The Omnibus & CSRD compliance across borders: managing ESG requirements in global operations

More about Rachel Lowe:

Rachel Lowe is a special regulatory counsel at Proskauer, specialising in sustainable finance and corporate sustainability regulation. She regularly advises on the Corporate Sustainability Reporting Directive (CSRD), including analysis of its applicability for large international group structures.  Rachel also supports clients with SFDR, Taxonomy Regulation, EU MiFID and AIFMD sustainability requirements and the UK’s SDR (including TCFD).

Webinar transcript

Anne-Marie Schoonbeek | 00:06
Hey everyone, good morning, afternoon, perhaps even evening, depending on where you are today dialing in from. We are right on the dot, dialing in at 3pm here in the UK. What I'll do is I'll give folks a bit of a chance to dial in. I see there's already quite some interested attendees, so that's great to see. And I think I will get to it later, but the timeliness of this topic probably is really driving the interest today. We will for those of you that have registered to attend, there is a recording that we are doing at the moment, just FYI, this is being recorded this session, but we will gate it as safe. It's a safe asset. What I'll do is, as I said, I'll give people one or two minutes and then make yourselves comfortable. This will be a 45-minute session. We will be Hot off the press, sharing a lot of insights.
So definitely stay tuned and take your notebook. I'm sure we can learn a lot today from, particularly from my co-host, but we're excited to get going. And with that, I'll do another welcome just for those that now joined. Welcome everyone to this afternoon's morning/evening session. My name is Annemarie. I will introduce myself more properly soon. But we're here today for our webinar on the topic of CSRD compliance across borders. Specifically how to manage ESG requirements in global operations. Now, that was the topic we had at hand. Of course, given what's happening this week and what has happened yesterday, specifically around the omnibus announcements. We have been very agile and my co-host has been very willing to jump on that agile train with me. And we'll make sure that today to actually expand the agenda to cover what are the most recent developments we've, and again, this is still draft proposal and we'll hear lots about that, but it would be a miss to have a session around the topic of CSRD and not kick off with the omnibus development.
So As a reminder of today's agenda, I'll go through a bit more about myself, but mainly my guest speaker today, Rachel Doe, will then go into a brief presentation about what the key takeaways and insights are from those Omnibus developments. We will then have a dedicated section, particularly where Rachel will speak about the perspective on how that topic at hand that we started with, how does one manage CSOD requirements when operating global operations, whether that's because you're multinational, whether it's because you're investing across borders, whatever element you want to look at, we'll take that perspective. Throughout what you will find in the usual Zoom functionality, there is a chat functionality. You should be able to launch and type any questions you have as we go along. What I'll be doing is I'll be monitoring the Q&A inbox where I can. I will potentially already answer them through the chat window itself. But as you can see, the agenda permits for a specific Q&A at the end. We will...
Yeah, we will moderate which the questions we'll pick up. I will kindly ask Rachel or where I can myself give some context. But looking forward for this to be very much an interactive session.
So do come with your Q&As through use that functionality because I'm sure if you have a question, other folks may have the same on their minds. So with that introduction of the overall agenda, again, omnibus development and then particularly going into the topic of Managing CSOD across a multinational situation. Let us start with who do you have with us or who do you have with yourself today? I'll start with myself. As I have been speaking, my name is Annemarie Schoonbeek. Different versions are possible. But I'm dialing in today as the CEO and co-founder of KEY ESG. We are a sustainability software provider.
So we're a tech platform. And we help our customers Those could be organizations, can be financial investors around the topic of, for instance, CSOD, but more generally helping them navigate and operate in a world of sustainability, reporting, management, and monitoring. Now, particularly given today's agenda item, I wanted to flag a few credentials. Again, you will mainly hear from my co-host, but I do have spent quite some time in the domain myself as well. I'm part of the XBRL, which is the digital tagging language for the ESG working group there. As well as we have taken part in the AFRA field test. In short, we're trying to be as close as possible to those developments in Brussels because they keep coming. I bring both a background in law and business. I'm sure for those folks that are dialing in, I feel like by now anyone working in this space feels like they have to become almost a legal expert overnight.
