The topic of sustainability has finally arrived in the economy. Sustainable action is becoming an increasingly important factor for the competitiveness of companies. On the one hand, sustainable and efficient business operations can reduce costs, and on the other hand, environmentally conscious action is expected from more and more employees and customers. The time of mere declarations of intent is finally over.
More and more companies are demanding a detailed list of activities and sustainability results from partners and suppliers along the entire supply chain. This has led to service providers no longer covering travel costs if a means of transport with particularly high CO2 emissions, such as a short domestic flight, was chosen, even though a more environmentally friendly alternative, such as the train, would have been possible.
In addition, more and more companies are affected by regulatory requirements in the area of sustainability. Specifically: From January 1, 2025, the circle of companies affected by the European Union's Corporate Sustainability Reporting Directive (CSRD) will expand considerably.
What is the Corporate Sustainability Reporting Directive (CSRD)?
The Corporate Sustainability Reporting Directive (CSRD) is an EU directive that requires companies to publish comprehensive information about their sustainability practices. It replaces the previous Non-Financial Reporting Directive (NFRD) and significantly expands its requirements and scope. The aim of the CSRD is to improve the quality and quantity of published sustainability information in order to provide investors, customers and other stakeholders with a sound basis for decision-making.
Who is actually affected?
The CSRD significantly expands the scope of the NFRD. While the NFRD only applied to large capital market-oriented companies, the CSRD covers a wider range of companies, including large unlisted companies. In addition, the reporting requirements under the CSRD are more detailed and strict, requiring more precise and comprehensive reporting.
According to the EU Accounting Directive, companies that exceed two of the following three criteria are considered large companies – and therefore subject to reporting requirements from 1 January 2025:
- Total assets: €25 million
- Net sales: €50 million
- Employees: 250
What role does ERP software play in sustainability reporting?
The answer to the question of where companies find the data they need for reporting is easy to answer in most cases: in the ERP system. This is where all the threads in the company literally converge - from purchasing and sales to production, logistics, service and financial accounting. Central data storage saves time because information does not have to be searched for in different data sources. A uniform, standardized data structure makes it easier to prepare the data. Another advantage: an ERP system ensures the integrity and transparency of the reporting data. All data is stored centrally and, where necessary, in an audit-proof manner and is easy to understand, which makes it easier to comply with CSRD requirements.
The ERP system therefore has a dual role: on the one hand, it ensures an efficient process landscape along the entire supply chain, and on the other hand, it provides a solid data basis for sustainability reporting. The challenge now is to identify and provide the relevant values - for example for CO2 reporting - from a large number of dynamic transactions in the ERP.
Companies do not have to start from scratch. Microsoft now offers a function in Business Central that collects data on sustainability topics in the ERP software and helps with sustainability reporting. KUMAVISION is currently examining the integration of CSRD reporting into the ERP industry solutions. The versatile automation options of Business Central and the entire Microsoft technology platform enable companies to implement CSRD reporting safely and in a time-saving manner.
Easy entry
The KUMAVISION partner EOS Solutions offers the Carbon Footprint Calculator a simple way to record the CO2 footprint of your own company directly in Microsoft Teams and thus make an initial assessment of your situation. The tool is available free of charge in the Microsoft AppSource (https://appsource.microsoft.com/de-de/product/dynamics-365/eos_solutions.eos_carbonfootprintcalculator?tab=Overview).
Efforts and opportunities
Admittedly, companies will not be able to simply meet the obligations arising from the Corporate Sustainability Reporting Directive on the side. However, addressing the issue of sustainability at an early stage can also open up competitive advantages: on the one hand through the secure adherence to compliance regulations, and on the other hand through the identification of resource-intensive and therefore costly processes. Last but not least, transparent sustainability management can be the deciding factor in the selection process for new customers and employees. This makes the preparation of sustainability reporting interesting for companies that are not (yet) affected by the CSRD. ERP systems such as Microsoft Dynamics 365 Business Central and the KUMAVISION industry software are an indispensable tool for companies that want to meet the requirements of the CSRD. They offer an efficient solution for collecting and analyzing data, support reporting and help improve the transparency and quality of sustainability reports.
Further information
Information page of the Federal Environment Agency
https://www.umweltbundesamt.de/umweltberichterstattung-csr-richtlinie
CSRD policy text of 16 December 2022
https://eur-lex.europa.eu/legal-content/DE/TXT/?uri=CELEX:32022L2464
Carbon Footprint Calculator for Microsoft Teams
https://www.eos-solutions.it/de/carbon-footprint-calculator-de.html
