Name: CSRD and mounting corporate regulations in Europe
Uploaded: 2024-02-29T16:04:21.076Z
Duration: 426.96

CSRD V4_Final.mp4

CSRD V3.vtt

English

{{00:00:00}}
If your big partners feel that you're a

{{00:00:04}}
may actually cease doing any operations
with you, which would be a bit of a shame.

{{00:00:14}}
The CSRD is the Corporate Sustainability
Reporting Directive, which is the EU's

{{00:00:19}}
aspiration to ask larger companies to
report on a lot of different type of

{{00:00:24}}
sustainability metrics from emissions to
value chain to diversity and inclusion.

{{00:00:30}}
They are making it mandatory for companies
over a certain size to report them

{{00:00:35}}
in their annual financial statement.

{{00:00:37}}
The ISSB is the International
Sustainability Standards Board and

{{00:00:40}}
it's a sub arm of the international
board that sets all of the accounting

{{00:00:45}}
regulations across the world.

{{00:00:47}}
Now they're not actually a government,
so they don't have any jurisdiction,

{{00:00:50}}
but they are often endorsed by
governments around the world.

{{00:00:53}}
So for example, the UK is planning on
hopefully endorsing, these standards

{{00:00:57}}
that they're coming out with in July
this year, which is really exciting.

{{00:01:00}}
Now what that means for, organisations
is large organisations, usually over

{{00:01:05}}
about sort of 40 million or 150 million,
depending on the  type of organisation

{{00:01:10}}
will have to report on emissions
and other sustainability metrics.

{{00:01:18}}
SMEs do need to be concerned
about these new regulations for

{{00:01:20}}
a couple of different reasons.

{{00:01:22}}
Both the ISSB and the CSRD regulations
are encompassing scope three,

{{00:01:28}}
which is a carbon ish term, but it
basically means the entire value

{{00:01:31}}
chain for these large companies.

{{00:01:34}}
And obviously if you think about the value
chains, both the upstream, so thinking

{{00:01:37}}
about some of the components that you
might buy or you might sell to these

{{00:01:40}}
large companies, or the downstream where
you might buy some of their services.

{{00:01:47}}
If you're in that value chain, they
also have to report on you, which is

{{00:01:51}}
very exciting, slightly scary because
there's a lot of work to do, but

{{00:01:55}}
has some really wonderful challenges
and opportunities as part of it.

{{00:01:58}}
Obviously, you have to find that data and
report on it in a way that the company

{{00:02:02}}
that's asking you to report can use.

{{00:02:05}}
So, for example, you might need to
find out what the life cycle emissions

{{00:02:08}}
of a product that you sell them is.

{{00:02:09}}
Or you might need to understand your
entire value chain and the risks that are

{{00:02:14}}
coming down that value chain, for example,
from any mining that you might do.

{{00:02:17}}
The opportunities are also very exciting
because you get to sort of, have a full

{{00:02:22}}
view of your own value chain, which is
wonderful, work really closely with these

{{00:02:26}}
large corporations, and often they'll
actually give you a little bit of help.

{{00:02:30}}
So they'll help you with strategy
or frameworks or potentially even

{{00:02:33}}
support you financially to bring this
data to help them do the reporting.

{{00:02:37}}
The example that I think is a good one
to sort of show you is if you think

{{00:02:41}}
about Audi, the car manufacturer,
they buy the leather that they

{{00:02:45}}
use in their cars for their seats
from small tanneries in, Italy.

{{00:02:50}}
They're now going to have to ask
those tanneries to, collect a

{{00:02:53}}
number of different data points
about their own activities so

{{00:02:56}}
that Audi can report to the EU.

{{00:02:58}}
For example, they'll be looking
at the welfare of the animals

{{00:03:00}}
that are used to make the leather.

{{00:03:02}}
They'll be looking at the emissions
from the products themselves.

{{00:03:05}}
And they'll be looking at the
protections for the employees

{{00:03:08}}
that are making the leather; are
they protecting from chemicals?

{{00:03:12}}
Are they paid fairly?

{{00:03:13}}
Do they have good working hours?

{{00:03:14}}
If you can provide that data, voluntarily
or even above and beyond what Audi

{{00:03:20}}
are looking for, Audi will love to
work with that tannery, they'll be

{{00:03:23}}
really excited about working with them
and sort of have a very smooth and

{{00:03:27}}
possibly even advantageous relationship.

{{00:03:32}}
So time periods are going to be
really important and it'll be phased

{{00:03:36}}
in over the next four or so years.

{{00:03:38}}
Right now, in 2024, it's only sort
of the largest corporations that have

{{00:03:43}}
already been reporting under some of the
previous EU sustainability directives

{{00:03:47}}
that will be affected, but increasingly
between now and 2024 and 2028, there'll

{{00:03:52}}
be more and more organisations that
will be affected, including some listed

{{00:03:56}}
small businesses that will actually be
asked to report from 2026 into 2028.