So I'm doing my best. I am very happy to be joined today by Rachel Lowe here. Already dialed in with us today and she's speaking on behalf of her organization Proskauer. She's a special regulatory counsel at the firm and she has in her capacity advised several international clients on the topic of CSRD and particularly again on today's agenda item on how to think about that when you're operating across different subsidiary branches, how do you take that into account. There's much more that she knows about and we have spoken on different occasions with her and our customers and prospects.
So she can advise and speak to all the other great stuff coming out of the EU, such as SFDR, the taxonomy, the EU MIFID. There is not a shortage of acronyms she can speak to.
So I'm very grateful to have her here with us today. What I'll do now is she has kindly prepared materials for us. Again, Very great thanks, given the very quick short turnaround, given that this all came out yesterday.
So Proskauer and Rachel specifically are really on top of it all. So what I will do is I will stop sharing. These pages and go to the other presentation so that you have in front of you exactly the presentation that you are familiar with. And with that, Rachel, I did probably even a poor job of fully introducing yourself. Is there anything further you would like to add before we go into the content of today?
Rachel Lowe | 06:18
No, that was super. Thank you very much, Anne-Marie. And yeah, great to be with everybody today and talk about timing.
So we've had to pivot the presentation. Hugely to cover the omnibus. I would put typical lawyer, but I will put a disclaimer that this is obviously just out and it is hot off the press. Initial thoughts. This is all going to develop probably at a pace.
So please take this as a sort of day one interpretation. But I thought I'd just cover overall what are the omnibus proposals on CSRD and how has this come about?
Well, we've known that there's been years of quite careful and considered drawn out negotiation on how Europe can meet its Green Deal commitment that's resulted in sustainable finance regulation and then the corporate sustainability reporting in CSRD and then with future CSDD and underpinning both the taxonomy regulations Really last year, there was this very quick gear change to think about competitiveness. And we've got the competitiveness compass as well now. And all of the drivers for the European Commission work programme this year have been about being simpler, faster, bolder.
So the CSRD proposals sit within this broader drive for this simpler, faster, bolder competitiveness. So what they have proposed is a very significant reduction of scope. We had around 50,000 companies that were in scope of CSRD. Under their proposals, it's estimated to be around 7,000 companies.
So we put up an alert yesterday and described it as CSRD has been slashed because it is just such a cut. Those that will still be in scope are those that have reported or are reporting already, so that 2024 intake, those large public interest entities, that remains. In terms of the other bucket, it's focused on a redefining of what is a large undertaking.
So before, in the current CSRD that we've got, it was that you had to meet two out of three of an employee threshold and or two financial thresholds. The financial thresholds have remained the same.
So 50 million euros of turnover, 25 million of balance sheet. But the difference here now is that you must have 1,000 employees or more.
So it was previously 250, and that was one of the three requirements you needed to meet. Now you have to meet the, or the proposal is you would have to meet 250. The employee threshold and then one or both of the financial thresholds so the first scoping point you would look at is that employee threshold you don't meet that you don't need to go to step two to look at the financial thresholds it is a change that it's this is a broad capture of large undertakings regardless of whether you're listed or unlisted. CSRD is currently drafted, had different phases and had this capture of listed SMEs that's done away with in the omnibus proposals. It's not just the EU large undertakings that are, and just to confirm this is thinking about the EU entities, but it's changed the scope with regards to that What was the final phase for 2028 reporting to report on then for your non-EU parents?
So that's where you've got an InScope European entity under CSRD. But up the chain, you've got a non-EU parent that derived 150 million EU-based turnover. They have significantly uplifted that to 450 million EU-derived turnover, which is much more aligned with what's under CSDD, the Corporate Sustainability Due Diligence Directive. The other uplift here is that if you didn't have an in-scope CSRD EU entity, but you had an EU branch with 40 million turnover. You would need to report they've uplifted that to 50 million turnover. The rationale behind that is to match it with the 50 million turnover that's required for large EU undertaking.
So it's the same for an EU branch or in large EU undertaking. So, yeah.
Yeah, a very significant change there. If we head to the next slide or unless Anne-Marie you've got any comments on that before we move on.
Anne-Marie Schoonbeek | 11:59
So basically, slashing, it seems like the right capture purely from a scope. It seems that they have looked both at those EU-headquartered, EU-incorporated organizations, but have looked at that second category of folks that not per se have their headquarters or parent group in the EU.
