How to drive your ESG agenda with financial well-being

Remind me: what is CSDR, and how is it driving ESG efforts?

The Corporate Sustainability Reporting Directive (CSDR) is an EU regulation that requires companies to share detailed information on their environmental, social, and governance (ESG) practices. Its goal is to improve transparency, allowing anyone to better assess companies' sustainability efforts and societal impact.

Building on the Non-Financial Reporting Directive (NFRD), the CSDR introduces stricter, standardized requirements to ensure reliable ESG reporting across the EU. This encourages companies to integrate sustainability into their operations, enhancing accountability, stakeholder trust, and alignment with EU climate goals, such as the Green Deal and carbon neutrality by 2050. Beyond sustainability data, CSDR emphasizes social and governance factors, such as diversity, inclusivity, labor rights, and ethical governance, supporting a more balanced approach to sustainability.

Which companies must report under CSDR?

Under the CSDR, companies meeting specific criteria are required to disclose their sustainability practices. This applies to large EU companies meeting at least 2 out of these 3 criteria: over 250 employees, annual net turnover above €40 million, or assets exceeding €20 million. It also applies to publicly listed companies, non-EU companies with substantial EU operations, and Public Interest Entities (PIEs), such as certain financial institutions and insurance companies. Reporting obligations will be phased in, starting in 2024 for large companies previously subject to the NFRD.

How does a financial well-being program support your ESG agenda and CSDR compliance?

CSDR requires companies to report on various ESG factors, including social and HR-related data. A financial well-being program aligns well with the Social criteria of ESG, as it promotes employees' financial health, resilience, and engagement.

Initiatives like Equip demonstrate a commitment to employee well-being, helping reduce financial stress, improve talent retention, and strengthen loyalty—key social impact areas under CSDR reporting requirements.

Curious to see how our clients incorporate Equip into their ESG framework? Check out the STX 2023 Sustainability Report: https://stxgroup.com/article/stx-group-releases-their-2023-sustainability-report/.