD, would be an accreditation as defined by Regulation (EC) No 765/2008.
Sustainability audits require the corresponding technical expertise. Accredited CABs possess expertise in the relevant fields of environmental protection, sustainability, quality, and occupational health and safety, among others.
Relevant topics, such as sustainable supply chains, climate management, protection of human rights, compliance, and overall social engagement, shall be integrated into the company’s day-to-day business processes through a standardized procedure in accordance with the EU’s terms of reference.
CABs have already been auditing their clients‘ sustainability reports for years according to the reporting standards approved within the scope of the NFRD (Non-Financial Reporting Directive). Therefore, it will be efficient for the companies affected to add further sustainability aspects to their already existing (certified) systems to benefit from the resulting synergy effects. CABs can audit such modifications/additions within a set of approved procedures.
Accredited CABs are assessed by National Accreditation Bodies regularly and therefore demonstrate the required competence of their personnel including knowledge of the industry as well as compliance requirements. This level of assurance and confirmation of competence is necessary for a well-founded/solid verification procedure and should be used to ensure a comprehensive and valuable audit result.
Since 2020, there has been an accreditation standard applicable for verification and validation available, fitting in the scope of the CSRD: EN ISO/IEC 17029: 2020 Conformity assessment – General principles and requirements for validation and verification bodies.
For several years the conformity assessment community gained valuable experience in using the predecessor standard EN ISO/IEC 14065 for the verification within the Emission Trading Scheme, closely connected to another important area of sustainability.
By applying the requirements of the standard ISO/IEC 17029, CABs would be able to start the accreditation process and offer their services to interested parties within a short period. This guarantees an international and inter-European comparability of the verification results.
What’s next?
The Commission adopted the European Sustainability Reporting Standards (ESRS) on the 31st of July 2023 for use by all companies subject to the Corporate Sustainability Reporting Directive (CSRD). This marks another step forward in the transition to a sustainable EU economy.
EA set up a Task Force Group under the EA Certification Committee (CC) to harmonise the accreditation of CABs under the CSRD.
Useful links:
https://european-accreditation.org/accreditation/for-regulators/