All questions

Our Product

How we support you

About Carbmee & Decarbonization

Frequently asked questions and their answers about EIS carbon management solution of carbmee.

Our product can be used by customers interested in measuring and reporting their carbon emissions. However, it goes beyond that. It was designed for reduction – helping customers to make data-driven decisions based on factual information about their value chain emissions and achieve net-zero targets in a cost-efficient way.

Most of our competitors’ platforms use spend-based calculation alone, which isn’t precise enough to include primary, operations data or provide results that can help companies identify actionable hotspots. Our approach is to use both spend-based and activity-based calculations for the most thorough and precise results possible. 

We provide spend-based calculation to set a baseline for Scope 1 and 2 as well as to identify hotspots if needed. At the same time, we guide our users towards collecting and growing their emissions data within the organization and increasing activity-based data coverage. 

We provide activity-based calculation to tackle emissions that can be the most difficult to measure throughout the value chain, i.e. Scope 3. While many competitors avoid using activity-based calculations due to their complexity, carbmee has streamlined the process, to deliver on results that are 30% more accurate and actionable insights for carbon reduction strategies. 

What makes carbmee different from its competitors?

We have developed our own categorization for how we break down all of your company’s emissions, which are:

      Company Carbon Footprint...

calculates CO2e emissions across your entire company, i.e. all suppliers, internal processes and products;

covers all phases of the company, i.e. Scope 1, 2, and 3;

fulfills regulatory and sustainability reporting requirements;

enables identification of strategic reduction opportunities.

Product Carbon Footprint...


enables carbon reduction along the product development process;

commonly required to win tenders, report on progress, and comply with regulations.

Supplier Carbon Footprint...


calculates climate impact across all suppliers;

covers all phases of the supply chain, i.e. Scope;

identifies cross-supplier/category reduction opportunities;

enables collaboration with suppliers for joint carbon reduction.

What kind of carbon footprints do you calculate?

Yes, our solution is system-agnostic and can integrate with any ERP system.

Can we integrate our ERP system data directly into carbmee’s EIS™ platform?

Yes, our solution provides precise information for compliance with major sustainability reporting standards like GRI, CDP, and GHG Protocol.

Can I use international reporting frameworks?

While Excel is the classic solution for formatting, organizing and calculating data, it is also entirely manual – not at all optimized for the complexity of corporate carbon management. 

Carbmee’s EIS™ Carbon Management Solution automates carbon management, not only making carbon management easier but also delivering on: 

calculations 80-90% faster than with Excel;

the opportunity to collaborate on data collection – streamlining data from multiple sources (e.g. suppliers, various internal teams, etc.);

a variety of features built for reduction like analytics for easy hotspot identification, an initiative planner for planning reduction path and high ROI initiatives, as well as automated reporting.

Why is carbmee better than my company’s internal excel solutions?

We use a variety of databases, including comprehensive activity-based databases such as ecoinvent, as well as industry specific ones such as carbon minds and Exiobase for clients in need of spend-based carbon calculations.

Which database do you use for emission calculations?

Yes, all of our 3rd party database partners provide transparent and auditable data on request.

We have different packages that can be set-up based on customer’s needs and value chain complexity. Talk to one of our decarbonization experts to get a quote for your company.

FAQ about our product and solution

All answers about carbeem's carbon managemnt software and how we help organisations decarbonize.

Carbmee sits at the nexus of technology, digitization, and sustainability, with the vision of driving the sustainable transformation of businesses with environmental intelligence in order to achieve net-zero by 2050. Carbmee’s Environmental Intelligence System ™ (EIS) is an enterprise software solution for value chain carbon management, specializing in Scope 3 emissions analysis and reduction potential.

Carbmee’s EIS™ Carbon Management Solution is not just a reporting tool or an offsetting platform – our Solution is about integrating operational ERP data to identify where to abate emissions at their source and managing carbon reduction initiatives as effectively as possible. By linking emissions from materials, transactions, logistics, and supplier data to globally recognized standards and methodologies, our Solution calculates carbon footprints down to a supplier-specific level. 

