Introduction to CSDR
The EU’s Corporate Sustainability Reporting Directive (CSRD), effective from January 5, 2023, represents a significant step towards transparency in corporate practices, aligning with the European Green Deal’s 2050 climate-neutral goals.
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What is the CSR Directive?
The CSRD builds upon the Non-Financial Reporting Directive (NFRD) from 2014, introducing stricter regulations and expanding the scope to approximately 50,000 companies within the EU, compared to around 11,000 under the NFRD. The directive enhances transparency in social and environmental impact disclosures.
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What Disclosures Need to Be Made?
Under the CSRD, companies must report on governance, strategy, impact, risks, opportunities, and metrics across environmental, social, and governance (ESG) practices. These reports are guided by the European Sustainability Reporting Standards (ESRS).
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What Are the ESRS?
The ESRS provide a structured framework for disclosures, divided into four categories:
- Cross-Cutting Standards: ESRS 1-2
- Environmental Standards: ESRS E1-E5
- Social Standards: ESRS S1-S4
- Governance Standards: ESRS G1
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ESRS Categories Breakdown:
Key ESRS Categories:
- ESRS 1-2: General requirements and disclosures
- ESRS E1-E5: Climate change, pollution, water and marine resources, biodiversity, resource use
- ESRS S1-S4: Workforce, value chain workers, affected communities, consumers
- ESRS G1: Business conduct
Clean the World supports various elements within the ESRS for the hospitality industry, particularly focusing on ESRS E1-E5 measures around climate change, pollution, water and marine resources, and biodiversity.
Who Does CSRD Impact?
CSRD Compliance Timeline
Company Type | Start Date | First CSRD Report Due |
Large companies and parent companies of large groups (over 500 employees) | January 1, 2024 | 2025, covering the 2024 financial year |
Large companies meeting at least two of the following criteria: – More than 250 employees – €50 million in net turnover – €25 million in total assets | January 1, 2025 | 2026, covering the 2025 financial year |
Listed SMEs, Small and Non-Complex Credit Institutions, and Captive Insurance Undertakings | January 1, 2026 | 2027, covering the 2026 financial year |
Non-EU Companies with significant EU activities (net turnover over €150 million in the EU and at least one subsidiary or branch in the EU) | January 1, 2028 | 2029, covering the 2028 financial year |
Example Hospitality Organizations in Scope in Europe
Support From Clean the World
Clean the World’s Role in CSRD Compliance: Clean the World helps corporate partners in scope for CSRD requirements through its Global Hospitality Recycling Program and comprehensive impact reporting system. Clean the World’s program recycles soap and plastic amenities from hotels and provides hotel partners with their own impact data, allowing them to track, measure, and share their impact.
Clean the World’s hospitality recycling program meets various ESRS requirements, including:
- ESRS E1: Climate change
- ESRS E2: Pollution
- ESRS E3: Water and marine resources
- ESRS E5: Resource use and circular economy
- ESRS S3: Affected communities
For more information about Clean the World, visit cleantheworld.org.
Sources: EFRAG
Future Outlook: CSRD’s focus on sustainability aligns with Clean the World’s mission. We’re here to support hotels and corporations in meeting various aspects of these new regulations.
Useful information: Sustainability Hospitality Alliance
Looking Ahead
By aligning with the CSRD and utilizing Clean the World’s Global Hospitality Recycling Program, EU hotel chains can effectively meet sustainability reporting standards, ensuring compliance and supporting various aspects of the ESRS and CSRD.
