COP 28 will be held at the end of the month. 4 priorities have been outlined. They are all critical. But no critical breakthrough can be expected at COP 28. No leadership will be there. The attention of professionals has already been diverted to the regulatory landscape. The CSRD has been voted to come into force in 2024. The 12 reporting standards have also been endorsed. Gradually, not only large EU companies and SMEs, but also their investors, suppliers and partners based outside the EU will have to comply. What does this mean in practice?
Double materiality will prevail. Materiality analysis has been highlighting the impact of non-financial issues on companies' economic performance for 20 years. From now on, companies will also have to report the impact of their activities on various environmental, social and human rights issues. They will then have to draw up an action plan to address these risks.
Double materiality reporting will accelerate the transformation of companies and assets. It is no longer possible to comply with the CSRD without an approach that is consistent with the Paris climate agreements, for example. It is no longer possible to justify managing impacts on human rights risks without justifying them through due diligence in line with OECD and UN standards.
The cascade effect in value chains is obvious. Transactions between customers and suppliers will be accompanied by the collection of data standardized to EFRAG standards on subjects such as climate trajectory, living wages in the value chain, and consideration of biodiversity.
ESG Reporting: Understanding the 12 ESRS Standards Shaping CSRD
In our blog this month : The definitive version of the 12 sustainability reporting standards that shape CSRD is now official. With the end of the review period by the co-legislators, this first series of 12 sector-specific ESRS providing for proportionate but comprehensive reporting on environmental, social and governance issues, has now been integrated into the European legal framework. This blog provides a quick explanation of these standards.
Respecting Human Rights in Private Equity: Principles for Action
The 2030 Agenda for Sustainable Development places respect for human rights at the core of its commitments to each of the SDGs (Sustainable Development Goals). It is a major responsibility in every sector, particularly in finance and investment. The proliferation of laws and regulations requires financial players to take human rights into account in their investment decisions. Ksapa is currently leading a working group to develop a toolkit providing methodologies for private market investors. Find out more in this blog.
EU ESRS standards framing CSRD requirements are now selected. They introduce the concept of “adequate wage”. Expected eligible companies are required to report on living wage for their workforce (ESRS S1) and workers in the supply chain (ESRS S2). Ksapa has been working with clients, with what is already considered a "best in class" approach, bringing in data, methodologies and digital tools to investigate, act upon findings, and make sure the workforce is making a living wage. This briefing paper outlines 5 principles to keep in mind while calculating adequate wage.
