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To ensure that sustainability transcends mere buzzword status, Europe has initiated the ‘Corporate Sustainability Reporting Directive’ (CSRD). A law that may have a serious impact on the role of IT professionals.

If you’re in the supermarket looking to purchase washing powder and are presented with a variety of brands, your commitment to the planet’s future might lead you to select the product that most effectively highlights its sustainability credentials. Now, how can you be sure that the product you’ve chosen is genuinely eco-friendly, rather than just a result of compelling marketing?

Europe’s new directive is a game-changer in the fight against greenwashing, a practice where an organisation pretends to be greener than it really is. Under the directive, many companies will be required to provide annual reports on their sustainability practices and outcomes. To do so, the European Commission has established a series of standards that organisations should incorporate into their reporting practices.

Between 2025 and 2027, gradually more companies will have to submit these reports. In fact, the first organisations to comply with CSRD will have to collect the information for their reporting as early as this year. And to a large extent, they will have to rely on their IT teams for this.

No report without data

Measuring is knowing. And the new sustainability report demands a substantial amount of data! It encompasses everything from CO2 emissions and water usage to waste management, while social impact such as human rights and diversity are also covered in the mandatory reporting. Frequently, this involves data that companies have not previously gathered, much less reported on in specific detail.

An important part of the directive is the principle of “double materiality”. What does that mean? In simple terms, it examines sustainability through two lenses: firstly, the impact a company has on society and the environment, and secondly, how sustainability challenges impact the organisation’s cash flow and overall value. Implementing sustainable technology indeed costs money and sustainability efforts can affect corporate image. This analysis is obviously much more complex than ticking a few boxes.

Additionally, the report also provides space for so-called Scope 3 emissions. While Scope 1 looks at a company’s direct emissions (emissions released during industrial processes), Scope 2 includes indirect emissions from purchased energy. Scope 3 goes one step further and shows indirect emissions in a company’s value chain. This can include both purchased and sold goods that generate emissions. While this is often outside a company’s control, it may have a big impact on overall emissions. You see: CSRD reporting is a rather complex matter.

Wanted: sustainability manager with IT skills

Fines for those who fail to comply can be quite high. Being properly prepared is therefore essential. Gathering and analysing data is not a simple task that you can simply tack onto someone’s duties shortly before the deadline for report submission. That is why the directive may eventually even create a new position in companies. A kind of sustainability manager who monitors sustainability efforts and also manages reporting. That person may be someone with an IT profile, and if not, close cooperation with IT will definitely be necessary.

Below you will discover a few tasks that IT professionals can support:

  • Implement systems for sustainability data collection and management
  • Automate processes and integrate technologies that simplify reporting
  • Adapt the IT infrastructure to ensure systems will contribute to the company’s ambitions of a reduced carbon footprint

Now more than ever, IT is the key. Possessing the appropriate data collection and analytical skills, and knowledge of the CSRD directive undoubtedly provide a competitive edge. It is a unique opportunity for IT to contribute to an organisation’s sustainability story. Businesses should view the new regulation not just as an obligation but as an opportunity to have a positive impact on both their customers and employees by cultivating an authentic sustainable image. And that is, of course, something everyone is happy to contribute to.

Looking for IT talent that can help you report on sustainability? Or an IT professional who knows how technology can reduce your company’s emissions? Find out here how we are making a difference with our network.