Are you ready to take on the CO2 emission reporting challenge ?!
In Europe, The demand for emissions reporting in supply chains is driven by compliance requirements.
Importes & Exporters are asked to take control of their supply chain emissions for different reasons (mandatory and voluntary):
Governments and regulatory bodies who are introducing mandatory scope 3 emissions reporting. The EU’s CSRD is the first example of this type of mandatory reporting, but also the UK, the US and Brazil are also expected to follow suit soon.
Better Acces to Credit Financing and competitive edge on the Market
Knock-on Effect on all the Businesses, included SME’s ones and the entire Supply Chain; all The actors (shippers & importers) that serve the Businesses included in the CSRD, will have to follow suit (they will be simply demanded just for being active players of their Supply Chain).
Final consumers demanding more transparency of the sustainability claims for the products and services they use; and this is a Voluntary Action moved by conscience and counsciesness gaining ground day by day in our society.
Go to your private area and start monitoring your environmental impact
what is the CSRD?
The CSRD ( Corporate Sustainability Reporting Directive) is a significant regulatory framework enacted by the European Union Council at the end of 2022 that supersedes the existing Non-Financial Reporting Directive (NFRD). The first set of businesses impacted by the CSRD will be those currently covered by the NFRD (large enterprises), with small and medium enterprises (SMEs) as well as non-EU companies requiring participation at later dates (2026 and 2028, with reporting due in 2027 and 2029).
In force in the EU since the start of 2023, the CSRD is designed to enhance corporate sustainability reporting in
general, but this will also have significant knock-on effects for freight forwarders and their customers.
Why a knock-on effect on whole market ?!
Because CSRD is already Gloabl; some companies who are not even in the EU will be captured specifically by it, but there is also the knock-on effect on global supply chains that large companies in the EU are going to have to start paying attention to.
Most organisations are part of someone else’s supply chain, and they will need that data ready for when their larger customers start demanding that data from them for their own CSRD reports.
It will be a ripple effect because the bigger businesses will demand their suppliers to commit themselevs to ESG Criteria as well as they have done; they will clearly state (and immediately afterward expect) on their mandatory Sustainability Report that their entire Supply Chain will be covered by the action of actors obedient to the Esg thematics. Finally the Domino Effect will be really fast affecting all the SME’s.
Putting this idea into perspective, research from McKinsey & Company suggests that an average auto manufacturer has around 250 tier-one suppliers, but 18,000 suppliers across its full value chain. Aerospace manufacturers have an average of 200 tier-one suppliers and 12,000 suppliers across all tiers, and technology companies have an average of 125 tier-one suppliers and more than 7,000 suppliers across all tiers.
Least but not last european Banks have been already targeting Esg Businesses, and are discerning who is taking a sustainable action and who is indifferent.
In terms of competitiveness this new Scenario will be always more a Key factor in making final decision on client choice.
Just to have an generic idea of CSRD requirements
Here’s a short breakdown of what information businesses are required to disclose under the CSRD:
The selection of ESG themes and risks
Sustainability targets and progress
Strategies for transitioning to a sustainable economy
Identification of sustainability risks
Evaluation of strategy resilience
Disclosure of fossil fuel exposure
Environmental protection policies
Social responsibility initiatives
Human rights respect
In the specific how does CSRD affect Businesses together with their Freight Forwareder & Logistic Provider?!
Many large corporations will need to report their scope 3 emissions – including emissions generated from both upstream and downstream transportation and distribution of goods (scope 3 categories 4 and 9 of the Greenhouse Gas Protocol) – for 2024, from 2025 onwards. The requirement to include scope 3 emissions in CSRD reporting is a new addition when compared to NFRD and other sustainability regulations, requiring further organisation and preparation from qualifying businesses. In order to meet the requirement to report scope 3 categories 4 and 9, corporations that rely on the movement of goods will need their shippers and distributors to report the emissions generated from shipping their goods.
Who needs to report under CSRD?
The CSRD aims to establish common, consistent and standardised reporting practices for environmental, social and governance (ESG) factors within the EU, much like existing financial accounting and reporting standards. Companies that meet the following criteria will need to start reporting under the CSRD:
Have over 250 employees
Generate annual revenues exceeding €40 million
Possess total assets surpassing €20 million
Publicly-listed entities with more than 10 employees or generating more than €20 million in revenue.
International or non-EU entities that generate annual revenues surpassing €150 million within the EU and have at least one subsidiary or branch in the EU meeting specific thresholds.
Who to follow afterward (or better, immediately)?
When starting the emissions reporting under CSRD?
To stay ahead, freight forwarders should start preparing for calculating and reporting scope 3 categories in 2023. Many companies are already looking for forwarders that provide sustainability services, and emissions measurement is likely to become an RFP requirement for shippers and a real differentiator for freight forwarders in the very near future.
Dafarra & Seves has started working on this key thematic since the beginning of 2023; and already now we can assit you to calculate & report your future emissions with an accredited platform. We can issue accredited certificates on scope emissions 3 as well as offsetting tools.
With our current clients we can already provide them with these data dated back to 2023.
We have made of SDGs agenda our main Mission, and we are ready to accompany you along this journey!
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Pledge measures and elaborates carbon Footprint for all modes of transport; it is an accredited platform that enables you to easily calculate your CO2 emissions; it Instantly generates reports that empower you to meet your sustainability needs.
Go to your private area and start monitoring your environmental impact; we do know how Sustainabiliy is worth for you!