By Cécile Lafon, Partner at Talan Consulting and Valérie Camon, in charge of the EPM offer at Talan in Lyon
ESG reporting: the experience of the finance department will be valuable
From January 1, 2024, the CSRD will apply to all companies listed on the European market, as well as to those that meet at least two of the following criteria: have a balance sheet of €20 million, have a turnover of €40 million, and have at least 250 employees. In total, almost 50,000 companies will have to produce a non-financial report, whereas currently only 11,000 are subject to this obligation.
But that's not all: the CSRD also introduces a new reporting format, which aims to facilitate comparisons on the basis of CSR criteria, and to make CSR reporting as reliable as financial reporting. It is therefore in the company's interest to rely on its finance department, which is used to juggling numerous standards (whether in accounting or taxation), and which will be able to produce a document worthy of being presented to shareholders and stakeholders.
Purchasing and R&D: essential skills for developing a CSR strategy
The CSRD also enshrines the principle of "dual materiality" by obliging companies to distinguish between, on the one hand, the impact of their activity on the environment and society and, on the other, the influence of environmental and societal issues on their activity. The aim is simple: to encourage them to find the right balance between economic performance and respect for the environment.And therefore to develop a real CSR strategy.
While this strategy will undoubtedly be defined at the highest level (general management, board of directors), its operational implementation must necessarily be based on the business lines. Indeed, which department, other than R&D or the design office, is capable of improving the energy consumption of products? And who else but the purchasing department is best placed to reference suppliers according to societal or environmental criteria?
But first of all, you have to get your employees on board. Many employees today deplore their employer's attitude to social and environmental issues. Indeed, for 69% of employees, when a company formulates its "raison d'être" (i.e. its mission with regard to society and the general interest), it is only for communication purposes. In order to obtain the support of its employees, the company must therefore base its CSR strategy on reliable data and communicate rapidly on the first results obtained.
A paradigm shift to be understood as soon as possible
The CSRD will come into force in 18 months: it is therefore in the interest of companies to launch a reflection without delay if they do not want to generate a legislative debt. Furthermore, companies should not underestimate the paradigm shift that this new regulation implies. Indeed, current managers are still very attached to the Friedmanian conception of the company: they do not imagine contributing to the general interest other than by creating wealth. However, for several years now, consumers have been demanding that companies set a better example on environmental issues. Regulations are therefore simply following the trend, and it is a safe bet that in the years to come, the most competitive and attractive companies will be those that are able to evolve. In this sense, the CSRD should not be seen as another constraint, but rather as an opportunity for transformation in order to face the challenges of tomorrow.
 Le baromètre de la raison d'être, IFOP / No Com / Tikehau Capital / ESSEC, 2019.