FAQ CSRD

CSRD is a legislative act (“a law”) from the European Union which obligates companies to conduct sustainability reporting. The legislative act says

I) who must report and

II) in what time frame.

The time frame is as follows:

• Reports published in 2025, covering the financial year of 2024: to be published by large companies with over 500 employees or large companies of public interest.
• Reports published in 2026, covering the financial year of 2025: the scope expands to include all other large companies.
• Reports published in 2027, covering the financial year of 2026: the scope expands to include publicly listed small- and medium sized companies.

ESRS tells companies what they have to report about. The ESRS is comprised of:

• Cross-cutting standards (general questions)
• Topical standards (specific questions)
  • Environmental
  • Social
  • Governance
• Sector-specific standards (questions related to different sectors, not yet published)

All together there are thousands of specific questions (called data points) regarding emissions, strategies, worker policy etc.

The ESRS is undergoing constant improvements, a new set is expected in a couple of years.

A data point is the official term for a question or a parameter in the CSRD report. Companies have to fill in data points, which means they have to answer questions.

For reference, an excel-table containing all data points can be found here.

When answering questions in the ESRS, companies have to consider I) how they impact their surroundings and II) how their surroundings impact them. This is called a double materiality assessment.

Companies typically make assessments, which are called double materiality assessments, before they start filling in data points, to make sure they understand the complete impact they have.

An example: Before answering data points a chemicals company might create an assessment where they state:

• They impact the surroundings through the usage of chemicals which harm the environment.
• The surroundings impact them in the form of the laws on what chemicals they are allowed to use, and consumers might dislike the chemicals in the product.

In practice, a double materiality assessment could be infinite if the companies do not make any restrictions on what they include in it. Therefore, ESRS specifically states that aspects which are included need to be of significance.

The EU has published guidelines for how companies are to assess what is significant to mention in their double materiality assessment.

In practice, it is up to each company to decide what to include in their double materiality assessment.

Nevertheless, if something significant is intentionally left out, this may be noted by the auditors and could potentially lead to the sustainability report not being approved.

When filling in data points, companies have to consider their entire value chain (i.e. all the companies they do business with) which is created when providing their product/service. This is in order to make sure companies cannot hide any negative aspects through their suppliers.

An example of a value chain:

• A chemical company produces chemicals and sells them to a cleaning company
• The cleaning company uses the chemicals when cleaning a hotel
• The hotel provides services to customers

No. The CRSD make the businesses declare a lot of information about their environmental impact, but not to make goals for reducing this impact. It is thought that funding and finance will float to the companies with the best performance on sustainability, and that this is the main incentive to improve.

In other words:

CSRD is a legislative act which requires comprehensive declarations of sustainability metrics but does not directly require a specific type of performance or improvements. The rationale behind this is that the end-users of the report, i.e. investors and the public, will, through the open market, require companies to present as good data as possible.

The two terms refer to separate versions of ESRS expected in the future: 

• I) LSME, Listed Small- and Medium sized Enterprises (companies): this will be a somewhat simplified reporting standard to alleviate the burden on smaller companies. The final version of this standard is not yet published. 
• II) VSME, Voluntary Small- and Medium sized Enterprises (companies): this standard is completely voluntary and meant for small companies outside of the CSRD scope. The rationale for reporting in accordance with it is that it is built to answer questions that might be asked in value chain assessments. The final version of this standard is not yet published. 

The Nordic Swan Ecolabel’s two methodologies:

• MECO (Material, Energy, Chemicals and others): helps illustrate the impacts a product/service has in different cycle-based stages
• RPS (Relevance, Potential, Steerability): helps evaluate the importance of the impact and how it can be improved.

These two methodologies can help companies: I) quickly perform a double materiality assessment and followingly: II) helps them fill in data points, while also: III) enabling the companies to present good data in their sustainability report.

When conducting the double materiality analysis, the company must also have dialogues with different stakeholders. The experts at the NSE can give valuable input to the companies because of their extensive knowledge about the products, the sector and the environment.

Overall, the Nordic Swan Ecolabel’s criteria correspond well with the CSRD methodology. and provides useful input on many datapoints.

We can't, however, claim that the criteria provide full coverage. Recently we have performed a pilot study of the match between CSRD and our criteria for cleaning services.

We documented that there is a good match, especially when it comes to the cross-cutting standards/ESRS’ with general requirements (ESRS 1), general reporting requirements (ESRS 2).

There is also a good match when it comes to the topical standards for climate, chemical use and pollution, water resources, biodiversity, resource consumption, circular economy and business conduct. Within all these standards the Nordic Swan Ecolabel provides valuable input.

No, if your company is obligated to report under CSRD, you will be required to do so. However, having a license for the Nordic Swan Ecolabel can be helpful when conducting the necessary analysis of your company’s environmental impact and corresponding risks and opportunities.

Also, the process of fulfilling the NSE criteria will provide many relevant datapoints to the reporting.

The Nordic Swan Ecolabel is an important instrument for achieving the Nordic countries’ goals for sustainable consumption and production. To achieve this, and to enhance the “use-value” of our labeling scheme, we continuously work to align our criteria and work with relevant EU initiatives regarding sustainability such as CSRD.

However, we need to emphasize an important distinction: on one hand, the ecolabel provides evidence of environmental performance while CSRD, on the other hand, is a non-financial reporting scheme encompassing companies that perform both sufficiently and poorly in sustainability terms.

No, while the NSE deals with the production of goods and services, CSRD takes the company as a whole into account. This includes the environmental side of production, social factors as well as governance.

The Nordic Swan Ecolabel is a valuable asset to companies, with the potential of saving time in a CSRD report. This since the work done through the previously mentioned MECO and RPS methodologies means that plenty of information for the double materiality assessment is already available for companies.