The CSR Directive: Is this the EU’s solution to a lack of transparancy ?

When the EU first started talking about putting in place a new directive about sustainability reporting I thought it would be just another piece of fluff climate legislation that was meant to make themselves feel better about the work they were doing to combat the climate crisis. And to be clear we will not see the true outcomes of the implementation for a number of years to come with the companies required to report staggered over the next few years.

The one thing I did find interesting was the emphasis on verifiable data. Up until this companies have not really needed to have outside verification of the data that was being presented - if they even presented the information at all. Where this becomes tricky is when these companies are tracking their Scope 3 Emissions (defined by the US Environmental Protection Agency as the “result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain” which are things like business travel, employee commuting, waste generated) throughout the supply chain. Some types of Scope 3 emissions like business travel are easier to calculate using expense apps but things like emissions by external parties sourcing, producing, and transporting components you are using in your business are not quite so easy to track as you are relying on external parties to give you accurate information.

There is repeated mention of independent verification but I have yet to see if there is a list of trusted data verifications that can be used. Within the sustainability community there have been a lot of concerns raised over certification organizations as they do not seem to be overseen by any governments or world organizations. This allows organizations to promote their certifications without any real oversight.  This is incredibly important if the EU requires the data being included under the directive to be independently verified.

As more companies are required to report in the EU over the next few years, I think more countries outside of it will study the results and follow suit - modifying as they go to ensure accurate reporting that can be more easily verified.  One thing is for sure - this is sure to be a bumpy road for some companies more than others. Hopefully, businesses can look at their environmental impact and make changes to make for a better tomorrow.