What is carbmee’s EIS™ Carbon Management solution?

We’re trying to make the biggest impact we can and that means working with some of the world’s largest companies, which also have complex supply chains (i.e. companies with significant Scope 3 emissions). We also work directly with suppliers to analyze and verify their carbon footprint.

What kind of companies does carbmee work with?

The climate crisis is intensifying and with it so is the need for companies to comply with regulations, but also to develop more resilient supply chains, lower their climate risk, and continually make their operations more sustainable overall. Our Solution gives companies the chance to not only fulfill their emissions reductions pledges, but to truly operate carbon-aware now and far into the future.

Why should my company decarbonize its value chain?

Scope 1 emissions are direct emissions from owned or controlled sources.
Scope 2 emissions are indirect emissions from the generation of purchased energy. 
Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

About carbmee & decarbonization

A list of all frequently asked questions about carbmee's carbon management solution with the answers.

All questions about carbmee's carbon management solution

Details about how carbmee can help you in your decarbonization journey and how our EIS carbon management software can help reduce your carbon footprint.

Our team is composed of industry experts specialized in procurement, business consulting, technology, and more. This means we have the domain knowledge to understand our customers’ challenges and needs – and the know-how to solve them.

To ensure our customers are able to have the greatest impact on their net-zero journey, we also provide:

one-on-one guidance and recommendations on how customers can start and level-up their decarbonization;

online courses that explain what net-zero is and how to use our product from end-to-end of your enterprise;

webinars and events with industry experts, focused on net-zero for both the planet and your company’s sustainable business performance.

How does carbmee support teams from end-to-end of your enterprise?

Yes, our Consultancy Partners are key in supporting our joint customers to eliminate implementation barriers, maximize low-carbon capacity, and achieve breakthroughs in sustainable business performance. 

We are a consultancy firm interested in EIS™ Carbon Management for our clients’ projects. Can we partner with carbmee?

Yes, carbmee provides both personal support from our Customer Success Managers but also through our interactive learning platform, carbmee Academy. Customer Success Managers ensure that every customer is guided through:

their decarbonization journey, i.e align use of Carbmee with business goals and strategy;

how to leverage EIS Carbon Management to achieve meaningful carbon reduction goals;

mapping challenges to match for solutions, i.e. product discovery and co-development.

Is there support available when using EIS™ Carbon Management?

How carbmee can support you in meeting Net-Zero goals

The EU has taken a groundbreaking step to address the limitations of the Non-Financial Reporting Directive (NFRD), which failed to inspire sustainable business practices. The new CSRD mandates reporting for a broader spectrum of companies, recognizing the crucial role of small and medium-sized enterprises in the EU economy.

This policy demands companies disclose both climate change risks and their impact on climate and society, including scope 3 emissions. This transformation is pushing companies to rethink their objectives, operations, and entire value chains.

With the CSRD, standardized digital reporting aims to enhance comparability and transparency, by following the GHG Protocol and other international standards. By requiring a unified digital format, it streamlines reporting processes, improves comprehension, and allows meaningful comparisons between companies. The CSRD paves the way for stakeholders to better assess and benchmark corporate sustainability performance.

The Corporate Sustainability Reporting Directive (CSRD) marks a pivotal moment for SMEs in their sustainability journey. To ensure successful compliance, it is important to understand the criteria for SMEs to comply with the CSRD. As outlined by the European Commission, from 2026, the CSRD will apply to SMEs that are listed on regulated European markets and meet at least two of the following criteria:

Balance sheet total of EUR 4 million or above

Average of 50 or more employees during the financial year

If you are unsure whether your company falls into each category, please refer to the table below for clarification:

With this in mind, follow the checklist to effectively navigate CSRD compliance:

Kickstart your CSRD compliance journey by assessing your organization's environmental, social, and governance (ESG) performance. Identify risks and strengths across your operations, supply chain, and customers, while considering the crucial inclusion of Scope 3 emissions.

Carbmee’s  Environmental Intelligence System™ streamlines data collection and collaboration across multiple departments and stakeholders. As a result, your company is equipped with a solid foundation to create a winning sustainability strategy.

