“Companies have a major role to play in the ecological transition and must have the most complete information possible to make the right choices”

HASith the progressive implementation, from January 2024, of the Corporate Sustainability Reporting Directive (CSRD), transposed into French law on Wednesday December 6, we are preparing to write a new page in our economic grammar.

The XX^e century was that of a powerful standardization of international accounting to support the rise of a globalized and financialized economy, particularly effective in developing, but blind as to the impact of its activities on humans and nature. At a time of environmental emergency, texts such as CSRD will allow our century to be that of the definition of “extra-financial” standards to better guide our economies on the rails of the essential transition.

Concretely, the directive will lead, from 2025, European companies with more than 250 employees to publish information on their environmental, social impacts and even their governance. In the same way as financial information, this data must be based on international standards, be controlled by an independent third party and published annually by companies.

On the eve of its implementation, the 1^er January 2024, this European text has been the subject of criticism by proponents of an Anglo-Saxon approach to extra-financial data. While the latter want these standards to be limited to measuring the ecological and social impacts of the outside world on the performance of the company (“simple” materiality or financial materiality), the European approach retains a logic of “double materiality” and aims to measure – also – the ecological and social impacts of the company on the outside world (“impact materiality”).

Measure the path ahead

This double materiality, that is to say this concern for the consequences of corporate activity on the wider world, constitutes in our eyes a considerable step forward. Of course, this approach represents a major technical challenge. The impact assessment methodology is not yet stabilized, and it would be utopian to ensure that dual materiality would allow exhaustive accounting of a company’s impacts.

It is, for example, still difficult to measure as precisely the impact of a company on biodiversity as on the climate. Of course also, this extra-financial reporting does not directly require companies to change their behavior since it is only a transparency tool.

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