By Amélie Losanes, Managing Consultant, Sustainable Collaboration
It’s only been a few years since the European Union (EU) introduced the Non-Financial Reporting Directive (NFRD) in 2018 to encourage sustainable investments.
Now it’s been replaced by the Corporate Sustainability Reporting Directive (CSRD), which began its rollout in January 2024. The goal of CSRD is to make reporting on corporate sustainability commitments more transparent, measurable, and comparable. While this is an EU-centric initiative, it’s critical to recognize that this directive will impact most companies around the world, even if they aren’t based in the EU.
Introduction to CSRD
CSRD is a complex piece of legislation that impacts how companies report sustainability information, bringing it closer to the standard expected for annual financial reporting. All large companies and small- to medium-sized enterprises (SMEs) alike will now be required to provide detailed and audited sustainability reports, covering everything from environmental impact to social responsibility.
Keep in mind, CSRD doesn’t just affect companies based in the EU, but also those with significant business operations in the EU, so it will apply to most global companies, regardless of where they are headquartered. Additional reporting requirements covering the supply chain extend the legislation’s potential impact. While the previous NFRD legislation affected some 11,700 companies, it’s estimated that CSRD will affect close to 50,000. The first reports will cover 2024 activity, which means travel managers already need to be thinking about how they’re measuring the environmental impact of their travel activities.
A key element of CSRD is the requirement for companies to undertake a ‘double materiality’ assessment, allowing them to identify which of the 12 key reporting standards (climate change, pollution, biodiversity, etc.) they need to report on based on their sustainability impact, risks, and opportunities.
What CSRD means for business travel
Business travel falls under the category of scope 3 carbon accounting, as identified by the Greenhouse Gas protocol. Therefore, if the ‘double materiality’ assessment determines a company has an impact in the climate change category, they will be required to report on scope 3 emissions, which includes travel emissions.
Companies reporting in this category will also be expected to set specific targets for reducing emissions and list the strategies they plan for doing so, which is likely to include business travel emissions. This is a major change compared with the NFRD legislation.
The legislation sets out a transparent and uniform set of criteria for measuring progress towards achieving targets.
What should travel managers do?
One early action to take as a travel manager is to check in with your company’s sustainability team to confirm if your company will be required to make a CSRD report that includes scope 3 emissions. If so, it’s important to understand how your company’s data will be collected, reported, and audited.
Another priority should be assessing and, if necessary, improving travel policies to focus more on sustainable travel. Plus, you’ll want to evaluate your suppliers’ sustainability approaches to comply with the supply chain requirements in the new legislation.
How can Advito help?
If your company will be making a CSRD report, Advito can support you in the three main required tasks: reporting on emissions, developing a strategy, and setting targets. Advito can also help with the engagement strategies needed to encourage travelers to use greener options and help you reach your sustainability goals. Let’s look at those options in more detail:
- Enhanced reporting with GATE4: Accurate reporting starts with the right methodology. Advito’s ISO-certified GATE4 methodology is the most robust emissions calculation methodology available to travel managers today. It accounts for several key factors that have a significant impact on emissions, such as aircraft type, radiative forcing and more. Certified under the ISO 14000 series, clients can use GATE4 reporting data in their annual financial and sustainability reports. Plus, leveraging our extensive experience with auditors, we can provide valuable support to assist clients in the CSRD reporting process.
- Strategy development and target setting: Advito’s industry-leading Sustainable Collaboration practice can help you set and meet emissions reduction goals through a holistic approach to managing environmental impact. We combine business intelligence to bring data to life, strategic sustainability recommendations, and employee engagement to influence traveler behavior. Our approach focuses on traveling less, traveling better and partnering with sustainable suppliers. We also guide travel and sustainability managers on what are the benefits and risks linked with solutions like offsetting, sustainable aviation fuel and other technologies available to businesses today. We also educate employees on these topics as they are the key to bring the strategy of a business into action
- Engaging employees: Once you have targets in place, we can provide traveler engagement strategies to drive sustainable behavior. For example, by analyzing your data, we can use digital merchandising and targeted messaging in your online booking tool (OBT) to let travelers know about the most sustainable choices to guide their booking decisions. We can also work with your internal communications team to create tailored communications for all your employees and bring sustainability to focus within your organization.
CSRD is no longer a future possibility, it’s here! This means a sustainable business travel strategy is no longer an optional initiative but a must-have. As the initial CSRD report deadline approaches in 2025, which will assess data from 2024 activities, it’s crucial to build a sustainable framework for your business travel program and have a robust strategy in place for measuring travel-related emissions. Contact our team today to learn how we can help.