This week’s reading time: 7 minutes

Welcome to another edition of The Green Executive Briefing. In under 10 minutes, you’ll be fully updated on the latest happenings in Sustainability and ESG every Tuesday at 8am EST. 🌎

We sift through a vast array of articles and data from trusted sources, distill the information, and present it to you in simple, bite-sized pieces every week. 🌍

Subscribe Today 🌍

In this edition, we'll cover:

• Global Reach: EU's Corporate Sustainability Reporting Directive (CSRD) affects US companies with significant EU operations (€150M+ EU turnover for two consecutive years plus EU presence)

• Timeline Relief: February 2025 "Omnibus" proposal recommends two-year reporting delays and scope reductions

• Scope Changes: Proposal narrows focus to very large companies (1,000+ employees) and streamlines disclosures

• First Deadlines: Largest EU companies report in 2025 (FY 2024); US companies generally start 2029 (FY 2028)

🌟 Spotlight: Dylan Brown

Dylan Brown is an expert in GHG Accounting, Sustainability Strategy, and Environmental Permitting. The coolest thing about him? He’s a big Philadelphia Eagles fan.

“I’m an Environmental, Health & Safety (EHS) professional with a strong focus on ESG and sustainability. I ensure risk mitigation strategies align with operational safety and regulatory compliance.”

Follow Dylan on LinkedIn here.

Want to get featured in the spotlight? Reply to this email: [email protected]

Intro

Understanding CSRD's Reach

The EU's Corporate Sustainability Reporting Directive dramatically expands sustainability reporting beyond what most US companies currently track. Its scope extends globally to US-based companies with substantial EU business.

Who Must Comply? A US company falls under CSRD if it:

• Generated over €150M in EU revenue for two consecutive years

• Has either a large/listed EU subsidiary or an EU branch with €40M+ turnover

Once in scope, companies must report sustainability information for their entire global operations, not just EU entities. This comprehensive mandate introduces "double materiality" reporting - covering both how sustainability issues affect the business financially and how the business impacts society and environment.

Main

Regulatory Updates: The Omnibus Initiative

In early 2025, the European Commission announced an "Omnibus Initiative" with two key changes:

Reporting Postponement: Two-year delay for companies originally required to report from 2025 onwards. Companies slated to begin reporting on FY 2025 would instead report on FY 2027 (published 2028).

Simplified Scope: Only "large undertakings" with 1,000+ employees (and €50M+ turnover or €25M+ assets) would be required to report, removing roughly 80% of companies from CSRD's original scope. The proposal also abandons sector-specific standards and reduces mandatory disclosure data points.

These proposals await EU legislative approval and could mean fewer US companies fall under CSRD, with those still in scope facing less onerous requirements.

Main

Implications for US Companies

Even with proposed changes, CSRD creates significant reporting obligations for US companies with a strong EU footprint:

Comprehensive Reporting: In-scope companies must publish annual sustainability reports covering climate metrics, environmental impacts, workforce issues, human rights, anti-corruption, and more.

Double Materiality: Companies must evaluate sustainability through both financial and social/environmental lenses, potentially uncovering reporting topics not traditionally included in US filings.

Compliance Timeline: Most US companies with significant EU turnover would report for FY 2028 (filed 2029), with possible delays to 2029-30 under the Omnibus proposal.

Assurance Requirements: CSRD mandates external assurance of sustainability information, holding it to similar rigor as financial data.

Key Dates and Deadlines

• January 5, 2023: CSRD officially entered into force

• FY 2024: First companies (large EU public-interest entities) begin reporting

• FY 2025: Originally, other large EU companies (including subsidiaries of US companies) would start reporting (Omnibus proposes delay to FY 2027)

• June 30, 2024: Expected adoption of standards for non-EU companies

• FY 2028: US companies meeting criteria begin reporting, with first reports in 2029

Main

Preparation Roadmap

1. Assess Exposure: Calculate EU-based revenue and determine if any EU entity qualifies as "large"

2. Monitor Updates: Stay informed on CSRD implementation and Omnibus proposal progress

3. Build Cross-Functional Team: Include finance, sustainability, legal, IT, and audit departments

4. Conduct Gap Analysis: Compare CSRD requirements to current reporting practices

5. Develop Implementation Plan: Create timeline for framework selection, system upgrades, and staff training

6. Plan for Assurance: Engage external auditors early to understand expectations

7. Seek Expert Support: Consider specialized consulting for compliance guidance

Main

Strategic Opportunity

Rather than treating CSRD as mere compliance, use it to integrate sustainability into core business strategy. The process will prompt valuable conversations about long-term risks and opportunities. Companies that embrace these insights can improve operations and discover competitive advantages.

Main

Common Questions

Does CSRD really apply to American companies? Yes, if your US company has significant EU operations meeting the thresholds. The Omnibus proposal may raise this bar to €450M EU turnover.

When do we start reporting? Most US companies falling under CSRD will report by 2029 for FY 2028, with possible extensions under the Omnibus proposal.

Will our existing sustainability reporting suffice? Current frameworks like TCFD or GRI are helpful starting points but insufficient for CSRD compliance, which is more prescriptive and broad-ranging.

What are the consequences of non-compliance? Penalties vary by EU member state but could include significant fines, legal action, or operational restrictions, plus reputational damage and business partner concerns.

Should we slow preparations given potential changes? No. Continue preparing based on current requirements. If changes materialize, you'll be ahead of the curve; if not, you'll avoid last-minute scrambling.

WRAPPING UP

The CSRD represents a new era of ESG transparency that extends beyond Europe's borders. Whether your first report is due in 2025 or 2028, the time to begin preparation is now.

P.S. When you’re ready, here’s how I can help you:

1. Download our Dashboard GHG Accounting Scope 1, 2 & 3. Customize it with your organization's numbers to build a compelling business case.

2. Refer 2 other sustainability leader (see “Click to Share” button below)

3. Book a Consultation: Click HERE

   1. GHG Accounting Strategies (Scope 1, 2 & 3) 

   2. ISO 14001 Compliance (Environmental Management)