Applicable since 2024, the CSRD requires companies to publish a considerable amount of information. In its wake, the CS3D, the European translation of the French duty of vigilance, requires them to map their supply chains in order to control risks relating to human rights, ethics, and the environment.
With the Omnibus package, the European Union has embarked on a thorough review of this framework :
- Reduction of the scope of the CSRD: only the largest companies remain affected (more than 1,000 employees and turnover exceeding €450 million), which would reduce the number of companies directly affected by around 80%.
- Easing of reporting requirements: mandate given to the Commission and EFRAG to drastically reduce the number of ESRS data points and clarify requirements deemed ambiguous, which would result in a reduction of nearly 60% in mandatory data points.
- Adjustment of the CS3D: reduction of the scope to companies with more than 5,000 employees and €1.5 billion in revenue, and focus on tier 1 suppliers and other direct partners.
In light of these announcements, there is a strong temptation to deprioritize these issues, considering them less urgent.
At KYU, we believe exactly the opposite :
- The expectations of customers, investors, banks, and employees are not diminishing ;
- Regulatory pressure is focused on a smaller core of companies, which will be subject to even greater scrutiny ;
- The ability to control one’s value chain is an essential lever of resilience in the face of growing uncertainties and threats.
Our conviction: the real question is not “how many data points?”, but “what value can we create with this work ?”
1. What if we remembered the “why” before getting bogged down in the “how” ?
We believe it is vital to restore meaning to these processes, as we are convinced that dual materiality analysis can be an exercise that supports strategic vision and sustainable growth in corporate value. By working on both the risks and opportunities of ESG issues, the organization focuses on protecting its value and its development, taking into account its entire chain, the people and ecosystems that contribute to it.
This systemic approach, while seemingly daunting at first glance, is a powerful lever for identifying areas of exposure and new sources of differentiation and growth compared to competitors. It also increases value for customers, investors, and employees, who have increasingly high expectations in this area.
Our advice: seize this tool and use it as a lever for strategic transformation in your company !
2. How can we be effective ?
The scope and volume of data to be reported are decreasing: this is an opportunity to clarify the approach by reinforcing its meaning. The aim is to ensure consistency and work on the traceability and robustness of the data.
To do this, we recommend structuring the approach around four pillars :
- Set up an interdepartmental task force: CSR, Finance, Purchasing, Legal, HR, Operations, Risk Management, IT, etc. to validate materiality thresholds, oversee value chain mapping, and decide on the level of ambition beyond the strict regulatory minimum ;
- Capitalize on existing resources by building on risk mapping and work already carried out on due diligence, anti-corruption, data protection, climate, etc., to avoid rebuilding a “CSRD” silo that is disconnected from the rest ;
- Map the value chain, starting with tier 1 suppliers as required by regulations, then gradually expanding visibility to at-risk sectors and geographies using reference data sources, sector studies, and NGOs.
Combine top-down and bottom-up approaches with an executive committee framework to set ambitions, priorities, and risk appetite, then mobilize business units, subsidiaries, industrial sites, and operational functions to identify actual impacts, dependencies, and opportunities.
Our advice: prepare the ground as much as possible by adapting the questions to your business and sharing the state of the art widely to raise awareness and help contributors !
3. What next? What about the material issues ?
For most companies, a number of projects have already been underway for several years, whether they involve reducing GHG emissions, fighting corruption, protecting private data, preserving the environment, eco-design initiatives, or employee health and safety. All these initiatives are often out of sync, managed using a variety of tools that are difficult to connect with the company’s value or risks in order to better prioritize them in terms of strategic issues and promote them to stakeholders.
In our view, there are levers that can be used to strengthen value creation :
- Align existing projects with material issues, measure results and their deployment along the value chain, and connect them to a clear trajectory and managed objectives ;
- Empower operations and support functions : Purchasing, at the forefront of the upstream value chain; Engineering, to design products and processes that are less impactful, less polluting, and circular; HR and management, to get teams on board, adapt skills, and bring commitments to life in the field ;
- Deploy a reporting tool adapted to the new framework : reducing data points does not solve the complexity of collecting heterogeneous internal and external data, ensuring its reliability, traceability, and historization, and producing consolidated, auditable indicators that are aligned with the expectations of auditors and the market.
Advice: Connect operational teams directly to monitoring tools, rather than making CSRD an isolated topic for “CSR experts.”
