Knowledge session dedicated to CSRD
Sustainability is a hot topic due to the new regulations. That's why the knowledge session on November 23, 2023 focused on CSRD, ESG and Source-to-Pay. In it, Jordie van Berkel, specialist in the field of sustainability in Procurement, shared her expertise. She previously wrote the purchasing classic “Procurement in a Strategic Perspective” with Prof. Dr. Arjan van Weele and Gert Walhof.
In this knowledge session, she showed us how you, as a Purchasing and Finance professional, can already prepare for CSRD. What is expected of you? How can you contribute to sustainability? And what can you already do to be well prepared? Watch the webinar or read more in this blog.
CSRD in a nutshell
CSRD stands for Corporate Sustainability Reporting Directive. It is the legal obligation to provide insight into organizations' sustainability efforts by reporting on them using the ESRS guidelines (European Sustainability Reporting Standards). Other goals of the CSRD are:
- Making sustainability performance an integral part of business strategies.
- Be a tool for communicating with stakeholders inside and outside the organization.
- Stimulating sustainable investments and reducing greenwashing.
CSRD affects every organization
The CSRD will be phased in from 2024. From 2024, the first companies will start collecting data and reporting on their sustainability efforts. This then applies to large banks, insurers and listed organizations. By 2025, all private organizations with a turnover of more than €40 million must report according to the CSRD. Different rules apply to government organizations.
Most organizations are therefore not immediately obliged to report on their sustainability performance. Nevertheless, many organizations will notice the impact of the CSRD. This reporting obligation is about chain responsibility. This means that if your company delivers to a company that does fall under this category, you can expect questions, such as: how is your product made? Or how will your product be transported? As an organization, you must already be able to answer that.
It is therefore important that, as a Purchasing and Finance professional, you already have ownership within your organization with regard to this subject. Make sure you make people responsible for implementing the CSRD. So: organize your capacity.
The impact of CSRD on Source-to-Pay
The reporting obligation is not only about your own activities, but also about the activities of your suppliers throughout the supply chain. As a result, the CSRD has a major influence on the Source-to-Pay process. Whether it's about spend analysis, executing RFIs and RFPs, registering contracts, or the more operational process from ordering to payment, to properly execute the CSRD, you need a mature S2P process. The lower the maturity of your S2P process, the harder it becomes to meet the CSRD requirements.
For example, how do you want to report on your suppliers' CO2 emissions if you don't have the suppliers' data properly ready? So make sure you have control over your spending. Make clear agreements with your suppliers and make sure you have your contract administration in order.
It is also interesting to see that software suppliers are increasingly offering useful functionalities to comply with the CSRD. For example, you can:
- Selecting sustainable suppliers from their supplier network;
- Linking to external systems (e.g. Ecovadis) for supplier sustainability ratings;
- Using Guided Buying to lead buyers to sustainable items in a catalog;
- Get insight into the CO2 emissions of your S2P process.
Well prepared for the CSRD: take the first step today
For many organizations, the CSRD only takes effect later. However, it is useful to prepare for it in advance so that you avoid the stress of complying with the guideline.
You are already taking the first step by increasing your awareness and gaining knowledge. For example, look back to our knowledge session about this or already provide insight into your organization's sustainability performance. This way, you are prepared for the new work process. In addition, you can immediately see where your organization still has opportunities to grow.
Would you rather have one of our experts watch with you? Please feel free to contact us.