Once you've pinpointed risks in your value chain, develop a focused sustainability plan that tackles your company's negative impacts while supporting your business goals. Set clear objectives for reducing environmental impact, boosting social responsibility, and enhancing corporate governance. Ensure your plan has realistic targets and a roadmap to achieve them, including meeting CSRD reporting requirements.

With carbmee’s Environmental Intelligence System™, clients gain personalized insights to identify value chain hotspots and benchmark initiatives that drive carbon reduction, addressing both costs and emissions.

3. Set Up a Strong Data Collection Process

For successful CSRD reporting, it's essential to have a systematic data collection process across your organization. Streamline this process by using digital platforms that integrate internal systems and ensure accurate ESG metrics.

The EIS™ seamlessly connects with your ERP system, automatically calculates your company's carbon emissions, and simplifies CSRD reporting. Plus, it helps track initiative results, forecast emissions, and compare year-over-year performance.

4. Collaborate with Suppliers and other Stakeholders

Join forces with suppliers, customers, and stakeholders to achieve outstanding ESG performance through CSRD's market-wide sustainable business transformation. Inspire alignment with your sustainability goals while fostering transparency and collaboration for maximum results.

Our Environmental Intelligence System™ streamlines supplier data, shares product carbon footprints, and helps you create, implement, and track impactful reduction initiatives.

Sustainability is not a one-time project, but a new way of doing business. tay ahead of the game by frequently refining your strategy and mastering the latest CSRD regulations. Track progress, seize new opportunities, and measure success. 

Utilize comprehensive platforms like EIS™ to minimize operational costs, streamline data exchange among departments, and focus on crucial aspects for a sustainable and impactful business.

Navigating CSRD Compliance for SMEs: The Step-by-Step

Complying with the Corporate Sustainability Reporting Directive (CSRD) presents many challenges for SMEs, who may lack the resources or even the ESG expertise to measure, manage and disclose their performance. However, the CSRD can be a golden opportunity to set your company up for success. By embracing the new regulations, SMEs can unlock new business opportunities, solidify their position as a sustainability leader, and thrive in a competitive market landscape.

Achieving CSRD compliance empowers SMEs to foster confidence among stakeholders with enhanced transparency. By actively revealing their environmental footprint, SMEs showcase a dedication to openness and responsibility. This cultivates trust from clients, investors, and collaborators, positioning your brand as one that genuinely embraces sustainability and practices what it preaches.

The CSRD provides a unique platform for SMEs to showcase their sustainability initiatives and enhance their brand reputation. By complying with CSRD reporting requirements, you position your company as a forward-thinking, environmentally conscious entity. This resonates with environmentally conscious consumers who actively seek out companies that prioritize sustainability. By differentiating your brand, you can attract loyal customers who value the positive impact you have on the planet.

The CSRD is a gateway to a world of sustainable investment opportunities for SMEs. Investors are increasingly prioritizing environmental, social and governance (ESG) issues in their decision-making. By adhering to the CSRD standards, you send a powerful message that your company is dedicated to long-lasting sustainability objectives. This commitment paves the way for funding, collaborations, and growth opportunities that harmonize with your vision and principles.

Boost efficiency, reduce costs, and gain competitive advantage

Complying with CSRD regulations goes beyond ticking boxes – it's about optimizing your operations for success. Tracking and reporting your environmental impact provides valuable insights into how you use resources. This allows you to pinpoint areas that need improvement, streamline processes, and enhance operational efficiency. As a result, you can save costs and stay ahead of your competitors. Showcasing your sustainable practices gives you a competitive advantage in an eco-conscious market that continues to grow.

Embrace the CSRD and unlock your potential

Meeting the CSRD standards isn't just about legal compliance; it's a transformative journey that can lead your small or medium-sized enterprise (SME) to sustainable success. By seizing the opportunities offered by the CSRD, you can enhance your brand image, attract investors, cut costs, and gain a competitive edge. Embrace the CSRD, show your dedication to sustainability, and position your SME as a frontrunner in the pursuit of a greener future. The time is now - unlock your potential and enjoy the benefits of CSRD compliance.