{{00:04:01}}
What that means, though, with regards
to when you should start collecting

{{00:04:05}}
data is actually you should start
collecting data as soon as possible

{{00:04:09}}
for a couple of different reasons.

{{00:04:11}}
First of all, obviously, to help,
your organisations that will be

{{00:04:15}}
asking to report on their own
timelines, but also from the point

{{00:04:18}}
of view of the quality of the data.

{{00:04:19}}
Data is generally collected best in
a live situation, so the emissions

{{00:04:23}}
coming in right now, you're
collecting those, keeping a record

{{00:04:26}}
of them, et cetera, et cetera.

{{00:04:27}}
And so if you can create a sort
of  auditable trail in a live way

{{00:04:32}}
of collecting that data, then it'll
be much more valuable for your, for

{{00:04:37}}
your partners later down the line.

{{00:04:42}}
So if you're thinking about this as
an SME, there's a number of different

{{00:04:45}}
things that I would recommend.

{{00:04:46}}
The first thing is working out whether,
who in your value chain is affected.

{{00:04:51}}
So who are your partners who
are going to be affected by

{{00:04:54}}
these different regulations?

{{00:04:55}}
So if you're working with partners in the
EU or even partners who have significant

{{00:05:00}}
revenue in the EU, or as I said before,
in the UK, when they're thinking about

{{00:05:05}}
bringing in the ISSB regulations, do a
review of your entire value chain and

{{00:05:09}}
work out who's going to be affected.

{{00:05:11}}
Gold star would go to those who then think
about what's material to those, partners.

{{00:05:16}}
So if they are thinking about mining,
is it emissions and materials and water?

{{00:05:21}}
If  you're thinking about a labour
supply chain, is it risks and

{{00:05:26}}
forced labor and age regulations?

{{00:05:32}}
Obviously if your big partners
feel that you're a vulnerability in

{{00:05:36}}
their value chain, they may actually
cease doing any operations with you,

{{00:05:39}}
which would be a bit of a shame.

{{00:05:41}}
Obviously there is a wide spectrum there,
you know, they might just reduce the

{{00:05:44}}
amount of work with you or they might
try and sort of enforce regulations upon

{{00:05:48}}
you by fining you or asking you to do
extra work, especially if you haven't

{{00:05:51}}
sort of come forward and volunteered on
the timeline that they're looking for.

{{00:05:55}}
As part of both, especially
the CSRD, there is also the

{{00:05:58}}
risk of liability as well.

{{00:06:00}}
So one of the things that the EU is
asking its member states to do is put

{{00:06:04}}
in regulations and civil liability
opportunities for those who feel

{{00:06:08}}
like they are not being supported.

{{00:06:11}}
Small business is quite unlikely to be
sued as part of that, but they might

{{00:06:15}}
be part of a broader lawsuit that
comes against your bigger partners.

{{00:06:18}}
But, you know, that's all very negative.

{{00:06:19}}
And thinking about the sort of what's
gonna happen if we don't do it.

{{00:06:22}}
There's also a lot of opportunity if
you get ahead of the curve and do do it.

{{00:06:25}}
Oxford says that the, the green economy
is probably going to be worth around $3

{{00:06:29}}
trillion worldwide, probably by 2050,
which is wonderful if you could get a

{{00:06:34}}
bite of that pie already by showcasing,
you know, your reduced emissions or

{{00:06:38}}
your better supply chain or how you

{{00:06:41}}
driving efficiencies in, in the areas that
we're looking for, you know, you become

{{00:06:44}}
more competitive, be able to apply for
more grants, more sustainability help and

{{00:06:50}}
really sort of take the bull by the horns
by, by leading your industry and, and

{{00:06:54}}
complying with these regulations, which
are pushing us along, but also, opening

{{00:06:58}}
up lots of great opportunities too.

may actually cease doing any operations
with you, which would be a bit of a shame.

The CSRD is the Corporate Sustainability
Reporting Directive, which is the EU's

aspiration to ask larger companies to
report on a lot of different type of

sustainability metrics from emissions to
value chain to diversity and inclusion.

They are making it mandatory for companies
over a certain size to report them

The ISSB is the International
Sustainability Standards Board and

it's a sub arm of the international
board that sets all of the accounting

Now they're not actually a government,
so they don't have any jurisdiction,

but they are often endorsed by
governments around the world.

So for example, the UK is planning on
hopefully endorsing, these standards

that they're coming out with in July
this year, which is really exciting.

Now what that means for, organisations
is large organisations, usually over

about sort of 40 million or 150 million,
depending on the  type of organisation

will have to report on emissions
and other sustainability metrics.

