Simon McKeever
Chief Executive, Irish Exporters Association
Discover how the Corporate Sustainability Reporting Directive (CSRD) impacts small businesses and what steps to take for compliance and competitive advantage.
The Corporate Sustainability Reporting Directive (CSRD) stems from the European Green Deal’s climate action objectives, further enhancing companies’ disclosure of climate and environmental data. Ireland has until mid-2024 to transpose the directive, with mandatory requirements likely commencing on or after: 1 January 2024 for public interest entities greater than 500 employees; 1 January 2025 for larger companies greater than 250 employees; and 1 January 2026 for listed SMEs, with an ‘opt-out’ possible until 2028.
CSRD small business implications and preparation
However, many small businesses are unaware of the CSRD or its implications for them. They’ll likely have to report their environmental, social and governance performance in greater detail, including data on carbon emissions, diversity and inclusion initiatives and supply chain management. This could initially strain resources and increase compliance costs.
Certainly, small businesses will have to provide CSRD-related information to larger companies if they are part of their supply chain, as early as 2025, to help them meet reporting obligations under the CSRD.
Small businesses may face increased competitive
pressures as larger companies enhance
sustainability reporting practices.
Government support for CSRD preparedness
We encourage businesses to avail of government support initiatives, such as the Green Transition Fund, and use the Climate Toolkit 4 Business. The toolkit allows businesses to assess their environmental impact and devise improvement strategies. Small businesses impacted by CSRD should initiate discussions with their accountants or auditors for readiness. The Irish Exporters Association (IEA) offers online webinars and runs training courses to support CSRD preparation.
Sustainability reporting boosts competitiveness
Small businesses may face increased competitive pressures as larger companies enhance sustainability reporting practices. Companies demonstrating commitment to sustainability and transparency may enhance their brand image. Conversely, companies lagging in sustainability reporting face reputational risks.
Small businesses must stay informed about regulatory requirements and take the necessary steps to comply. While the CSRD presents challenges for small businesses, it also offers improved sustainability performance, competitiveness, and trust with stakeholders. By welcoming the CSRD, small businesses can position themselves for long-term success in a rapidly evolving business landscape.
For online webinars and CSRD support, visit irishexporters.ie