As a Chief Legal Officer (CLO), your leadership will be essential in navigating the complex terrain of the coming Corporate Sustainability Reporting Directive (CSRD). This transformative regulation, commencing next year, will require thousands of companies based in and doing business with the European Union to disclose comprehensive data on their environmental, social, and governance (ESG) practices. 

Worldly is here to help you get started. We’ve put together the following takeaways for leaders in your role. 

You need new expertise for these new regulations.

Sustainability may not have previously been on your regulatory compliance radar — or at least, not with the specificity demanded by CSRD. Certainly, value chain sustainability is a highly nuanced field, which requires tremendous expertise across multiple categories. The technical regulations outlined in the European Sustainability Reporting Standards (ESRS) set precise requirements that companies must consider in their disclosures: everything from climate change mitigation to ecosystem restoration to worker health and safety.

At Worldly, we find that many legal teams don’t have deep in-house expertise across each of these topics. Relatedly, your team might not have vendors or technologies designed for sustainability data collection, analysis and reporting either. Many companies will need to start collecting data right away in 2024 to support CSRD disclosure that will start in 2025.  So, it’s important to begin bringing new expertise onboard now — whether through additional headcount, or external support. Moreover, understanding the data and technology those teams will need to support their compliance efforts is particularly crucial. 

The time to prepare is now. 

For many companies CSRD compliance begins in 2025. Given that there is an enormous amount of data to be collected and analyzed across often sprawling value chains, compliance may consume much of your team’s time. Your legal expertise is vital in establishing robust data governance frameworks that uphold the highest standards of integrity.

Unfortunately, many organizations have not even researched the requirements of the new regulation. From determining material sustainability issues, to defining performance baselines, to setting impact improvement goals, compliance with CSRD is not an endeavor that can be rushed or left to the last minute. We recommend that CLOs begin now educating themselves and their teams, and mobilizing within their businesses so that they are prepared to respond in a timely manner. 

Compliance is an opportunity to burnish your company’s reputation.

CSRD compliance isn’t just about ticking regulatory boxes; it’s an opportunity to foster trust and transparency with investors, customers, and other stakeholders. And this directive is only one of an increasing number of sustainability regulations that will affect your business. 

As sustainability data collection becomes a routine facet of annual corporate reporting, savvy companies will use disclosure as a chance for competitive differentiation. For many, CSRD compliance can be an opportunity to communicate a commitment to social responsibility, demonstrate efforts towards emissions reduction, and provide data to support any product sustainability claims. 

As a Chief Legal Officer, you are on the front lines of the changes brought by CSRD. Certainly, this is an undertaking that will require a collaborative approach among the legal, compliance, sourcing and sustainability professionals at your company. At Worldly, we believe a successful response will necessitate strong alignment between people, processes, and technology — and we’ve built our platform with this in mind. 

With industry-leading assessments and tools for supply chain data collection, Worldly can be a key piece of your CSRD compliance strategy. Get in touch to learn more.