The Environmental Intelligence System developed by carbmee automates data collection from various systems within your company and stakeholders, providing accurate calculations of your carbon emissions. As CSRD now includes Scope 3 emissions, it's crucial for SMEs to measure and disclose not just their direct emissions, but also those from their entire value chain. Don't get caught up in time-consuming spreadsheets and unreliable email exchanges like many companies.

With the EIS™, you can measure Scopes 1, 2, and 3 emissions in just two weeks. Gain insights into emission hotspots across your value chain and uncover hidden reduction opportunities. Facilitate seamless collaboration between departments, suppliers, and customers for efficient data collection and initiative planning, execution, and tracking. The EIS™ empowers your company to develop robust climate strategies that align with CSRD reporting requirements.

The Corporate Sustainability Reporting Directive (CSRD) is an exciting new regulation impacting around 50,000 EU companies, including small and medium-sized enterprises (SMEs). It requires comprehensive sustainability data disclosure, including Scope 3 emissions.

The CSRD promotes a holistic approach to sustainability reporting, tackling climate risks and impacts head-on while encouraging standardized digital reporting for better comparability and crystal-clear transparency.

SMEs should comply with the CSRD by assessing their ESG performance, crafting a well-rounded sustainability strategy, implementing robust data collection processes, teaming up with suppliers and stakeholders, and regularly reviewing and refining their sustainability game plan.

Embracing the CSRD can unlock numerous benefits for SMEs, such as increased transparency that fosters trust, a glowing brand reputation, alluring sustainable investment, streamlined operational efficiency, cost savings, and a competitive edge in the market.

An automated solution is a must for companies to comply with CSRD without the burden of operational costs and compliance risks. The EIS™ is a holistic solution that simplifies data collection, boosts collaboration, and automates carbon emissions calculations. It empowers SMEs to confidently comply with the CSRD and accelerate their net-zero journey.

The CSRD, approved by the European Commission, is a hot topic for businesses. It affects 50,000 EU companies and requires extensive disclosure of sustainability data. SMEs face unique challenges in adapting to new factors such as Scope 3 emissions. Learn how to turn compliance into an opportunity with technology and carbmee's Environmental Intelligence System™ (EIS™).

CSRD: The new must for SMEs

Discover how the Corporate Sustainability Reporting Directive (CSRD) is transforming the landscape for small and medium-sized enterprises (SMEs). Learn how SMEs can turn CSRD compliance into a business opportunity, navigate the new regulations, and leverage technology for streamlined reporting. Unlock the potential of sustainable growth, enhance brand reputation, attract investments, and gain a competitive advantage in the market. Explore the benefits of CSRD compliance and discover the power of the Environmental Intelligence System (EIS) in achieving sustainable success.

Estimates can vary depending on what’s included, but approximately 51% of global emissions come from the industrial sector. This figure is one that motivates our team of industry, software, and carbon experts everyday to understand the challenges of the world's largest enterprises with some of the most complex supply chains.

While corporate understanding of emissions is still relatively new, both accounting and sustainability professionals have been familiar with LCA and Carbon Accounting for many years. These approaches are both relevant to corporate sustainability but were initially designed for different use cases. Life cycle assessment (LCA) is used to assess the environmental impacts of product systems and decisions, often driven by customer requests or regulatory requirements. Meanwhile, Carbon Accounting measures how much carbon dioxide (and CO2 equivalents) an organization emits and often fulfills requirements for non-financial reporting. This form of accounting was mostly developed in the last two decades with the intent of providing a factual basis for carbon-conscious decision-making. However, it's true efficacy until recently is unclear, given that companies had often based their carbon accounting on speculative upstream and downstream emissions (Scope 3). This means that with inaccurate information – but good optics – carbon accounting has been strongly driven by publicly listed companies for reporting purposes and not for decision-making.

