The Corporate Sustainability Reporting Directive (CSRD)* presents companies with new requirements for transparency and comparability in their non-financial reporting. In particular, the ESRS E-1 standard, which addresses climate change, requires detailed information on greenhouse gas emissions (Scope 1, 2 and 3), energy consumption, reduction measures and the financial impact of climate-related risks and opportunities. However, fulfilling these reporting obligations on the impact of climate change - which is almost universally rated as a material sustainability issue in both current studies and Five Glaciers Consulting projects - offers companies far more than just regulatory compliance: it forms the basis for a comprehensive and sustainable climate strategy.

*You can find out why we continue to recommend that our customers actively prepare for the implementation of the CSRD in our blog post "...".

Why a climate strategy is essential

A climate strategy goes beyond simply collecting data. It serves to define corporate climate targets, implement measures and make progress measurable. The focus here is on the 1.5-degree target of the Paris Climate Agreement and on ensuring long-term resilience and competitiveness. This strategy is not only a risk mitigation tool, but also creates clear added value:

1.strategic orientation: This enables companies to approach climate protection measures in a structured and systematic way.

2.cost efficiency: A well-thought-out climate strategy helps to reduce both emissions and costs in the long term.

3.image enhancement: active climate management strengthens credibility with customers, investors and employees.

4.regulatory preparation: This helps to meet future legal requirements at an early stage.

5Continuous improvement: Progress monitoring allows measures to be regularly evaluated and optimized.

The synergy effect between CSRD and climate strategy

The interfaces between CSRD reporting and climate strategy are numerous and offer potential for synergy effects. The collection and analysis of sustainability data as part of CSRD - for example on Scope 3 emissions or climate-related risks - provide a valuable basis for the development of a climate strategy. At the same time, an existing climate strategy can significantly improve the quality and depth of CSRD reporting.

ESRS E-1: Requirements and opportunities

The ESRS E-1 requires companies to provide detailed disclosures on climate-related topics, including transition plans and climate strategies, targets and actions, climate mitigation including Scope 3 emissions, corporate GHG pricing and a description of the financial impact of climate change on the company. A full overview of the OFfenlegungspflichten can be found below:

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From reporting to transformation

A well-thought-out climate strategy can turn the wealth of data collected as part of CSRD into a real competitive advantage. It enables companies not only to report, but also to make concrete, measurable progress towards climate neutrality. Companies that take this step will benefit in several ways:

-Employee loyalty: Sustainable values strengthen our attractiveness as an employer.

-Market advantages: Customers and investors reward climate-conscious business models.

-Long-term resilience: the focus on climate protection ensures the future viability of the company.

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Transformation plans in accordance with BAFA Module 5: Resource-efficient climate strategy

An often sensible step on the way to a successful climate strategy is the use of funding opportunities, such as those offered by BAFA Module 5 'Transformation Plans'. This module supports companies in the development of so-called transformation concepts that define concrete steps for achieving climate targets and decarbonizing their business processes.

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The creation of a transformation plan in accordance with BAFA Module 5 offers extensive synergies with the CSRD. Data collected in the transformation plan - for example on Scope 1, Scope 2 and Scope 3 emissions - can be incorporated directly into sustainability reporting. Conversely, the CSRD provides the basis for targeted and well-founded action planning as part of the transformation. The special feature of BAFA Module 5: companies can be reimbursed up to 80% of the costs of preparing a transformation plan.

A structured transformation plan development not only saves time and resources, but also enables companies to achieve their climate targets efficiently and sustainably.

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Conclusion: An investment in the future

A comprehensive climate strategy is not an optional extra, but a key building block for long-term competitiveness. Companies that prepare for this at an early stage can not only meet regulatory requirements such as the CSRD, but also actively drive forward the transformation to a sustainable economy. It is worthwhile dovetailing your own climate strategy closely with the reporting obligations of the ESRS E-1 in order to exploit synergy effects and create real added value.

Lay the foundations now for a sustainable and use the synergies that arise from the combination of reporting obligations and transformation and design your climate-conscious corporate strategy with us. Together, we will ensure that your climate targets are not only ambitious, but also economically viable and resource-efficient. Contact us to find out more!