How to start your sustainability journey with CSRD

Sustainability is crucial for the future of our planet and society as a whole. Players across society are becoming more invested: consumers seek sustainable products, investors prioritize sustainability-focused companies, and governments are stepping in to accelerate sustainable transformation.

Sustainability is becoming increasingly critical to business operations too. At a bare minimum, businesses must meet increasing regulatory requirements, such as the Corporate Sustainability Reporting Directive (CSRD). Avoiding the sustainability transition is a huge risk – ones which the fossil fuel industry is already experiencing as assets become stranded. For frontrunners, a strong sustainability strategy differentiates their business. This positions them ahead of the competition for customers, employees, and stakeholders.

For many companies, complying with the CSRD will be the first time they deeply consider their sustainability strategy. Getting started can be difficult, but based on our experience across frontrunner clients, we can share a roadmap to get started.

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Engage your stakeholders

Stakeholders are the people within and beyond your business who impact you or are impacted by your operations. Customers, employees, suppliers, regulators, and local communities are all stakeholders for your business. A strong stakeholder engagement strategy can help steer your sustainability strategy and execution in a genuine, transparent, and effective way while reducing risks. For example, strong stakeholder engagement in planning processes have been shown to reduce litigation risks significantly in the USA.

Set a sustainability strategy

Think about the risks and opportunities that your business must navigate, and how sustainability intertwines with them. Classic strategy frameworks such as the Political, Economic, Social, Technological, Environmental, and Legal (PESTEL) analysis, Porter’s 5 forces, or a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis can be a helpful place to start. Whatever strategy you take, it should be deeply intertwined with the unique value position your business brings, including to broader stakeholders.

Find your sustainability operating model

A strategy shows you where you’re going, but it doesn’t tell you how to get there. Designing an operating model and a roadmap to bring it to fruition can help make your strategy a reality. You can use frameworks such as a gap assessment to identify the critical capabilities, systems, and organization that you need to realize your strategy. Think about including program management, governance, targets, incentives, and roadmap structuring projects and systems that can help you activate the strategy. These elements will give your sustainability transformation traction, and will also help your organization comply with the CSRD in a robust way.

Invest in a solid sustainability reporting infrastructure

Part of the sustainability operating model includes the systems and data about your footprint. Transparent, detailed, and fact-based information about your direct and value chain sustainability footprint is crucial to a successful sustainability transformation. Strong life-cycle metrics can differentiate between well-intentioned interventions, and those that will truly create a net sustainable impact. This information will also help you comply with the metrics required by CSRD such as value chain greenhouse gas emissions.

However, building a sustainability reporting infrastructure can be complex. As you get started, there are a few core questions you need to think through.

1. Which data do you need to collect?

A minimum baseline will be guided by the CSRD, the requirements of the applicable ESRS, and the material issues you face now. However, you should also consider broader metrics guided by stakeholder input, best practices, and pushing for further transparency throughout your supply chain. This will position your organization well to capture consumer, industry, and regulatory trends demanding more transparency, and ensure a future-proof approach.

2. How will you get that data?

High-quality, first-hand, and high-resolution data is always the best, but sometimes it isn’t available – especially data that is buried deep in your supply chain. In the short run, background databases, such as those provided in SimaPro, can be helpful.

In the long run, engaging your ecosystem to shine more light on your supply chain will lower risk and help your organization truly transform. For example, BMW has already started cooperative data-sharing across the automotive supplier networks to help decarbonize their full value chain. PRé Sustainability also offers tools within SimaPro that can help you get started on data collection, such as SimaPro Collect, or tap into emerging data sources such as real-time monitoring of your sustainability infrastructure with the API.

3. What controls will you use to ensure robust, auditable data?

Controls are the processes and checks that ensure your data stays safe and is accurate. For example, the ISO 27001 standard has many controls that can help ensure the availability, integrity, and confidentiality of your data through tactics such as access and version control. The online SimaPro platform is ISO27001 certified, so you can trust that your data is safe with us

4. What process will you use to continuously improve your sustainability? How will you derive new insights from data as you transform?

Think through how you will use the sustainability data you collect to generate insights. Generating data alone is not enough – that data must be reviewed, used to generate insights, then translates into action to create real impact. For example, targets. How will you set targets? Who will they apply to? How is progress held accountable (for example in incentives or remuneration packages)? The CSRD requires companies to disclose their sustainability targets and accountabilities, even to the highest levels of an organization. By using a wide range of data as progress indicators, you can guide your whole business through sustainability transformations in an agile way.

Start your journey now

Sustainability transformations are critical for all kinds of businesses. For some companies, CSRD compliance is a good push to get started. But for others, too, there is much value to be gained. Early investment in engaging stakeholders, aligning a strategy, and implementing a sustainable operating model will pay dividends later. At minimum, these benefits will better prepare your business for regulatory compliance. They also have the potential to help you strategically differentiate your business from competitors.

Are you ready to get started? PRé Sustainability has deep experience helping organizations become more sustainable with a transparent, robust, and fact-based approach.

Kimberly Bittler

Database team lead

Kimberly worked at PRé between 2021 and 2023. Initially joining as an Operations Manager, she later moved on to become the Database Team Lead where she helped the newly-created team grow and become a keystone within the company.

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