So really looking at both of those lenses, what I hear you say as well is it's now more streamlined and aligned with CSDD. So likely if you are as an organization in scope for that possibility, that is then likely going to be the case that you're in scope for CSRD. And it would be as folks got in the middle, because it sounds like under the old regime, you could be in scope for one, but not the other. And in this case, it sounds like if A, then definitely B. And your other, on that, if I'm dialing in today as an EU-based undertaking, so what you're saying here is look at the employee thresholds actually becoming much more, in a way, the deciding factor. Because if you don't hit that, you don't even have to look at bullet two and three is my understanding, right?
Yeah.
Rachel Lowe | 13:05
Exactly. Yeah. And we'll tweet the slide to make it very clear that employee threshold thousand is the absolute baseline.
Yeah.
Anne-Marie Schoonbeek | 13:14
Yeah. And that's that employee threshold. How does that include contractors? And is that? Or is that too detailed of a.
Rachel Lowe | 13:20
Question? So the way they've approached what is an employee is that you should look at the local member state and what they define employee should be the approach taken.
So don't. I think there would be a change in that.
Anne-Marie Schoonbeek | 13:38
Okay, interesting. So in general, for those operating quite human resource intensive organizations, they are more likely to remain in scope, whereas organizations that perhaps are more human light, but have bigger financial balance sheets or turnovers, they may now actually be out of scope.
So it seems like the human factor is the big driver in the new proposal. Yeah, very helpful to understand. Thank you.
So with that, I will indeed go to the next page. On the omnibus proposal.
Rachel Lowe | 14:10
Great, thank you. So, yeah, we were already in this phasing in CSRD and the current large undertakings in scope in the current version were due to report on their 2025 year in 26. However, the omnibus proposal set out a delay of two years. And the reason for that is that they would not want people to report on the current regime and then to have to pivot to this lighter touch regime.
So it's meaning delay. There's going to be a lag before we get this next tranche of CSLD reports published, if the proposals do indeed make it into law, which I'll come on to in a moment. But it's not just the scoping of which entities are in or out that has been changed, it's a proposal to change what you need to report on as well. We don't know exactly what this will look like, that will be up to FRAG to help develop that, but the ask from the Commission is to substantially reduce the number of data points.
So there's over 1,100 right now, but they particularly said, can you prioritize those that are quantitative, but those that are more around sort of processes or qualitative, you know, please consider a reduction of those. There are some where there's been identification that they are not particularly clear. They're ambiguous and somewhat vague those should be seen to be removed they want as well this consistency with other legislation whether it's eu but interoperability with international standards you know they describe this they want it to be very high interoperability with international standards and that ties in with what they're thinking about with some of the taxonomy developments as well where to determine whether something is taxonomy aligned you often need to grapple with a lot of EU legislation and regulation to prove that and they're proposing to come up with international standards for the taxonomy instead or quantitative and it seems that is the direction of travel for CSRD And they've requested clearer instructions on the materiality assessment process, which, Anne-Marie, I'm sure you've got some views on there of what assurance providers have been looking for and how that can be variable and inevitably different consultants, different businesses have all had slightly different approaches.
So perhaps there'll be a streamlining there.
Anne-Marie Schoonbeek | 17:15
No, that's a very good and a good segue, indeed, to what we see happen. What do we see happen in reality?
So I think in summarizing that first wave of the PIEs that we spoke about on page one in terms of those public interest entities, they have already, you know, they already have been going through the train has left, they have reported. So what I understand for them is that they have already been going through the train has left. For now, things won't change. What we have seen in the market and on our website, you can actually see a collation of that. We've been reviewing those first reports. What are those first wave of ESRS reports that have received audit sign-off? Because we know we can see that in the report. And what we indeed are seeing collectively, and our team is looking at it, but we're obviously not the only ones, is that there is that difference in interpretation. There's a difference in what is approved by auditors. And that's always, it makes sense in a way because we know that, CSRD is very much like in a way principle that the FROG next to the EU Commission is helping with implementation guidance to give more consistency but at the core there is a bit of that freedom and interpretation that has always been the design of the legislator to give that so it makes sense to me that you would see different interpretations but what I hear you say here is actually maybe the industry has felt that there was a bit too much leeway left open.
So we're looking for more clarity. Because anything when it comes to legislation, the more certainty, the better we know if we are doing things in a compliant way. And I think that's for business just good to know.
