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The Importance of CSRD for Canadian Companies
Canadian companies need to pay close attention to the Corporate Sustainability Reporting Directive (CSRD), the European Union (EU) mandate that compels companies to report on environmental, social, and governance (ESG) issues. Even if your business is not based in the EU, the CSRD could still apply, requiring you to prepare detailed sustainability reports and undergo audits.
Determine if You’re in Scope
The first step is to check whether your business falls under the CSRD’s scope. You could be required to comply if:
- Your company or its subsidiaries have securities listed on an EU-regulated market.
- Your company has a large EU subsidiary or branch.
- Your company is part of a large EU group, like a parent company or holding company.
A business is considered “large” if it meets at least two of the following three criteria on two consecutive balance sheet dates:
- Total assets exceeding €20 million.
- Net turnover over €40 million.
- An average of 250 employees.
- Understand Your Reporting Deadlines
Canadian companies subject to CSRD must publish their first report in the 2025 fiscal year. Besides disclosing their ESG data, they must also get a limited assurance audit or an independent review of the report. This necessitates early planning and organization.
Perform a Gap Analysis
If CSRD applies to you, conduct a gap analysis against the European Sustainability Reporting Standards. This analysis will help you understand which sustainability-related risks, opportunities, and metrics are crucial for your business. It will also guide your data collection efforts, which might require hundreds of specific data points.
The Benefits of Early Compliance
- Complying with the CSRD early offers several advantages:
- It integrates sustainability into your business strategy.
- It provides valuable data for decision-making.
- It clarifies the financial impacts of ESG issues.
Starting the process early can save your business from potential penalties and reputational harm. It also aligns your company with other upcoming ESG disclosure requirements from Canadian and international regulatory bodies. By improving data collection and utilizing integrated technology systems, you can ensure efficient and effective reporting, ultimately strengthening investor and stakeholder confidence in your company’s long-term value and sustainability.
The next Canada Certified Sustainability ESG Practitioner Program will take place on October 24-25 & 28, 2024. Enroll early and benefit from super early bird and group discounts!
About the Center for Sustainability and Excellence (CSE)
CSE is a boutique training and consulting firm supporting companies and organizations worldwide to improve their business performance and maximize their social, economic and environmental impact through the integration of sustainability (ESG) principles into their culture, operations and products.
As a research-based firm, CSE conducts annual Research in N.America and Europe on Sustainability Reporting Trends, analyzing Sustainability (ESG) Trends, Ratings and Performance and confirming the correlation between Sustainability and Financial results.
More than 9,500 executives, including from Google, Workday, LG Electronics, Sandia National Laboratories, NASA, Coca-Cola, Netgear, Microsoft, Oracle, the Federal Reserve Bank of New York, L’Oréal, ExxonMobil, T–Mobile, Procter & Gamble and Macy’s, have been certified as sustainability professionals with CSE.
A truly successful corporate sustainability journey unfolds when leaders and individuals embrace sustainability, seamlessly integrating it into business models and operations.
CSE is proud to be leading the Sustainability transformation of companies and organizations around the world, through specialized Certified Training Programs, Sustainability Academy online courses, and Sector-specific, Integrated Consulting Services.
We’re thrilled to have you as part of our community and look forward to supporting you on your sustainability journey.
