The Growing Importance of CSRD Compliance

“No matter what you've been hearing or reading, ESG is not going away anytime soon. ESG regulation was on an accelerated path the last couple of years, and that regulation is largely here to stay, both in the United States and abroad,” shares Ramya Ravishankar, HowGood’s General Counsel.

While there will be shifts in priorities across different regions, the broader trend remains strong. Companies must adapt to a growing landscape of regulatory expectations while also responding to continued stakeholder pressure from investors and consumers who expect sustainability transparency.

CSRD Compliance and Challenges for the Food Industry

“The CSRD is a vast sweeping regulation coming out of the EU directing corporate sustainability reporting. It impacts large companies and listed SMEs operating in the EU, and about 50,000 entities have been identified as affected by this regulation,” Ramya states.

The directive sets reporting mandates that must be transposed into national law by EU member states, creating a dynamic regulatory landscape where some nations have introduced even more stringent requirements beyond the baseline CSRD standards. This means companies must stay informed about evolving compliance expectations in every jurisdiction where they operate.

The CSRD framework is built on the European Sustainability Reporting Standards (ESRS), covering areas such as climate change, pollution, biodiversity, social responsibility, and governance. While efforts are underway to consolidate and simplify certain reporting categories, climate change remains the top priority for regulators and stakeholders. Companies must prepare detailed disclosures, including climate mitigation strategies, carbon reduction targets, and renewable energy usage, as well as numerical data on Scopes 1, 2, and 3 emissions.

Engaging suppliers will be crucial for Scope 3 reporting, as companies will need reliable data on their upstream partners' emissions and environmental impact. Additionally, internal carbon pricing mechanisms, financial implications of sustainability efforts, and risk mitigation plans will need to be documented under CSRD guidelines.

Beyond climate-related disclosures, companies must also adhere to the CSRD’s double materiality requirement, which consists of:

Impact materiality: How a company’s operations affect the environment and society.

Financial materiality: How sustainability factors influence the company’s financial performance.

This dual approach ensures that ESG reporting captures both the internal and external implications of corporate activities. Companies must establish robust governance structures, integrate sustainability into corporate strategy, and invest in reliable data verification and auditing mechanisms to meet compliance requirements.

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HowGood’s CSRD Solution: Data-Driven, Scalable, and Actionable

HowGood offers a robust CSRD reporting solution designed to provide highly granular and accurate sustainability data tailored to food and agriculture businesses.

“Granular emissions factors allow companies to be much more precise in sustainability reporting, moving beyond broad estimates to track actual product-level impact,” shares João.

As a research company and sustainability intelligence provider with 18 years of experience, HowGood delivers a comprehensive climate data suite that supports companies in their compliance journey.

Key benefits of HowGood’s CSRD solution include:

• Accurate Emissions Factors: HowGood provides precise, granular emissions factors, reducing reliance on generalized proxies. This allows companies to accurately assess their footprint and develop well-informed decarbonization strategies.
• Scope 1, 2, and 3 Measurement: The Latis platform automates emissions calculations across all scopes, aligning with voluntary standards such as for the Science Based Targets initiative FLAG (Forest, Land, and Agriculture).
• Scenario Modeling & Climate Transition Planning: Companies can simulate the impact of sourcing changes, product reformulations, and operational shifts to optimize their climate strategies.
• Supplier Engagement & Network Building: HowGood’s SupplierConnect platform enables suppliers to share footprint data seamlessly with customers, ensuring consistency and reducing reporting burdens.
• Integration with Leading Sustainability Platforms: HowGood collaborates with software providers like Watershed, Salesforce, Workiva, IBM, and Microsoft to integrate climate data into broader ESG reporting frameworks.

By leveraging HowGood’s automated data analysis tools, companies can reduce the administrative burden of sustainability reporting and focus on achieving ambitious impact goals. The platform enables businesses not only to meet compliance requirements but also to build a competitive advantage by offering product-level sustainability insights to customers and partners.

Practical Steps for Food and Beverage Companies

For companies looking to strengthen their sustainability data practices and ensure CSRD compliance, these actionable steps can help:

1. Establish clear data collection processes. Standardize how data is collected across departments and supply chain partners.
2. Invest in automation. Leverage technology to reduce manual reporting efforts and ensure accuracy.
3. Engage suppliers proactively. Provide clear guidance and value to suppliers, making it easier for them to share accurate data.
4. Use data strategically. Move beyond compliance and use sustainability data to identify cost-saving opportunities and operational efficiencies.
5. Align with CSRD and emerging regulations. Ensure reporting aligns with double materiality principles, EPR requirements, and other upcoming regulations.
6. Develop a governance framework. Ensure that ESG is embedded within corporate strategy, involving legal teams, finance professionals, and data analysts alongside sustainability experts.
7. Conduct a double materiality assessment. Identify gaps in sustainability practices and align improvement plans with ESRS requirements.
8. Plan for limited assurance audits. Prepare for third-party verification of ESG data, as required by CSRD, ensuring transparency and credibility.

Next Steps

Sustainability expectations continue to evolve, and businesses that prioritize data-driven decision-making will be better positioned for long-term success.

“CSRD compliance isn’t just about meeting regulations; companies that treat it as a strategic opportunity can use sustainability data to gain a competitive advantage and drive financial benefits,” shares João. Investing in the right tools and fostering strong collaboration with suppliers can help organizations transform sustainability reporting from a challenge into an opportunity.

If you’d like to explore how SupplierConnect and HowGood’s CSRD solution can help streamline your sustainability data efforts and support compliance, reach out to our team for a demo.