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The Corporate Sustainability Reporting Directive: A challenge or a chance for agri-food companies?

3 December 2024 14:19 RaboResearch

As of 2025, the CSRD will require large EU companies and listed SMEs to report on sustainability impacts, risks, and opportunities. Agri-food firms will be affected.

Intro

    Starting in 2025, the Corporate Sustainability Reporting Directive (CSRD) will require large companies and listed small and medium-sized enterprises (SMEs) operating in the European Union to report on sustainability impacts, risks, and opportunities related to their operations and their supply chains. Non-listed SMEs and most farmers and growers are not directly subject to the CSRD, but many will be indirectly affected by buyers or suppliers seeking sustainability data and improvements for their value chains. This is expected to stimulate the proliferation of holistic on-farm programs for sustainability, since farming is where most sustainability impacts and risks in the agri-food sector originate. While the letter of the CSRD calls for reporting only, its intent is to transform business behavior toward integrating sustainability into decision-making processes, beyond mere reporting. Despite initial compliance struggles and costs, companies may benefit from enhanced positioning, differentiation, and reputational gains. By raising awareness of sustainability within firms, their value chains, and to investors, the CSRD is expected to foster a virtuous cycle that will enhance supply cooperation and accelerate the sustainability transition of the European agri-food industry, though its full effects will take years to materialize.

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