LCA was developed for a highly granular assessment of environmental impacts – which makes for reliable carbon footprint models. These assessments require complex data collection processes, involving a high level of manual entry as well as low level of technical innovation. Traditionally, these models were created externally through specialized consultancies or internally by LCA experts with a background in environmental engineering. Carbon Accounting has a fairly simple data collection process that can consist of information such as energy bills, vehicle mileage, or company facility needs, for example. But as this information doesn’t provide the full scope of a company’s activities or supplied goods, it is not useful when it comes to reduction planning and decision-making (beyond participating in the voluntary carbon market to buy carbon credits which is not ‘ultima’ ratio for energy-intensive industries). This is especially the case for industrial companies that rely on processes like assembly, smelting or those with extensive supply chains. Beyond that, frameworks for carbon accounting are very broad when it comes to database and methodology choices, which has often been exploited by companies that have only felt compelled to do the bare minimum in regards to time and resource allocation. 

If we stand a chance of decoupling economic growth from emissions we need precise data and reliable processes. While addressing Scope 1 and Scope 2 emissions has been the low-hanging fruit for many companies, Scope 3 still needs to be urgently addressed and is now re-emerging as an urgent topic. Fortunately, the U.S. Securities and Exchange Commission, European Commission, and other governing bodies understand the importance of a net-zero future and are now mandating companies to disclose the carbon footprints of their entire value chains, from end-to-end. When it comes to transforming into a net-zero enterprise, companies are finding it challenging to navigate which approaches are best for them to comply with established and new regulations – and understandably find it challenging to understand the current market stance. If that wasn’t complicated enough, there’s also the question of determining whether a Product Carbon Footprint is enough for their reporting and compliance needs, or if what they need is to have a holistic measurement of their entire Corporate Carbon Footprint, but that’s another topic for another day…

Most enterprises face similar obstacles when it comes to their net-zero transformation:

Lack of focus, with little to no clarity on emissions hotspots

Scattered data located across several different ERP and production systems

Managing massive amounts of data, especially in Scope 3 (this includes purchasing transactions, BOMs and supplier data)

Dynamic decision-making supported by forecasting and reduction tracking

Understanding the financial link between carbon optimization and ROI

Execution of SBTI Targets and Net-Zero Strategy

Knowing the ins and outs of this breakdown is crucial to understanding which methodology is right for a company’s decarbonization strategy and it’s also how carbmee supports the world's largest companies to reduce their carbon emissions with one LCA-based, end-to-end carbon management solution, that puts companies in control of their net-zero transformation. 

I’d like to dig a bit deeper into differences within LCA and Carbon Accounting:

Understanding the best carbon reduction approach for industrial enterprises

The spend-based methodology utilizes environmentally extended input-output (EEIO) databases to calculate emission factors for different materials from different regions. These factors are based on spend and have the unit kg COv2e/€. 

The activity-based methodology uses an LCA approach, where emission factors rely on LCI databases and are calculated with the method recommended in the GHG protocol to arrive at global warming potentials for different materials and services. For the activity based approach, ecoinvent models are used as they are, without further changing them. They are chosen based on their best fit to the used materials or services.

The supplier-specific approach works the same way as the activity-based one, but here generic data from the database is replaced by or enriched with primary data from the customer or supplier. This allows to not only calculate emissions more accurately, but also to recommend to-dos to achieve emission reductions. 

Spend-Based Vs. Activity-Based Calculations

A manufacturing OEM is doing a spend-based analysis of their Scope 3 Emissions, based on spend data. They purchased 500 tonnes of Aluminium for their production process on the 2nd of September 2022, from both a Chinese and a European supplier. Each time, they paid a price of 2,300 €/tonne, which amounts to 1,150,000 €.

The resulting footprint is 3,307,895 kg CO2e for the European supplier and 4,431,767 kg CO2e for the Chinese supplier, due to different energy mixes in the regions.



The same company bought the same amount of Aluminium from their European supplier on the 4th of March 2022, and paid a price of 3,516 €/tonne, which amounts to 1,758,000 €.

The resulting footprint is 5,056,764 kg CO2e.


