This is how duty turns into free choice
In March 2018, the CSR Directive Implementation Act officially came into effect retroactively with effect from 01/01/2017. The standard requires certain large, publicly traded organisations and public-interest entities to disclose non-financial information.
As a result of the directive, the organisations concerned should develop a long-term strategy for the continuous improvement of their sustainability performance. This is generally done by publishing non-financial information in the CSR report. This report informs shareholders and stakeholders primarily about management strategy by documenting the risks and consequences of ecological, social and employee-relevant aspects. In addition, a CSR report comprises information on the corporate views with regard to corruption and bribery. The directive does not explicitly require the non-financial report to be verified. However, for transparent and authentic reporting, testing by external TÜV NORD CERT specialists offers significant advantages.
EU-wide we assume that there are currently approx. 6000 companies directly affected by the CSR Directive. Primarily, this includes large publicly traded companies. But even medium-sized companies that are involved indirectly (e.g. via the supply chain of these larger companies) can benefit from CSR / sustainability reports. In general, this applies to all organisations that want to distinguish themselves and stand out from the competition.
In the area of corporate communications, non-financial information becomes ever more important. Stakeholder groups such as investors, corporations, policy-makers or critical consumers demand transparent information about the business activities of organisations that go beyond the purely financial performance indicators. An external verification by specialists from TÜV NORD CERT not only guarantees the fulfilment of all requirements of the EU Directive on the disclosure of non-financial information, but also offers comprehensible, future-relevant advantages.
Advantages - Internal
In the long term, your corporate strategy is designed for sustainable growth. Our auditors use existing systems (e.g. management systems) to assess whether strategy and targets are in line with the identified options for action. In this connection, strengths and weaknesses of data collection and reporting are formulated and potentials for increasing efficiency are revealed. At the same time, the audit effort for the verification of sustainability reporting can be significantly reduced.
Advantages - External
CSR and sustainability reports increase the transparency of reporting and increase the credibility towards shareholders and stakeholders. The verified activities for sustainable business open up or secure long-term business relationships for you and distinguish you as a future-oriented company.
Organisations affected by the EU Directive have to explain various aspects of their business performance, operating results, the situation of the corporation as well as the impact of all activities. Essentially this includes the following points:
- Summary explanation of the business model
- Description of the concepts pursued by the company, including the due diligence processes applied.
- Results of these concepts (“management approaches”)
- Significant risks resulting from such business activity as well as their handling
- The most important non-financial performance indicators (e.g. classic GRI or EFFAS indicators)
- References to contributions included in the situation report and additional explanations
Obviously, these points also provide a guideline to reporting organisations that are not directly affected by the EU Directive, yet want to issue a holistic performance report.
Existing products / certificates might be eligible as evidence in the sustainability report.
The verification of sustainability reporting is based on recognised standards:
- ISAE 3000
Here, the reporting organisation decides as to whether the entire report or just selected parts are included in the verification engagement. We generally recommend the verification of systems for compliance with the relevant reporting principles. These include stakeholder inclusiveness, materiality, completeness, transparency, balance and clarity, as well as reviewing/assessing the reported information for accuracy and correctness.
If a reporting guideline is used to create the sustainability report, its requirements need to be be implemented holistically. Relevant reporting guidelines are a.o.:
- GRI Sustainability Reporting Standards (GRI SRS)
- German sustainability code (DNK - Deutscher Nachhaltigkeitskodex)
- UN Global Compact
The verification confirms that a corresponding reporting guideline has been implemented and that the statements made in the report are correct and reliable. Following successful verification, you will receive an assurance statement (no proof mark or certificate!), that is a summary report of the work carried out and its results.
The path to the assurance statement
- Inquiry by the customer for assurance of sustainability reporting
- Completing of the request for information questionnaire
- Drafting of proposal by TNC on the basis of the information provided
- Initial meeting: Coordination of assurance scope (targets, reporting guideline, verification standard & level of assurance, system boundaries, indicators)
- Drafting of the verification plan
- Verification: Preliminary examination of submitted documentation, verification on-site, correction phase
- Closing meeting
- Drafting of report and issuance of the assurance Statement
The verification cycle depends on the publication interval of the sustainability report.