Get Ready For The CSRD

As of the 6th of July, CSRD has been transposed into Irish law. Companies in scope will be required to report annually in their director’s report on environmental, social and governance (ESG) and human right matters according to the European Sustainability Report Standards (ESRS). An estimated 50,000 companies across the EU are expected to be affected by the Corporate Sustainability Reporting Directive (CSRD) with many of these organisations located in Ireland. 

The sustainability information reported will be subject to a limited audit until the adoption of reasonable sustainability assurance standards by the Irish Commission in 2028.

How can the Irish real estate industry prepare for the CSRD? 

Even if your organisation is not yet in scope for sustainability reporting, it is likely that your customers, or your supply chain will be. Below are some key actions to prepare for the CSRD.

Who needs to comply with the CSRD and when? 

The phased implementation of the CSRD directive spans from 2024 to 2029, with varying deadlines based on factors such as company size and listing status. Below is an overview of the three phased approach, the rules will start applying between 2024 and 2028: 

• From 1 January 2024 for large public-interest companies (with over 500 employees) already subject to the Non-Financial Reporting Directive (NFRD), with reports due in 2025; 
• From 1 January 2025 for large companies that are not presently subject to the NFRD (with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets), with reports due in 2026; 
• From 1 January 2026 for listed SMEs, with reports due in 2027. SMEs can opt-out until 2028. 

Given the detailed disclosure requirements and growing demand for transparency, it is likely companies not directly in scope will also see increased investor pressure to publish information in line with the CSRD.

What is required? 

The CSRD contains 82 disclosures and over 1000 data points to choose from. While there are certain mandatory disclosures, only data points and disclosures picked up by the Double Materiality exercise, which is a mandatory element of the CSRD process. Companies are also required to report on EU Taxonomy Alignment as part of the disclosures.

There are 12 ESRS that outline disclosures and metrics covering various corporate sustainability reporting aspects grouped into four categories: 

1. General Disclosures: Encompassing general principles and disclosures applicable across different areas, including a methodology for a Double Materiality and EU Taxonomy Alignment Disclosure. 
2. Environmental: Addressing topics such as greenhouse gas emissions, climate change, pollution, water and marine resources, biodiversity, ecosystems, energy efficiency and circularity.
3. Social: Considerations related to the company's workforce, workers within the value chain, impacted communities, and consumers or users. 
4. Governance: Focusing on aspects of business conduct and governance practices. 

What can you do now? 

The CSRD will have implications for the Real Estate industry. Real Estate organisations, investors occupiers and the supply chain will all require engaging with the CSRD to manage its implications on the wider business strategy. There are several key topics that companies can start considering now: 

• Perform a double materiality assessment to determine which ESG issues are material, which includes an analysis of financial and Environmental/social materiality. 
• Set measurable ESG goals and targets in line with the UN Sustainable Development Goals and peers within the industry. 
• Develop an ESG strategy that includes a strategic roadmap and policies required to comply with EU and Irish Legislation.
• Establish a baseline for setting targets and a procedure for collecting and reporting on the data points, set out by CSRD guidance.

How can CBRE help? 

CBRE has established a four-step process to get companies ready for the disclosure requirements and the topics considered above. Compliance with the CSRD is fast proving itself as a central issue for companies wishing to pursue an effective & ambitious ESG strategy regardless of its size and listing status. It is expected that 94% of companies not within the CSRD scope will have a desire to comply with the requirement to maximise their Sustainability Performance according to a survey conducted by Workiva in 2023.

CBRE can assist with scoping the Disclosures and increasing Sustainability Performance for the twelve mandatory ESRS standards through the Double Materiality process. We can also assist with EU Taxonomy alignment, which is a disclosure requirement under the CSRD.