All major companies operating in the European Union will be required to make available information on the effects of their activities on people and the environment, along with identification of potential sustainability risks to which they are subject. What is the New CSRD?
The new CSRD introduces fresh regulations that significantly expand the number of companies in the European Union required to report on environmental protection, social responsibility and respect for human rights. They are based on criteria in line with European Union climate goals. As a result, significant changes are being made to both the subject matter and the entities covered. Member states have 18 months to implement the provisions of the directive into their national legal order. The new regulation will replace the NFRD Directive currently in effect , imposing more stringent requirements on a much broader group of operators than before.
Who will be affected by the new directive?
The requirements of the CSRD will apply to all large public companies. Implementation will take place in three stages. The CSRD sets deadlines by which companies will be required to implement mandatory sustainability reporting:
When will the new directive take effect and what changes will it bring?
The first report under the new guidelines should cover the fiscal year beginning on or after January 1, 2024. The largest entities that currently report on non-financial information (in accordance with the Accounting Act) will be the first to disclose their data for 2024, and will do so in 2025. In the following year, the reporting procedure will begin for the remaining large units. Small and medium-sized listed companies, on the other hand, will publish their information in 2027.
How should entrepreneurs prepare?
Businesses should start preparing now for the effective implementation of the CSRD to avoid potential internal difficulties that may hinder the adaptation process. Make sure that as an entrepreneur you are prepared. Here are some steps that can help you ensure a smooth transition:
- Scope Analysis – Carefully analyze the scope and impact of the CSRD on your company. Identify which elements need to be adjusted and what new requirements will be imposed;
- Process Evaluation – review current processes related to financial reporting and data management. Identify which of these processes will need to be adapted to the new requirements;
- Human Resources – make sure you have adequate human resources to manage the implementation of the directive. It may be necessary to train or hire specialists in the area of new regulations;
- Technology and Systems – Update your financial reporting systems and tools to comply with new requirements. This may include implementing software to generate reports that meet CSRD standards;
- Action Plan – create a detailed action plan, specifying who is responsible for each stage of implementation. Set a schedule for action and monitor progress.
- External Consultation – if necessary, use experts or consultants who specialize in new financial regulations for support and guidance on successful implementation.
- Employee Training – organize training for your team to familiarize them with the new CSRD requirements and procedures. Employee knowledge is key to proper implementation.
- Testing and Monitoring – conduct internal testing to ensure that new processes and systems are working properly and are compliant with the directive. Also plan monitoring mechanisms to maintain compliance in the future.
- Documentation – be sure to accurately document all implementation steps and changes made in the company related to CSRD. This will help with possible audits and inspections.
- External Communications – keep your stakeholders, such as investors and customers, informed about preparations for CSRD implementation and changes that may affect your relationship with them.
Starting these activities in a timely manner can help your company avoid unnecessary complications during CSRD implementation.
Enterprise solution for real-time water quality control – Spectrally
The directive will introduce due diligence obligations with regard to respect for human rights and environmental issues for certain groups of companies, meaning that these companies will be forced to implement monitoring and control of waste. The solution from Spectrally, a new deeptech startup, will allow them to monitor in real time the quality of water waste produced by companies. 
The easy-to-use device is intended to be a solution for companies covered by the new CSRD. The measuring device, the heart of which is a Raman spectrometer, can be connected in parallel to a waste pipe anywhere in the system.
The device will comply with the requirements related to the CSRD.
Implementation of the CSRD will gradually take place from January 1, 2024.