SMEs do need to be concerned
about these new regulations for

Both the ISSB and the CSRD regulations
are encompassing scope three,

which is a carbon ish term, but it
basically means the entire value

And obviously if you think about the value
chains, both the upstream, so thinking

about some of the components that you
might buy or you might sell to these

large companies, or the downstream where
you might buy some of their services.

If you're in that value chain, they
also have to report on you, which is

very exciting, slightly scary because
there's a lot of work to do, but

has some really wonderful challenges
and opportunities as part of it.

Obviously, you have to find that data and
report on it in a way that the company

So, for example, you might need to
find out what the life cycle emissions

Or you might need to understand your
entire value chain and the risks that are

coming down that value chain, for example,
from any mining that you might do.

The opportunities are also very exciting
because you get to sort of, have a full

view of your own value chain, which is
wonderful, work really closely with these

large corporations, and often they'll
actually give you a little bit of help.

So they'll help you with strategy
or frameworks or potentially even

support you financially to bring this
data to help them do the reporting.

The example that I think is a good one
to sort of show you is if you think

about Audi, the car manufacturer,
they buy the leather that they

use in their cars for their seats
from small tanneries in, Italy.

They're now going to have to ask
those tanneries to, collect a

number of different data points
about their own activities so

For example, they'll be looking
at the welfare of the animals

They'll be looking at the emissions
from the products themselves.

And they'll be looking at the
protections for the employees

that are making the leather; are
they protecting from chemicals?

If you can provide that data, voluntarily
or even above and beyond what Audi

are looking for, Audi will love to
work with that tannery, they'll be

really excited about working with them
and sort of have a very smooth and

So time periods are going to be
really important and it'll be phased

Right now, in 2024, it's only sort
of the largest corporations that have

already been reporting under some of the
previous EU sustainability directives

that will be affected, but increasingly
between now and 2024 and 2028, there'll

be more and more organisations that
will be affected, including some listed

small businesses that will actually be
asked to report from 2026 into 2028.

What that means, though, with regards
to when you should start collecting

data is actually you should start
collecting data as soon as possible

First of all, obviously, to help,
your organisations that will be

asking to report on their own
timelines, but also from the point

Data is generally collected best in
a live situation, so the emissions

coming in right now, you're
collecting those, keeping a record

And so if you can create a sort
of  auditable trail in a live way

of collecting that data, then it'll
be much more valuable for your, for

So if you're thinking about this as
an SME, there's a number of different

The first thing is working out whether,
who in your value chain is affected.

So who are your partners who
are going to be affected by

So if you're working with partners in the
EU or even partners who have significant

revenue in the EU, or as I said before,
in the UK, when they're thinking about

bringing in the ISSB regulations, do a
review of your entire value chain and

Gold star would go to those who then think
about what's material to those, partners.

So if they are thinking about mining,
is it emissions and materials and water?

If  you're thinking about a labour
supply chain, is it risks and

Obviously if your big partners
feel that you're a vulnerability in

their value chain, they may actually
cease doing any operations with you,

Obviously there is a wide spectrum there,
you know, they might just reduce the

amount of work with you or they might
try and sort of enforce regulations upon

you by fining you or asking you to do
extra work, especially if you haven't

sort of come forward and volunteered on
the timeline that they're looking for.

As part of both, especially
the CSRD, there is also the

So one of the things that the EU is
asking its member states to do is put

in regulations and civil liability
opportunities for those who feel

Trend

New sustainability initiatives like the CSRD and ISSB continue to encourage businesses to be more green, but sustainability reporting can be a costly and complex consideration for small businesses. 
In this video, Sarah Moneypenny, Founder of UK SustainAbility, untangles some of the 'alphabet soup' of corporate sustainability regulations. With the green economy set to be worth $3 trillion globally by 2050, such initiatives can actually give SMEs the 'green' light for accelerated growth. 

Scope 3

medium_Sarah Moneypenny.jpeg

small_Sarah Moneypenny.jpeg

thumbnail_Sarah Moneypenny.jpeg

xsmall_Sarah Moneypenny.jpeg

Sarah Moneypenny.jpeg

Sarah Moneypenny

Discover insights from other experts

Founder

Sarah starts by explaining two key upcoming regulations - the CSRD and the ISSB.


Untangling 'alphabet soup': CSRD and ISSB

Whilst large organisations are directly affected by this legislation, SMEs need to stay ahead too. Listen to learn why. 


The impact on businesses

Understand why working closely with larger organisations to report on your sustainability efforts can have huge rewards.


The opportunities

Moneypenny details the timeline of implementation for new reporting regulations.


When do these regulations take hold?

Moneypenny recommends a few different starting points to get ahead of these regulations now.
