The new Corporate Sustainability Reporting Directive (CSRD) is a paradigm shift in how companies report and manage their environmental, social and governance impacts. For plastics manufacturers heavily dependent on fossil-based raw materials, this presents a number of challenges - but also opportunities to transform and future-proof their operations.
In this article, we explore the impact of the CSRD on the plastics industry, the requirements of the directive and how companies can adapt to the new reality.
The CSRD is an update and extension of the previous Non-Financial Reporting Directive (NFRD). The new Directive places higher demands on companies to report on their sustainability performance and integrate sustainability into their business strategy.
The CSRD will be phased in from 2024 and covers:
Plastic manufacturers, especially if they have a large share of fossil-based raw material, will have to report on climate emissions, resource efficiency and social impact.
Plastic manufacturers that have customers in any of the above criteria are also affected.
Scope 3 reporting is one of the biggest challenges for plastics manufacturers, as it requires mapping emissions throughout the value chain by working with suppliers and customers to account for impacts from raw material extraction, transportation and product use. At the same time, the transition to bio-based raw materials, recycling solutions and energy-efficient technologies involves significant investments, which can be particularly difficult for smaller players in competitive markets.
The detailed requirements of the CSRD also demand expertise in sustainability and reporting, which can lead to the need for external consultants or investment in training for companies that lack internal resources.