The entry into force of the CSRD (Corporate Sustainability Reporting Directive) marks a real turning point in the way businesses must report on their sustainability. However, to facilitate this transition, transitional provisions - or Phase-ins, offer a strategic reprieve for certain complex obligations. Here's what that means and how businesses can effectively prepare for it.

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The structure of ESRS: disclosure requirements and datapoints

Les ESRS (European Sustainability Reporting Standards) ** form the basis of the new obligations imposed by the CSRD. These standards frame how companies should publish information about their sustainability performance. Structured in the three ESG categories, they cover topics ranging from greenhouse gas emissions to relationships with local communities. To better understand these obligations and their implementation, it is essential toexamine the structure of ESRs, how they work and how they relate to disclosure requirements and data to be provided.

What is a DR?

Each ESRS standard is composed of Disclosure Requirements (DR), or publication requirements. These DR defines the specific information that companies should include in their sustainability reports.. For example, a DR could require the publication of direct greenhouse gas emissions (Scope 1) or information on the working conditions of employees. These requirements act as building blocks to structure relationships and ensure comparable transparency between businesses.

What are CSRD's more than a thousand data points?

To respond to DRs, businesses must provide datapoints, precise and often very detailed data points. We count more than 1 144 datapoints across ESRs, reflecting quantitative information (such as percentages or emissions in tonnes) and qualitative information (descriptions or policies). This data provides a clear and standardized picture of a company's ESG performance, but it requires rigorous collection and organization.

Thus, the ESRs provide the general framework, the DRs define the expected information, and the datapoints are the basic units for meeting these requirements.. Together, these elements help guide businesses towards greater transparency.

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What is a phase-in arrangement?

Les phase-in offer businesses a time frame to progressively comply with certain ESRS requirements. Depending on their size and resources, businesses may postpone the release of certain information.

An important distinction applies according to the size of the companies: those with less than 750 employees benefit from increased flexibility, which can defer some obligations for up to three years, while larger companies have a more stringent schedule.

This flexibility allows reduce initial pressure while promoting sustainable adoption of new standards. An essential measure in a context where the information requested relates to various fields: environment, social aspects, governance, and much more.

These transitional provisions apply at different levels of the CSRD: on a complete ESRS, on a complete DR, on specific subjects... Let's now go into the details of the information concerned.

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ESRS subject in full to transitional provisions

Among the ESRs affected by transitional provisions, we find theESRS E4, which addresses biodiversity and ecosystems. This subject involves detailed analyses of the negative impacts on biodiversity and ecosystems (desertification, artificialization of soils, insertion of invasive species...), often based on data that is difficult to collect or standardize.

On the side of social themes, all ESRS are concerned by a global phase-in. The ESRS S1 focuses on the company's staff, including information on working conditions, diversity, and employee well-being. For its part, ESRS S2 broadens this perspective to workers in the value chain, highlighting the issues related to the rights of subcontractors and business partners. Their publication may be postponed for 1 or 2 years, depending on the company.

The impacts of economic activities on affected communities are covered by theESRS S3, a standard that requires data on relationships with local populations and the social effects of operations. Finally, theESRS S4 focuses on consumers and end users, exploring topics such as product safety or the social impacts of services provided. These two ESRs can be postponed for 2 years for companies with less than 750 employees.

These standards, while crucial, often require complex methodologies and collaborations with various actors, fully justifying their inclusion in transitional provisions.

Subjects subject to transitional provisions

To see more clearly, here are tables presenting the phase-ins according to the different subjects.

ESRS concerned by phase-ins

DRs concerned by phase-ins

How do you select your transitional arrangements?

When preparing the first sustainability report, the company should carefully choose which topics to differ among its material topics. This strategic choice is based on its level of preparation:

• What data is already available?
• What processes can be accelerated?
• What topics still need time to be properly addressed?

This process requires careful planning, because each choice affects how the company will be perceived in terms of transparency and responsibility, and requires planning in advance what elements to include in its CSR strategy in the next 1 to 3 years.

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The Kiosk tool allows you to easily manage your phase-ins

At Kiosk, we know how complex CSRD obligations can be, especially with transitional provisions. That's why we designed our tool to adapt to the needs of businesses, regardless of their situation. As soon as onboarding, it is possible to configure phase-ins, taking into account the size of the company and its priorities.

Our platform offers total flexibility : whether you want to postpone certain topics to better prepare for them or adjust your priorities over time, everything is done in a few clicks. Thanks to this pragmatic approach, Kiosk helps companies to move forward peacefully in their sustainability approach, by focusing on the essentials, at the right time.

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Conclusion

Phase-ins are not a way to postpone the inevitable, but a strategic tool for building solid and relevant sustainability relationships. By combining a progressive approach and adapted tools, companies can meet the CSRD challenge while turning this obligation into an opportunity.

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