At first glance, it is just a new directive that means a lot of bureaucracy. The EU requirement with the more or less catchy name "Corporate Sustainability Reporting Directive" (CSRD) first of all expands the group of companies that will have to disclose their sustainability balance sheet in future. In the EU, around 50,000 companies will be affected by the directive - based on their company size and key balance sheet figures: If turnover is greater than 40 million euros or the balance sheet total is greater than 20 million euros and a company has more than 250 employees, the future means complying with the new CSRD - and this will start as early as 2024, i.e. with the reporting period for the 2023 financial year.
Sustainability: Achievement alone is no longer enough
In future, these companies will have to publish transparent and verifiable information on environmental, social and governance issues. The most exciting aspect of the new directive is the area of governance. This requires nothing more than the documentation of a target for how a company intends to operate sustainably in the future, how sustainability is anchored in corporate management and how the company actually intends to contribute to achieving the EU targets for a climate-neutral economy. This is probably the most difficult part for companies. It is no longer enough to tell the story, it is not even what has been achieved that counts, but the goal. Sustainability is finally reaching the boardroom. "For many years, sustainability was seen as an expensive extra expense and was therefore rejected. The compulsion to deal with reporting and, above all, with all the analyses in the run-up to the reports will open the eyes of many company managers. Because suddenly it becomes clear that sustainability can save a lot of money. I always say: sustainability means reducing waste and therefore saving these costs. But it also means work - which should be delegated to one or two people in charge and who also need the time to do it," says Pacoon Managing Director Peter Désilets.
Stumbling block supply chains
The integration of internal and external stakeholders into the reporting obligation also poses the threat of increased effort: in future, for example, supply chains will have to be scrutinised and suppliers checked according to sustainability criteria. For packaging manufacturers in particular, with their long value chains and many raw material suppliers, this can be an extremely arduous task and in some cases may even lead to the need to find new suppliers. Producers of products and packaging now also have the task of calculating their product carbon footprint. This is because the supply chain also wants to understand and factor in the impact of upstream and downstream services - the so-called Scope 3. There is a lot of work to be done, but there is also the opportunity to become a preferred partner if you have this data ready," says Désilets about the economic upside of dealing with CSRD. This will increase the pressure on many packaging manufacturers and producers to be more accountable to their customers, such as large FMCG manufacturers or retailers. Even if there are currently clear limits as to when companies are required to report under CSRD, the directive will have a much wider impact. Small and medium-sized enterprises, the administrative by-catch of the directive, so to speak, are currently feeling overwhelmed by this: 40 per cent of German SMEs, which are not yet directly affected by the directive, feel under pressure from their customers to strive for more sustainable corporate governance. When the CSRD directive comes into force in 2024 and many companies start scrutinising their supply chains, this figure is likely to rise even further.
Companies see themselves as ill-prepared for CSRD
But anyone who thinks that only SMEs are feeling the pressure is very much mistaken. Even companies that are directly affected by the new EU regulations and already have experience with CSR reports due to their size are probably not particularly well prepared. According to a study by software company ARAS, three out of four industrial companies in Europe consider themselves to be poorly prepared, with a third of them mainly due to a lack of data. "The interesting thing is that you don't need any data for a general company analysis - but most of them don't even know that. But how are you supposed to translate your status quo into comparable figures?" Peter Désilets draws attention to a largely unknown detail.
Automated creation of sustainability reports
Pacoon, which is particularly passionate about the transformation towards greater sustainability in the packaging market, is now marketing a web-based software tool that makes data preparation along the supply chain much easier and transfers it into data: BeGaMo® Sustainability is the world's first all-in-one software tool that takes a holistic approach to preparing sustainability data in a transparent and legally compliant manner and then automatically incorporating this data into sustainability reporting. For example, the particularly difficult stakeholder analyses can be created automatically or the actual carbon footprint in Scope 1, 2 and 3 (upstream and downstream) can be determined using the tool and then checked for plausibility.
This achieves a degree of automation of 80 per cent, with only 20 per cent of the necessary data, such as targets or corporate strategy, having to be defined and entered manually. BeGaMo® pursues an approach that is more than just software: BeGaMo® is an overall concept that saves companies a lot of time and resources.
"We find the holistic concept of the tool and the simplicity of the application so exciting that we immediately agreed to become a sales partner. The web tool also offers the option of using the software quickly without the need for lengthy integration into the company's own IT system. This means that the basic analysis can be carried out in a short space of time in order to subsequently define target-oriented steps such as target definition, strategy, measures and KPIs. The perfect basis for comprehensive consulting and for building up knowledge within the company itself - training on the job, so to speak," says Désilets.
Join us to take a look at the new possibilities of sustainability reporting with BeGaMo® Sustainability. At our webinar on 18 January 2024. Find out here what we have prepared for you and register now.