The lines of action in the field of Usyncro management are centered on a series of values that describe the Usyncro platform: multimodality, neutrality, interoperability, flexibility and collaboration. On the basis of these initial characteristics, it also highlights the value of operations based on ESG criteria, the first step towards the implementation of Directive (EU) 2022/2464 of the European Parliament and of the Council of December 14, 2022 regarding sustainability reporting by companies (CSRD), which is already underway.
At Usyncro, we are closely following the evolution of the CSRD directive to continue implementing KPI measurement and analysis tools that indicate “monetized” results in the improvement of management through the use of digital solutions that impact the agility, efficiency and sustainability of logistics and transportation activities. To this end, we have developed a summary of the “state of the art” of the CSRD directive and the next steps in its implementation.
This directive (Corporate Sustainability Reporting for its acronym in English), is a consequence of the #GreenDeal or. European Green Pact led by the European Commission for aligning EU climate, energy, transport and taxation policies with the objective of reducing net greenhouse gas emissions by at least 55% by 2030compared to 1990 levels.
To this end, the EU has earmarked one third of the #NextGeneration funds and has expanded them with the Sustainable Finance Action Plan, including the taxonomy The European Union (EU) Sustainable Business Act, created with the aim of becoming a cross-cutting standard for all current and future European sustainable finance regulations.
Non-Financial Disclosures and Diversity
As a prior reference to the CSRD Directive, we have to go back to Law 11/2018.of December 28, from Royal Decree-Law 18/2017 of November 24, which came to transpose into our legal system Directive 2014/95/EU of the European Parliament and of the Council of October 22, 2014, amending Directive 2013/34/EU as regards the disclosure of non-financial information and information on diversity by certain large companies and certain groups.
The Norma ley 11/2018, aimed to promote transparency, sustainability and long-term development of companies and increase the confidence of investors, consumers and society in general, through the disclosure of non-financial information.
This law established the voluntary nature of the framework and the incorporation of verifiers. The new directive introduces the necessary consistency and accountability in its application.
Corporate Sustainability Directive
This is the first time that sustainability information has been recognized as having the same value as financial information. The directive favors measurable and comparable standards. This increases the trustworthiness that financial firms, investors and individuals can have in companies and combats so-called “green washing”.
The procedure requires companies to transparently present their environmental, social and governance impacts. In addition, it promotes future European regulations that will be developed by the European Financial Reporting Advisory Group (EFRAG) with technical advice from various European agencies.
Background
In 2018, the European Parliament called for a review of the regulations on non-financial reporting as they were considered insufficient and unreliable. Following the analysis, it presented its recommendations on sustainable corporate governance in 2020. On Tuesday, April 21, 2022, the European Union reached a provisional agreement on the Corporate Sustainability Reporting Directive (CSRD), which was approved on November 28.
This amendment will affect Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No. 537/2014, with regard to corporate sustainability reporting, and Law 11/2018 on Non-Financial Reporting and Diversity in Spain.
The European Commission presented the proposal for a Directive on sustainability reporting by companies on April 21, 2021 in the framework of the European Green Deal and the Sustainable Finance Program.
The Directive will fill the gaps in existing sustainability reporting legislation. To direct private capital towards financing the ecological and social transition, financial markets need access to reliable, relevant and comparable environmental, social and governance information. As explained in the Green Pact, sustainability disclosure could attract additional investment and financing to facilitate the transition to a sustainable economy.
On February 24, 2022, EU Member States unanimously agreed on the Council’s position on the proposal for a Directive on sustainability reporting by companies.
On June 21, 2022, the Council and the European Parliament reached a provisional agreement on this Directive, which was endorsed by the representatives of the EU Member States on June 30, 2022.
The new CSRD introduces substantial sustainability-related reporting requirements, with minor variations for the different types of companies that fall within its scope. Relevant disclosures will now extend to the company’s entire value chain, including products and services, business relationships (suppliers) and the supply chain.
Who will be affected by the CSRD regulation and when?
50,000 companies (11,600 under the previous Directive) will be required to report on sustainability, including the largest companies, as well as listed SMEs, although this will be implemented on a staggered schedule:
- Companies already subject to the NFRD. That is, essentially, large EU “public interest entities” with securities listed on the regulated market, credit institutions and insurance companies with more than 500 employees. These are more than 200 companies and will be affected as of January 2024. Likewise, to parent companies of a large group, those formed by parent companies and subsidiaries included in a consolidation, which meet two of the following criteria: i) assets in excess of €20,000,000, ii) a net turnover in excess of 40,000,000 euros, and iii) an average of more than 250 employees during the year (on a consolidated basis).
