CSRD – what is it, and how does CSRD impact travel managers?

Just five years after introducing the Non-Financial Reporting Directive (NFRD) in 2018, the European Union (EU) has replaced it with the Corporate Sustainability Reporting Directive (CSRD), which became law on 5 January 2023 and phases in from January 2024. 

NFRD required all large public and private companies in the EU to publish a non-financial report on their ESG performance alongside their annual management report. CSRD is a significant step change. In short, it aims to elevate sustainability reporting to the same standard as financial reporting. It will impact more companies (50,000+ will eventually be required to report compared to 11,700 under NFRD) and strengthen the reporting requirements they must adhere to (1,144 data points). 

Qualifying companies will be required to set emissions targets and report progress towards them, as well as disclose information about their sustainability due diligence process, and actual and potential negative effects of their operations. In doing so, the increased transparency about their environmental and sustainability impact and reporting accountability will give stakeholders greater insight and encourage these businesses to be more sustainable.  

At the initial announcement of CSRD, Czech Minister for Industry and Trade Jozef Síkela explained: “The new rules will make more businesses accountable for their impact on society and will guide them towards an economy that benefits people and the environment. Data about the environmental and societal footprint would be publicly available to anyone interested in this footprint. At the same time, the new extended requirements are tailored to various company sizes and provide them with a sufficient transition period to get ready for the new requirements.” 

 

CSRD and business travel

Assuming you’re reading this as a business travel manager, the big question for you is ‘How will this impact me?’ And the answer is ‘significantly’. 

Firstly, it’s important for travel managers in the UK, US or other non-EU countries to recognise that CSRD is likely to apply to them and it includes ‘EU companies meeting two out of three criteria of: 

• more than 250 employees,  
• €40 million turnover, or  
• €20 million on their balance sheet.  

It also applies to smaller EU companies that are publicly listed, but significantly, also to non-EU businesses with net turnover in the EU of more than €150 million.’ 

Secondly, according to industry trade magazine BTN Europe, for the first mandatory reporting period companies must disclose their business travel emissions, plus a statement of their targets for business travel for 2025, 2030 and 2050 (although companies with fewer than 750 employees can omit Scope 3 reporting for Year 1).  

Here are some specific ways in which the CSRD will impact business travel managers: 

• Increased data collection and reporting obligations: Business travel managers will need to collect data on a wider range of sustainability metrics, including GHG emissions, waste generation, and water consumption. They will also need to develop new reporting processes to ensure this data is accurate and compliant. 
• Development of new travel policies: Business travel managers will need to develop new travel policies that promote sustainable travel options. They will also need to work with employees to educate them about the benefits of sustainable travel and encourage them to adopt these options. 
• Supplier selection and management: Business travel managers will need to assess their travel suppliers’ sustainability credentials and choose suppliers committed to reducing their environmental impact. They will also need to work with suppliers to develop and implement sustainability initiatives. 
• Communication and stakeholder engagement: Business travel managers will need to work with other departments to develop and implement effective communication strategies that raise awareness of the company’s sustainability efforts. They will also need to engage with stakeholders, such as employees, investors, and customers, to answer questions and address concerns about sustainability. 

CSRD will also mean travel managers as individuals will likely become more accountable for their organisation’s business travel sustainability strategy, target-setting, monitoring and achievements. Something that may sound like additional unwanted pressure but could also have a positive upside: it will undoubtedly help to elevate the status of travel managers as they take a leadership role in helping their companies meet the requirements of the CSRD and reduce the environmental impact of business travel.  

 

This material is current as at December 2023 and general in nature. It is not intended to be a comprehensive review of all developments in the law and in practice and does not constitute legal advice. While we use reasonable skill and care in the preparation of this material, we accept no liability for use of and reliance upon it by any person.

How CTM can help?

At CTM, we believe that travel is important to business performance and that a physically connected world can drive greater cultural understanding, cohesion and collaboration which enables communities and businesses to prosper.

We have developed tools which enable our customers to better understand the environmental impact of their travel and solutions to support our customers in reaching their climate neutrality goals.

CTM can help you to budget, monitor, transfer, report, offset and – ultimately – reduce your organisation’s carbon emissions thanks to our end-to-end technology solution Climate +, which includes our proprietary online booking tool Lightning.