EU Corporate Sustainability Reporting Directive (CSRD) 
On February 23, 2022, the EU Commission accepted a proposal for the Corporate Sustainability Due Diligence Directive which lays out the obligations that will promote a sustainable and responsible approach that respects human rights and the environment in their global value chains of companies. The proposal will be submitted to the EU Parliament and Council, and will be adopted into member countries’ legislation after it is passed. The aforementioned Directive is expected to enter into force on January 1, 2024, and be applied retroactively to 2023. 

The Directive will replace the EU'S non-financial reporting (CSR Reporting) regulations. The new legislation is essentially updating CSR reporting rules to new sustainability practices. The directive holds companies responsible for monitoring, determining, assessing, preventing, ending, and improving matters related to human rights and environmental effects throughout their subsidiaries and value chains.

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CSR Reporting

The Global Reporting Initiative (GRI) develops rules and standards to integrate Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) efforts into sustainability reports in coordination with companies, governments, and nongovernmental organizations (NGOs). The standards help improve the quality and comparability of the reports.

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GRI Standards

The Carbon Disclosure Project (CDP) was established in 2000 on a voluntary basis. It is a prominent NGO that focuses on reducing the effects of climate change. It has a diverse range of corporate data on climate change, water, urban sustainability, and forests. It functions in close cooperation with other international institutions, namely with the Global Reporting Initiative (GRI).

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CDP

The International Organization for Standardization (ISO) standards, primarily the ISO 14001 standard, provide a comprehensive framework on Environmental Management Systems. The ISO 14000 standards family is related to the 13th sustainable development goal, “Climate Action.” ISO 26000 standards focus on social responsibility matters in sustainability and promote the creation of a management system in the area. ISO 31000 draws a framework on the Risk Management System. It helps identify risky situations in advance through analyses. The EU Environment Management System is compliant with the ISO 14001 specifications. It can be used in any sized company in any field. It covers all environmental subjects from energy use to waste. It aims to include everyone in the implementation efforts.

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ISO Standards 

Established in 2001 by public, private, and nongovernmental entities in Germany, the Sustainable Development Council published the German Sustainability Code (DNK) in 2010. The purpose of the code is to provide support for 20 criteria in sustainability such as CSR, reporting, training, and so on. The DNK criteria are strategy, materiality, objectives, depth of the value chain, responsibility, rules and processes, control, incentive schemes, stakeholder engagement, innovation and product management, usage of natural resources, resource management, climate-relevant emissions, employee rights, equal opportunities, qualifications, human rights, corporate citizenship, political influence, and conduct that complies with the law and policy. These criteria are compliant with GRI and the European Federation of Financial Analysts Societies (EFFAS) principles. 

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DNK

Blue Competence is a sustainability initiative held under the Mechanical Engineering Industry Association (VDMA) to underline the role of machinery and equipment manufacturing in the creation of energy- and resource-efficient facilities and systems. The Blue Competence sets out 12 sustainability principles under four headings. Focusing on the strategic, operational, cultural, and communication aspects of sustainability, Blue Competence regards sustainability as a holistic action in considering the Brutland Commission's reports and the German Council for Sustainable Development’s (RNE) definitions.

EcoVadis offers holistic sustainability assessments to companies. EcoVadis assessments include a broad range of non-financial governance systems in terms of environment, employee and human rights, ethics, and sustainable supply. Each company is assessed according to its size, position, and industry. These evidence-based assessments are graded on a percentage basis (0-100) and consolidated into easy-to-read point cards. The scores are also awarded bronze, silver, or gold medals. Additionally, scorecards provide guidance for assessed companies to focus their sustainability efforts on strengths and improvement areas, and develop corrective action plans to enhance their sustainability performance.