December 20, 2023
CSRD is about to change procurement, here's how

In case you’ve missed it, the EU is launching the Corporate Sustainability Reporting Directive (CSRD) in January, setting new standards for sustainability reporting on completely new heights.

This has a major impact on especially procurement, since reporting on the supply chain is an important part.

We have collected insights tied to this and formulated questions to help you as a procurement executive stay on top of the evolving landscape.

First of all. CSRD is divided into a group of European Sustainability Reporting Standards (ESRS) covering different perspectives: Environment, Social & Governance. The most important ones related to procurement are

  • E1 - Climate change
  • E2 - Pollution
  • S2 - Workers in the value chain
  • G1 - Business conduct

This week we're looking at E1 - Climate change

ESRS overview E1
Here are 13 questions connected to different areas within E1 that you could ask your suppliers to get a first overview of gaps and risks in your organization:
  • Integration of Sustainability-Related Performance in Incentive Schemes: Does your organization include sistainability-related performance, especially concerning climate change mitigation, in employee incentive schemes?

  • Transition Plan for Climate Change Mitigation:
    Does your organization have a documented transition plan specifically addressing climate change mitigation?

  • Material Impacts, Risks, and Opportunities Related to Climate Change:
    Does your organisation systematically identify and assess material impacts, risks, and opportunities related to climate change?

  • Policies Related to Climate Change Mitigation and Adaptation:
    Has your organization established formal policies for climate change mitigation and adaptation?

  • Actions and Resources in Relation to Climate Change Policies:
    Has your organization implemented specific actions and allocated resources for your climate change policies?

  • Targets Related to Climate Change Mitigation and Adaptation:
    Does your organization have defined targets for climate change mitigation and adaptation?

  • Energy Consumption and Mix:
    Does your organization monitor and report on its energy consumption, including the mix of renewable and non-renewable sources?

  • Energy Intensity Based on Net Revenue:
    Does your organization calculate its energy intensity based on net revenue?

  • Gross Scopes 1, 2, 3, and Total GHG Emissions:
    Does your organization track and report its total greenhouse gas emissions, including Scopes 1, 2, and 3?

  • GHG Intensity Based on Net Revenue:
    Does your organization measure and report its greenhouse gas emissions intensity in relation to net revenue?

  • GHG Removals and GHG Mitigation Projects Financed Through Carbon Credits:
    Has your organization engaged in greenhouse gas removals or financed GHG mitigation projects through carbon credits?

  • Internal Carbon Pricing:
    Does your organization use internal carbon pricing as part of its climate change strategy?

  • Potential Financial Effects from Material Physical and Transition Risks and Opportunities:
    Has your organization evaluated the potential financial effects arising from material physical and transition risks and opportunities related to climate change?

Hope this helps paint a roadmap for your efforts, stay tuned for updates.

If you have any questions related to procurement or want to know how our tools can automate your contracts to remain compliant to new directives, feel free to book a 15 minute call here.