How does the new EU Corporate Sustainability Reporting Directive (CSRD) affect your brand?
Nov 30, 2022
We heard about it, and now it’s here: the EU Corporate Sustainability Reporting Directive (CSRD).
The EU Commission adopted, on November 28th, 2022, the new directive that requires companies to measure their impact on people and the planet. The purpose is to help investors and other stakeholders to make more qualified decisions regarding sustainability issues. This increases your company’s accountability and is meant as a strategic decision to smoothen the transition towards a sustainable economy.
The CSRD proposal was part of the EU Green Deal and the Sustainable Finance Agenda, already in April 2021, and its approval will hopefully ensure that current gaps in the rules on sustainability information are filled. For brands within the textile and fashion industry, garments and footwear alike, this means that action is no longer needed, but required.
What is it about?
The Corporate Sustainability Reporting Directive (CSRD) will require more detailed reporting on 4 different criteria:
As a brand within the textile and fashion industry selling garments or footwear, you must demonstrate your knowledge along the supply chain on all these criteria. And to cover them, you will need to rely on industry-specific certifications.
Whom does it concern?
EU large companies
EU companies listed in the regulated markets
Non-EU companies that turnover > 150€ million in the EU market with at least one subsidiary or brand in the EU
When does it come into effect?
There is still time to start complying, but because it is a lengthy process, the sooner you start your journey, the better. The rules will come into effect between 2024 and 2028 as it follows:
From January 1st, 2024, for large public-interest companies (>500 employees) already subject to the non-financial reporting directive, with reports due in 2025;
From January 1st, 2025, for large companies that are not presently subject to the non-financial reporting directive (>250 employees and/or €40 million in turnover and/or €20 million in total assets), with reports due in 2026;
From January 1st, 2026, for listed SMEs and other undertakings, with reports due in 2027. SMEs can opt out until 2028.
After being signed by the President of the European Parliament and the President of the Council, the CSRD will be published in the Official Journal of the European Union and will enter into force 20 days after. The new rules must be implemented by the member states 18 months later.
The issue carried by CSRD is not new to textile and footwear brands, but because of its optional character, it hasn’t been prioritized. As a brand in these markets, it is now time to find a way to comply.
How can Product DNA® help?
Trimco’s Product DNA® allows your brand, if you serve the textile, fashion, or footwear industries, to map your supply chain against the above-required criteria listed by the EU, and our team can help you map out a plan to find the right setup.
Via the Certificate Manager and with the support of our local Customer Support teams, we collect this data along the supply chain quickly.
We also provide a ready-to-use dashboard for your brand to monitor the supply chain and prepare for the CSRD. Onboarding suppliers and collecting information happens in just a few months.