An organisation that is effectively working towards Environmental, Social and Governance (ESG) goals can see the impact this has on everything from talent attraction and retention to client wins and stakeholder investment. And being able to demonstrate accurate reporting on ESG targets is one way that organisations are held accountable for the choices they make as they work towards these goals.
One particular piece of legislation that will help businesses work towards – and monitor their progress of – the ‘E’ part of their ESG goals is the Corporate Sustainability Reporting Directive (CSRD). Launched by the EU earlier this year, over the next couple of years it is likely to become a crucial piece of legislation that will affect the corporate travel and meetings and event management landscape.
Reed & Mackay Global Sustainability Director Chris Truss gives the lowdown on what the directive will mean for organisations and their travel and sustainability managers and how they can work towards meeting ESG targets.
What is the CSRD?
The directive was designed to modernise and strengthen the rules concerning the social and environmental information that companies have to report. European Union law already requires all large and listed companies to ‘disclose information on what they see as the risks and opportunities arising from social and environmental issues and on the impact of their activities on people and the environment’.
Now, a wider set of companies will be required to report on their sustainability targets.
When does the CSRD come into effect and for who?
The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025, which includes organisations listed in an EU-regulated market with 500 or more employees.
Then from 2026, the directive will apply to large companies not already mandated, while from 2027, small- and medium-sized enterprises will have to report. And it doesn’t just affect EU companies. Non-EU companies with EU subsidiaries will have to report from 2028 and it will also come to businesses that are headquartered in the UK but do business in the EU.
Why is this legislation important?
Organisations across the globe can expect more sustainability regulations coming in over the next few years – and they’re likely to be stricter as we head towards the UN’s Net Zero 2050 target. If companies are already in the process of sustainability monitoring, they will be in a better position than organisations that aren’t, as laws around sustainability continue to evolve and tighten.
What areas will companies need to report on for the CSRD?
There’s a range of criteria, ranging from an organisation’s greenhouse gas reduction targets and its sustainability risk strategy to incentive schemes and due diligence. Further criteria to report on includes greenhouse sustainability governance, policies and transition plans.
How can companies reduce their environmental impact of business travel?
There are several ways organisations can work towards this. Consider elements such as educating employees on how their travel choices impact the organisation’s carbon footprint. Choose to work with suppliers that offer more sustainable choices. And have in-depth insights that impact the carbon footprint of an organisation’s travel programme. Data is what will reliably inform businesses to make those choices around sustainable travel.
Tracking and reporting on CO2 emissions are much more than a nice-to-have and are now a vital part of any travel programme. This, in turn, means travel managers and sustainability managers will have a key role in reaching their organisation’s ESG goals and what is implemented in travel policies. With these stricter rules coming in around reporting, they will also have the chance to educate and inform the wider business about how they can reduce the organisation’s carbon footprint via their travel programmes.
How can businesses report accurately on their environmental impact from travel?
Technology that allows businesses to monitor progress towards sustainability goals, which provides real-time tracking of emissions data and gives business leaders the opportunity to adjust business practices where needed, should be integrated.
How can Reed & Mackay help?
Reed & Mackay clients – whether using our proprietary online or offline booking tools – have the opportunity to compare and select more sustainable choices when booking travel.
Clients are able to access pre-trip granular CO2 results, which provides insights into the unique CO2 footprint of every travel option. This means bookers can compare this data with the trip average and find the more sustainable choice easily.
These carbon-aware insights are available for entire journeys, from airlines and trains to cars and hotels. The data also highlights details such as aircraft type, load factors and routing, while hotels can be selected by sustainability performance ratings. And ground transportation can be selected based on fuel, engine and car type.
Having this data to hand means it’s easier to choose travel that reduces Scope 3 emissions and hits ESG goals, while not having to compromise on traveller experience.