CSRD AND CSDDD Directive. What is new about CSR?

Corporate social responsibility (CSR) and sustainable development are concepts that are now more important than ever. The planet, the economy, businesses, and society need to understand that social responsibility and sustainable development are the key for a cleaner and more sustainable environment.

Corporate social responsibility (CSR) and sustainable development are concepts that are now more important than ever. The planet, the economy, businesses, and society need to understand that social responsibility and sustainable development are the key for a cleaner and more sustainable environment. That is why the European Union recognized the necessity of disclosure of non-financial information by companies.

In order companies to have sustainable investments should recognize the fact that sustainable development of the company it promotes and contributes to the sustainable development of society. Therefore, the European Union established a series of legislations and initiatives in order to give the trigger and the pressure to the companies to change their development strategies.

The most important legislations/directives enacted by the European Union are the following:

• Corporate Sustainability Reporting Directive (Corporate Social Responsibility Directive - CSRD)

• Corporate Sustainability Due Diligence Directive (CSDDD)

The Corporate Sustainability Reporting Directive (CSRD) is essential regulation for the accountability and recording of all information that affects society and the environment. It was established by the European Union and the European Commission with the aim of developing a transparent environment and culture in which companies should be accountable and transparent about any information related to or causing a long-term impact on society and the environment in which they interact.

According to the European Commission the Partnership Reporting Directive (CSRD) requires companies that fall into 2 of the 3 criteria below:

• more than 250 employees

• 40 million euros in net turnover.

• 20 million euros on the balance sheet. comply with and disclose information regarding:

• environmental issues

• Social issues and treatment of employees

• respect for human rights

• fight against corruption and bribery

• diversity on company boards (in terms of age, gender, educational and professional background)

Essentially, the Corporate Sustainability Reporting Directive (CSRD) was created to cover the gaps created by the implementation of the regulation on the disclosure of financial information (non-financial reporting). environment, society, and governance (ESGEnvironmental Social and Governance).

It found that the non-disclosure regulation offered companies "loopholes" so that information that did not correspond to reality was published.

This practice is called "greenwashing" and it enables companies to publicize untrue information in order to reduce costs and increase company name recognition without real effects on society and the environment.

It is for this reason that many managers affected by the Corporate Aviation Reporting Directive (CSRD) consider the directive to be the right direction to upgrade the already existing non-financial information regulations to a stricter implementation framework. Therefore, companies are asked to find the right strategy that fits "glove" to their business activities, planning actions and designers that have a positive effect on the environment and society, and at the same time increase profitability and ensure the long-term viability of the business.

To balance in such an environment with various internal and external factors, companies are required to find the right corporate sustainability and responsibility strategy tools and standards that comply with the Corporate Sustainability Reporting Directive (CSRD).

Such standards are SDGs - Sustainable

Development Goals, GRI -Global Reporting Initiative which focus that companies will achieve their goals for corporate sustainability reporting (CSRD).

The European Union and the European Commission on Corporate Reporting (CSRD) compels companies to comply with the aim of increasing accountability and transparency regarding the actions created by each company.

Οn the other hand, the new directive of the European Union regarding the Corporate Sustainability Due Diligence Directive (CSDDD) aims at the mandatory contribution and involvement of boards of directors in the creation and implementation of a strategy that touches on issues related to human rights, the environment, corporate governance throughout their organization's supply chain.

The new directive concerns:

• large size and limited liability companies in the EU but also companies from 500 employees and net turnover of 150 million

• companies in high-impact sectors with a turnover of 40 million

• third country companies operating in the EU with a turnover threshold aligned with the above groups 1 and 2 produced in the EU.

For the categories of companies mentioned above, the European Union obliges them, among other things, to:

• identify to take into account and mitigate negative impacts on human rights and environmental impacts during their operations

• identify actual or potential adverse impacts on human rights and the environment

• monitor the effectiveness of the due diligence policy and measures

In essence, it obliges directors and senior management of companies to be accountable and take actions and responsibilities so that they comply with the regulation. Therefore, the new directive moves within a stricter framework and at the same time expands the list of companies that are obliged to comply with the new directive.

In conclusion, both directives define a stricter framework of accountability of companies towards the society of its partners and their employees.