Like, are we doing, we want to do the good job, but tell us when are we doing our appropriate job? So if I hear, what I hear you saying is in terms of, we looked on the prior page, the scope has reduced in terms of who has to report. But then for those folks that were not in the PIE, so not in that first wave, where again, the train has left, we've seen the first report, that's all underway. For that second wave of folks that were the large undertaking, what is to be expected is what they will be reporting on may be different. Now, what I think is important, if I reflect as a practitioner, we have in our customer base both those folks that were in that first wave, so they've gone through the process, as well as folks that are in that second large undertaking wave that Many of our users have chosen to already do a dry run, meaning they have voluntarily already done an exercise because they before Omnibus was known, but in general, just helpful to know what would be shown, because we know that we have to report this publicly. And I think what will be my feedback there in terms of what I hear and the questions we get from our customers is, if you are still selling, doing business with any PIE, it is despite or regardless of the delay in the timeline, it does mean that you will not still get input questions from anyone in your value chain.
So I guess a bit of... Today's session is about, okay, so what's next?
So I think in terms of reality, it sounds like we get a bit of breathing space. We get another two years of those dry run and working for our own organization on the ESRS standards, if I'm not a large undertaking, but it doesn't mean that you will not still get questions or requests from your business partners because they still need to report. Is that.
Rachel Lowe | 20:31
My- - Yeah, I think that is absolutely. Around that uncertainty point. And it will be challenging for businesses to know exactly what to invest in here in terms of resource, time, appropriate governance whilst this is being developed. But you might still have demands from businesses that first wave category. If we head to the next slide, there's a point that is absolutely connected to this. It's the first one there. It's about this shield that they've envisaged. And that is their term, not just me calling it a shield.
So that's where they are aware and cognizant of the demands that are being placed on workers in the value chain for information. And so they've envisaged this value chain cap Basically, they will put within the CSRD legislation that if you are in scope of CSRD to report, you may only request from others, smaller companies in the value chain who are not in scope of CSRD. Information that is part of this voluntary reporting standard they're going to leverage the voluntary sme standards that freg has already prepared and use that as the base which if you review those i'm sure has been a busy googling and review of those standards in the last 24 hours. But if you look at those, they are much more streamlined.
So I think that would potentially be helpful to at least give some certainty If these proposals come through, yeah, here's your information as per the standards, but I'm not giving you any more. And the expectation from those needing to gather the information of what their expectation is of what they need to gather from those in the value chain who aren't themselves needing to report under CSRD.
So we'll see how that moves forwards. There are There was a... Fairly long list of sector specific standards that FRAG was going to need to develop and prepare, but they have been scrapped in the omnibus as well.
So they would not be come through. I think there's real mixed opinions. View on that from certain sectors. For example, in the financial services sector, it can be quite challenging to navigate CSRD. It's often envisaging products people manufacturing type world and that doesn't always work you know and translate into the financial services you know investments where you've not got that sort of direct chain But, you know, we'll see. One thing, though, that is to remain is the limited assurance. However, CSRD did have this vision that this could be uplifted to reasonable assurance over time. They've said that. Will no longer be the case and it can remain at limited assurance.
So that's another change compared to the current CSRD.
Anne-Marie Schoonbeek | 24:12
And that applies to all size categories, no matter if you're a listed SME, PIE. Okay.
So that's for everyone.
Rachel Lowe | 24:20
Yeah. Absolutely. If we head to the next slide, I think it's just worth recapping on what is the process here.
So the European Commission has published its omnibus on an urgent basis. It's managed to get a sort of derogation from its usual process where, for example, it needs to publish a detailed impact assessment from an economic, social and environmental perspective of what it's proposing. It said because this is so urgent, they don't need to do that. There is a staff working document though that covers some of those areas, but it's mostly on the economic and on the competitiveness side. But that does not mean that because they publish this will definitely come into force. The next step is that the European Parliament will need to approve this. It will need to appraise the proposals, debate it and consider any amendments. And the European Parliament process is that it will need a majority of MEPs to approve. And that is a majority of total MEPs I think should have researched this before the session but I think there's 720 around that I know exactly the audience can google please put it in the Q&A if that is right or wrong but it needs to be over half of 720.
Anne-Marie Schoonbeek | 25:50
About well now you have quite an audience so.