- All “large” EU companies that meet two of the following criteria: i) assets in excess of €20,000,000, ii) a net turnover in excess of 40,000,000 euros, and iii) an average of more than 250 employees during the fiscal year. As of January 2025, affecting around 6,000 companies.
- Small and medium-sized publicly traded companies, with lighter disclosure requirements and the ability to opt out of reporting until 2028.
- Other EU and non-EU companies (except microenterprises) with securities listed on regulated markets in the EU. These include debt securities with denominations of less than EUR 100,000 or its equivalent that are listed on a regulated market in the EU. It should be noted that the Directive does not apply to securities listed on EU multilateral trading facilities.
- Non-EU companies, non-EU companies operating in the EU can also fall within the scope of the CSRD, regardless of whether they are listed or not, based on two scenarios.
Sustainability Advisory Committee
The Sustainability Advisory Committee is the advisory body to the Corporate Reporting Council on corporate sustainability reporting.
It is made up of experts of recognized prestige in relation to corporate information on sustainability, representing both public administrations and the different sectors involved in the preparation, use, dissemination and verification of such information. The Ministries of Justice; of Economic Affairs and Digital Transformation, through the Institute of Accounting and Auditing of Accounts; of Finance and Public Function; of Ecological Transition and Demographic Challenge are represented; the Ministries of Labor and Social Economy, of Social Rights and Agenda 2030 and of Equality must jointly appoint two representatives; the National Securities Market Commission; the Bank of Spain; the Directorate General of Insurance and Pension Funds and the General Council of Economists of Spain must be represented.
Any project or proposal for regulations or interpretations regarding corporate information on sustainability is submitted to the Sustainability Advisory Committee for deliberation.
In this sense, Europe is leading the way and Spain is leading the implementation by providing the elements that give credibility based on:
- Unique standardization already defined at European level.
- Planned verification via audit, framework with public supervision (ICAC), sanctioning framework + internal verification system.
NFRD requirements
The main novelties, with respect to the Non-Financial Reporting Directive (NFRD) and its Spanish transposition through Law 11/2018 on non-financial information currently in force, are:
More information: Companies will now be required to report:
- Specific details on its business model and strategy, with particular reference to opportunities related to sustainability, resilience and plans to ensure compatibility with the transition to a climate-neutral economy and limiting global warming to 1.5°C.
- Sustainability objectives, including, where appropriate, GHG emission reduction targets (Scope 1, 2 and 3) for 2030 and 2050 and a description of relevant progress.
- The role, experience and skills of the governing bodies in the management and oversight of sustainability issues, as well as the existence of sustainability incentives offered to such members.
- Sustainability policies implemented in the company.
- The sustainability due diligence process implemented.
- The main actual or potential adverse impacts related to its activity and value chain.
- Any actions taken to prevent, mitigate, remediate or terminate actual or potential adverse impacts, and their outcomes.
- How key sustainability risks and opportunities are identified and managed.
Dual materiality: Dual materiality is a cornerstone of the new CSRD. Sustainability information should be prepared on a dual materiality basis: companies will have to identify, based on the result of an analysis of impacts, risks and opportunities, both the impact of the company on society and the environment (impact materiality) and the impact of the company on the environment (impact materiality). Inside-out), as well as the impact of the environment, people and society in the company value in terms of access to key resources and the necessary relationships (financial materiality Outside-in).
Sustainability reporting standards: Disclosures shall be made in accordance with the European Sustainability Reporting Standards (ESRS) developed by the European Financial Reporting Advisory Group (EFRAG). The Commission will adopt the first set of standards by June 30, 2023 and will specify complementary and sectoral standards by June 30, 2024. The new Directive specifies that the new standards will try, as far as possible, to avoid imposing an administrative burden on companies, and will therefore take into account the various global sustainability reporting initiatives already in use to date. Likewise. The new Directive establishes that it must be reported in electronic format and common digital labeling for all EU companies.
Sustainability verification: Introduction of an EU-wide obligation for limited scope assurance (verification) of sustainability information, with the objective of moving to reasonable assurance in the long term (estimated for 2028). The assurance certification must come from an accredited independent auditor or certifier, ensuring that the sustainability information complies with the certification standards that have been adopted by the EU. It should be noted that, in Spain, the obligation to verify, with a limited scope, the sustainability information included in the Statement of Non-Financial Information already existed since 2018 (Law 11/2018).
Calendar
The text was approved by the Council on November 28, 2023 and entered into force 20 days after its publication in the Official Journal of the European Union.
Official Journal of the European Union
. The rules will start to apply at the beginning of 2024 and Spain, like the rest of the European Union member states, has 18 months .
