New EU Sustainability Directive will affect more than 50,000 companies; the besmarthead.com platform will help with reporting

More than 50,000 companies in the EU will soon be required to report non-financial information on the sustainability of their business. So far, reporting requirements have affected only 11,600 organizations. But from 1 January 2023, the Corporate Sustainability Reporting Directive (CSRD) will affect all large companies, while small and medium-sized enterprises will be given three more years to implement it. The besmarthead.com platform is designed to help companies of all sizes comply with this directive. Besmarthead.com’s creators are now using the Crowdberry platform to seek out new investment for further development. What kind of potential does this new tool have?

In the Czech Republic, non-financial sustainability reporting so far concerns only 25 corporations. Due to changes in the rules and new legislation, there will be more than 1,000 companies affected, at least from 2023. The new reporting requirements under the CSRD will also affect listed SMEs from 2026. In total, the change should affect around 50,000 companies across the EU.

Reasons for the CSRD

The EU has addressed non-financial reporting in the past. However, on 21 April 2021, it introduced a wide-ranging reform entitled the Corporate Sustainability Reporting Directive (CSRD), which aims to clarify key data for company sustainability reporting. Together with the adopted standards of the taxonomy on sustainable activities, the new regulation provides companies, banks and investors with clear instructions on how to analyze risks and opportunities, and how to set their sustainability strategies.

The CSRD will also support the European Green Deal and, together with other legislation, it aims to transform private businesses into climate-neutral enterprises. Companies will have to issue reports on the sustainability of their business according to mandatory EU standards and have them externally verified.

Who will be affected by the new directive?

EU member states have until the end of 2022 to integrate the CSRD into their legal frameworks. From 1 January 2023, new rules will apply to certain companies. Specifically, these are:

• “a large enterprise” as defined by the EU, which is an EU company or EU subsidiary of a non-EU company;
• insurance companies and credit institutions / banks regardless of their legal form.

From 1 January 2026, the new rules for sustainability reporting will also apply to listed SMEs. Unlisted SMEs can choose to report under the directive on a voluntary basis.

SmartHead uses the potential of CSR and its reporting

The requirement will apply to around 50,000 companies in the EU, which will now have to prepare to meet the reporting requirements. The primary point is the method by which they will gather information about their corporate social responsibility (CSR) activities, how to draw up internal guidelines, and how they set their goals and KPIs.