Rachel Lowe | 26:06
We do know that the MEPs, this is coinciding with MEPs having sort of the lowest attendance rate for voting at the moment. So they're going to need to get the various groups in the European Parliament, their MEPs to attend and to vote. I think the current makeup of the European Parliament is overall in favour of this streamlining competitiveness drive, but there are very significant blocks that have already immediately said they are against this and that they will oppose it throughout the process. It will be an interesting time to see how that works with the European Parliament vote. And we need the European Council to approve, as usual for European law.
So we'll have to have 15 of 27 member states approving this. There's obviously been some very significant and loud drivers, for example, Germany, to proceed with this agenda. But there may be some nations that I think this could be perhaps a step too far with regards to the European Green Deal, too far in favour of competitiveness, and we'll have to see how that plays out as well. It would then get published in the official journal of the European Union. But as this is a directive, it would need to be transposed into law in every member state for it to take effect. And I think that is where, even if we get all of those steps through, There is a big question mark for current CSRD. It is still not transposed in law in every member state, even though that was meant to happen in the middle of last year.
So it will continue. There's a lot of legislative sort of hurdles to get through. And I think it will be interesting to see as well, we've, One of the slides, if we get onto it, is that the national transposing law of CSRD is not identical in every member state. There have been some quirks in terms of, you know, perhaps which currency is applied for the financial thresholds, exactly which entities are in scope. There's been some gold plating with some extra entities in scope in a couple of jurisdictions. There's been a removal of certain entities perhaps based on their regulated status of which ones are in scope Could this be the way that actually it gets further fragmented? And there could be some gold plating to reflect some of the current CSRD as they transpose it through? Or will there be this uniform acceptance of the omnibus proposals? I'm not sure. We'll have to see. Will Germany, for example, still not got it in 2020? I suppose similarly with Spain, So will they even want to do this? Is this still, you know, not going far enough?
So big question mark there.
Anne-Marie Schoonbeek | 29:27
Yeah, maybe. And that's maybe two follow-up questions, just on a refresh on directives. What it actually means is it means that the national law still has to adopt it. It means they can, if they want, it's the minimum bar, so they could go higher. That's my understanding, correct, about the directives, what it actually means to go from EU to country.
Rachel Lowe | 29:48
Yeah, I mean, I think the general... View and intention of the European Union is to be as much of a single market and a homogenous block as possible. But yes, there can be quirks. And I think one of the very pointed questions in the press session yesterday when the omnibus was announced was this is going to be the end of the single market approach on corporate sustainability in the EU. There's going to be so many different member state interpretations, additional guidelines, but it is a Time will tell. But I would recommend that anyone with their global footprint, that if you have got operations and entities that may still be in scope across multiple member states to really keep a close eye and check with your local lawyers or with, you know, that handle multiple jurisdictions on any divergence, the timings of when it might be transposed as well.
Anne-Marie Schoonbeek | 30:54
Okay, so that's, yeah, that is indeed going into our agenda item of how do I keep track across my different jurisdictions. And I wanted to link back now that we're on this page. One question came up in the beginning of the call, but... Does it matter?
Like if I'm dialing in today from a country where The initial directive had already been adopted. Does that matter or is it the same if I would dial in today from a country where it hasn't been adopted though? This is now the new view for everyone or is there any difference depending on what the status was today?
Rachel Lowe | 31:26
Yeah, it's such a great question. Right now it is very early days, but the European Commission's vision here is regardless of whether the current CSRD was implemented or not, this should be very urgently transposed into national member state law following the appropriate approvals and then will override what is currently in place.
So It's, I think, a very... There's a need for a very close watch over what happens with the European Parliament and the European Council in the next month or so and then We'll have to see how the member states react.
Anne-Marie Schoonbeek | 32:21
Going into our next agenda item. Or related, but...
Rachel Lowe | 32:25
Yeah, so this was more what we were going to cover had the omnibus not come into play. But I just thought it might be worth recapping actually where the global standards got to.
So that was that final bucket of capture where you had 150 million or more EU-derived turnover And you had an EU entity already in scope of CSRD or a branch with 40 million euros or more turnover, which all of those thresholds are being uplifted. But where did those global standards get to?
