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Digital signing & sustainability

What companies need to know for the 2024 CSR reporting obligation

Vanessa Frühbeiss
Updated on 22.05.2024

In this blog post, you will learn everything you need to know about the new Corporate Sustainability Reporting Directive (CSRD), the requirements for companies and how sproof sign can help you meet these challenges.

What is the CSR reporting obligation?

The CSR reporting obligation, or corporate social responsibility reporting obligation, is a legal requirement for companies to report regularly on their sustainability activities. These reports cover environmental, social and governance (ESG) aspects and are intended to increase transparency about the company's non-financial impact. The aim is to provide stakeholders - including investors, customers and the public - with comprehensive information about the company's sustainability practices and social responsibility.

What does the new sustainability reporting obligation mean for you?

The CSRD comes into force in 2024 and significantly expands the previous Non-Financial Reporting Directive (NFRD) . The aim is to standardize and regulate reporting on sustainability issues in order to ensure increased transparency on environmental and social corporate aspects. But what does this mean for your company?

What do you have to report?

Companies must disclose comprehensive information on environmental, social and governance (ESG) aspects. This includes environmental matters (e.g. emissions, energy consumption), social aspects (e.g. working conditions, gender equality), employee matters, respect for human rights and the fight against corruption and bribery. These reports must contain both qualitative and quantitative data and be both forward-looking and retrospective. In addition, they must cover the entire value chain of your company.

Who is affected?

The CSRD applies to all large companies that meet at least two of the following criteria

  • More than 250 employees
  • A balance sheet total of over 20 million euros
  • A net turnover of over 40 million euros

This means that many more companies than before will have to disclose their sustainability measures.

When do you have to act?

The new regulations will be implemented in three phases

  • from January 01, 2024 for companies already subject to the NFRD (first reporting in 2025)
  • from January 1, 2025 for large companies that were not previously required to report (first reporting in 2026)
  • from January 1, 2026 for listed SMEs (first reporting in 2027), with an opt-out option until 2028

Reporting framework: format and standards

With the CSRD, the EU has introduced uniform European reporting standards that companies must use for their sustainability reports. These standards, known as the "European Sustainability Reporting Standards" (ESRS), were developed by the European Financial Reporting Advisory Group (EFRAG) and transposed into law by the European Commission.

The first regulations will come into force in 2024 and comprise twelve standards covering environmental, social and governance topics as well as overarching requirements.

There are simplified reporting standards for small and medium-sized enterprises that will apply from 2026:

  • Companies must report according to the principle of double materiality. This means that they must disclose both the impact of their actions on the environment and society and the impact of environmental and social changes on their business.

  • The reports must be prepared in a digital, machine-readable format and reviewed by independent bodies to ensure compliance with the standards.

In the future, industry-specific reporting standards are also planned to further specify reporting.

The e-signature is an important tool for achieving sustainability goals

The digitalization of business processes is a key lever for efficiently fulfilling the requirements of the CSRD. One fundamental process that should therefore be digitized is the signing of contracts and documents. From day one of the widespread introduction of e-signatures, a company can measurably save a large amount of paper-based resources. Resources that pollute the environment.

An example: Let's assume that any company saves (only!) 500 sheets of paper within a certain period of time thanks to the integration of the e-signature. This measure already leads to a reduction in the consumption of 7.5 kilograms of wood, 130 liters of water and 26.8 kilowatt hours of energy.

The use of digital signatures can therefore be a key to efficiently fulfilling the requirements of the CSRD and an important step towards more sustainable corporate governance, as well as calculating exactly how many resources have been saved.

*The calculation of the added value is based on user data and findings from market analyses and specialist literature. The following factors determine the present calculations: - Average time saved per internal signature workflow (without logistical effort): 10 minutes - Average time saved per external signature workflow (with logistical effort): 20 minutes - Gross hourly wage in euros, estimated for 40 hours of full-time work: €20 - Cost per sheet of A4 (printing, procurement): €0.14 - CO2 emissions per sheet of A4 with conventional signature: 0.008 kg - Energy consumption per sheet of A4: 0.0648 kWh In fact, there are many factors that have not been taken into account in this calculation, but which can significantly (positively) increase the actual added value! Not included are business trips, storage and archiving costs, costs for printing and scanning technology and financial disadvantages due to long waiting times for contracts. sproof can thus make a contribution to achieving your sustainability goals in several specific ESRS sub-categories (ESRS-E = Environment, ESRS-S = Social, ESRS-G = Governance and also in some "overarching topics").

Mandatory or optional? Is sustainability reporting also worthwhile at other levels?

For many companies, the obligation to provide ESG reporting may initially seem burdensome. However, the effort is actually also worthwhile for organizations that do not fall under the CSRD or SFDR (Sustainable Finance Disclosure Regulation). This is because making your own sustainability transparent is increasingly becoming a competitive advantage:

  • Strengthening reputation and brand: consumers value sustainability. ESG reporting can improve your company's image and brand, which helps to attract new customers and retain existing ones.
  • Convince investors: More and more investors are taking sustainability into account when making decisions. Transparent ESG reporting can make your company more attractive to investors.
  • Improve recruiting: Sustainability is a decisive criterion for many job seekers. A good ESG report can help you attract and retain top talent.
  • Save resources: By defining and measuring ESG KPIs, companies can make targeted savings on resources, for example reducing energy consumption and therefore cutting costs.
sproof sign is the highest-rated provider in the e-signature category on the independent evaluation platform OMR Reviews for Q3 and Q4 2023, as well as Q1 2024.