Well, FRAG was developing those. It actually had them ready to go for consultation in January, but said we need to pause. This due to the omnibus And there'd been a real debate in EFRAG, and you can see it in some of the sessions if you watch them back or in some of the minutes of the sessions, where the starting point was the reporting should be same for that non-EU parent and reporting on their global group as the EU CSRD. But it actually resulted in their failure their final version that they were going to put for consultation to have an optional exclusion.
So yes, you would still need to start off with thinking about reporting on your sustainability related impacts across all of your groups, products or services across the value chain. But you could limit this if you wanted to just your connection with EU customers, your EU footprint. Which would be a really significant reduction in scope for many global international businesses. There was a debate back and forth whether that exclusion should be allowed for the climate change related reporting. Initially, they put out that yes, it should and this optional exclusion to limit the global groups reports on your EU footprint should include be inclusive of climate but actually the version that they landed on that would have gone to consultation said no so your climate reporting would still need to cover your global group jurisdiction agnostic but you could optionally exclude elsewhere depending on what is material to be on your european footprint there was some really strong criticism with certain personnel in the FRAG meeting saying that this is going to lead to two tiers of reporting. It's unfair to allow this more limited reporting for these groups and it's undermining this need for a level playing field but It remains to be seen. We have got so many steps to go through. We've got to go through what actually the EU entities need to report on these voluntary standards for that value chain cap, and then they will turn to the global reporting.
So this is interesting. This will be down the list. - Yeah, and this was, again, this is based on the current requirement, but now there is this red flag at the top due to the omnibus. DEI, where you have got a US headquartered business. And for those that may not know, that's Robbie Starbuck at the top, who's been leading the charge to try and force organizations to remove their DEI initiatives. And of course, President Trump, who has that as a direct quote from him about DEI programs, he is anti them. That can be really challenging if you were either already opting in to a globally report early or you were going to be in scope in a couple of years where if you have found that own workforce equal treatment and opportunities for all and some of those sub-sub-topics as listed the gender equality diversity and you know inclusion of persons with disabilities might have been deemed material how do you report on that? Where if you've got these US challenges, especially the litigious nature of jurisdiction with what you're putting into the public domain for your reports. And there are just some questions there of things that you might want to think about if you're navigating that, if you have already, you know, decided to globally report under CSRD to really think about what your legal reporting boundaries are and when, to think about actually what is material in those sub-sub-topics and make sure that double materiality assessment is really focused in these areas. There are transitional provisions available that delay the reporting on some of these areas Think about confidentiality restrictions as well. And Throughout CSRD, there's this principle of disaggregation, where actually if it supports the reader with understanding and making it sort of useful information to disaggregate, perhaps, you know, what is your European perspective?
So information on this versus your US and all the different sort of legal demands on that. So that was just an example of some of the challenges.
Anne-Marie Schoonbeek | 38:30
No, and I think it's very, it's a very, a good one to call out. Like, I think it's hard to, whether or not you're close to the topic, maybe today you're dialing in from a very different capacity, but opening up the newspaper, this is very much front and center.
So even with the knowledge of the last few weeks and now looking through, because the ESRS disclosures have been available for many months, but almost looking at it.
Internal and external communications, navigating different local jurisdictions is new to the sustainability or compliance field. We already knew that even within Europe, there historically have been differences about what can you, for instance, even ask your employees about their ethnicity or other dimensions.
So that is not a new challenge. We have been familiar with that in this space of sustainability reporting. And I think it just means that if I play back to some of what you brought forward here is that it's.
Within the communications department is so key there on top of course, your legal counsel, internal or external. It's just a lot of things to navigate. And I think what it means is just that, again, from our perspective, what we see is that being able to measure, monitor and digest things at the subsidiary level and then choosing at what point do you aggregate, what point do you not has become such a big part of the puzzle.
Sounds like it will only remain that. So very, yeah, very frank answer. And relevant topic to bring up. Seeing if there's anything on this topic, it seems like most of the questions so far are about threshold, timing.
Rachel Lowe | 40:54
Timing. I mean, I think it is challenging for those who are captured this were in the current format captured this year to work out exactly when you wait for this to come into law or not. I think we just you just need to give us a little bit of time. I think that will become more apparent as the sessions get scheduled for the European Parliament. And, you know, we can read the mood of whether this is likely to get passed. But just to reconfirm, looking at some of the questions before. If this comes through the omnibus, you will not need to report under its current requirements and then change that in two years. That is not the vision of the European Commission. It would be that you would report in two years time. For the first time.
Anne-Marie Schoonbeek | 42:01
Maybe that's a good segue. And I know we've touched on some of the content on these pages around some of the transposing logworks.
So perhaps is it a good moment where we transition to the final Q&A? I think you already kindly went there.
So what I'll do is let me just stop sharing this. I think lots is covered there. I think you mentioned you have, Proskauer has released an alert yesterday.
So there is a material around that to read. But because much was shared today. Let me then... If I look at the quick question, so what you're saying is if folks are dialing in today, what should we do, right?
Like I am in that large undertaking group. We have already set the wheels in motion. I have built out the governance, have got buy-in from my colleagues, right? What is the advice?
Like, I have an answer to that. I'm very curious for yourself.
Rachel Lowe | 42:52
Like, no, please, Anne-Marie, get stuff.
Anne-Marie Schoonbeek | 42:55
Prepared. No, because I think. First of all, let's all take a step back. I'm aware this is very much a legal topic. What is this helping us do? It's helping us unite as an organization around what are some of the dimensions that we should look at, that we should get clarity on how are we doing today? What are areas where we could improve? Where can we identify operational efficiencies? If you look at E1, the environmental impact. By doing that hard work, because maybe you hadn't in the past, you hadn't gone in-depth into all your different locations, your different assets, the specific machines and sites. By doing the hard work, because I know particularly year one is hard work, setting this all up, folks have identified operational efficiencies, have identified opportunities to actually turn this into a value creation opportunity. And I know that sounds, yeah, it doesn't feel always like that when you're in that hard work and in the trenches. But if you have received that momentum, if you have set up and have the buy-in from folks, let the wheels, let them keep running. Because in my mind, A, from a driver perspective, still helpful to know if in two years you have to really go and publicly disclose Probably helpful to identify any areas where maybe you do feel less comfortable that you have things in place. And second, it really gives you as an organization Yeah, a shared buy-in around a topic that Yes, it's a legal topic, but at the end, this is core part of doing business and we will be able to identify opportunities for value creation through it.
So that would be my stance on it.
Rachel Lowe | 44:28
Yeah, I mean, I think it will vary business to business and exactly where they are on that. Particularly the double materiality assessment, but I suppose what may come through in law from the omnibus if it gets passed would be the minimum, it's not the maximum.
So if you want to go beyond that because you think that is useful, remember the absolute driver behind these reports was to support people understanding the sustainability-related impacts your business is having on the environment and society, but to provide financial decision useful information as well. So if you think that end report that you can provide based on Current CSRD is still going to be useful from those two lenses. You can still proceed even if this gets stripped back by.
Anne-Marie Schoonbeek | 45:26
Law. Yeah, that's a good point of putting us back into the bigger picture. Let me go through. I think you and I both were going through to see if there's any other. I think, of course, always hard to dare we put ourselves on the timeline of when the final parliament and council will pass. Are we talking months, weeks? No idea, based on...
Rachel Lowe | 45:51
I mean, their indication is that this should be months. This should be a few... Couple of months is I think that ideal whether that is realistic just remains to be seen whilst we've got, you know, Various different views in the European Parliament. This is not a homogenous block of votes that will go through. There will be some very heated debates. On this.
Anne-Marie Schoonbeek | 46:23
So more stay tuned and watch this space. It sounds like this is just the beginning of it.
Rachel Lowe | 46:29
I think we're at time as.
Anne-Marie Schoonbeek | 46:31
Well. Yeah, so I think it's great to see so many Q&A.
So thank you all for coming with that. And I think we answered quite a few of them. Again, shout out to Rachel Lowe, first of all, for giving us your time and so timely and hot off the press insights. There is an alert from Proskauer went out as well.
So do have a read of that. We on KSG, we continuously have updates.
Thought leadership sessions like this we have a lot of materials on our website where we recap and we bring we love to bring the thought leadership together but we love to reflect our practical experience from serving many of your peers on the topic so for today i want to say a big thank you for all of us that dialed all of those and all of us but you and me for dialing in and bringing this webinar to life and yeah thank you and thanks so much And see you next time, Rachel.
Rachel Lowe | 47:19
See you soon. See you.

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