The drawbacks of the spend-based approach are:

a. that these calculations can't be broken down into material, transport, production steps, energy consumption - so ultimately, it's not designed to identify reduction paths or go deep along the entire value-chain;
b. and the inaccuracy that can come from material price fluctuations & negotiation processes, so spend can change dramatically, even though consumption is steady.

A manufacturing OEM is doing an activity-based calculation of their Scope 3 Emissions, based on purchasing transactions (volume + material) and transport method. 500 t of Aluminium are purchased from Europe and China.  

The European material is transported by truck for 500 km, the material from China by ship (22,000 km) and then by truck (300 km). 

The OEM receives a footprint represented by the following graphic, with transport emissions are depicted in orange, and material in turquoise.

Advantages to spend-based calculations include that they:
1. can be broken down into material, transport, production, energy down to tier-n;
2. can differentiate suppliers in different countries, including transport;
3. can be flexibly designed to deep dive with supplier data once a hotspot is identified;
4. and are very accurate and designed to plan reduction initiatives with it.

The emission factor is derived from the ecoinvent database and includes generic assumptions about the production steps and energy sources that are used for the aluminum production, based on local grid mixes. This does not allow for recommending reduction steps to specific suppliers, because their respective production methods are not taken into account.

By getting primary data from the supplier of the material, it becomes possible to identify hotspots in the production and recommend meaningful reduction measures. For the example of aluminum, it can look like this:


It becomes clear that a significant share of the emissions from aluminum are caused by electricity consumption during fabrication – that is creating the raw material aluminum oxide – and direct emissions during physical processing. This gives the supplier three levers to reduce emissions that were previously unknown, such as: switching to renewables, changing the sourcing of the raw material, or capturing emissions where they occur.

Carbmee offers an automation layer on top of companies ERP and Manufacturing systems to streamline data and mapping them automatically with LCI emission factors to build highly complex activity-based LCA models at scale. 

This automation layer is purpose-built for companies with complex supply chains and high technical complexity with thousands of suppliers and materials as well as millions of transactions.

Example for Supplier-Specific Calculations

Carbmee offers an automation layer on top of companies' ERP and manufacturing systems to streamline data and mapping them with LCI emission factors to build highly complex activity-based LCA models at scale. 

For companies serious about not only measuring their emissions according to the science-based standards, but reducing them too, you should consider using a platform that uses activity-based calculation. Carbmee's EIS™ Carbon Management solution uses a category-defining data model that allows companies to significantly increase the granularity in hotspot identification, which ultimately enables carbon reduction at scale. 

To experience precise and powerful carbon management, book a demo to test out our solution for yourself.

Decarbonization presents complex challenges for industry companies and the market of solutions, both for software and hardware, is still quite young and sometimes not clearly defined. Read to learn more about the different approaches companies can take to measure and reduce their emissions, and what the best carbon reduction approach is for industrial enterprises.

The Best Carbon Reduction Approach for Industrial Enterprises

Decarbonization presents complex challenges for industry companies and the market of solutions, both for software and hardware, is still quite young and sometimes not clearly defined.

The CSRD marks a watershed moment for corporate sustainability with far-reaching implications for how companies assess their own climate impact, as well as for the future of sustainability reporting in both Europe and globally. Organizations will need to devote significant time and resources to prepare for implementation of the directive within a short timeframe.

We’ve created a quick guide to help industry enterprises understand the most important points of the CSRD and how they can best prepare for it.

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) is an amendment and extension of the current Non Financial Reporting Directive (NFRD), under which large companies, banks and insurance companies with more than 500 employees are required to disclose information on their environmental and social impacts. The European Commission adopted a proposal for a CSRD in April 2021, with the aim of improving the quality of sustainability reporting and increasing transparency on the non-financial performance of companies for external stakeholders.

As the climate crisis has progressed, the EU is increasing its efforts to drive forward its transition to a sustainable economy. The CSRD strengthens the existing rules on non-financial reporting introduced in the Accounting Directive by the 2014 non-financial reporting directive (NFRD). The new regulations under the CSRD will bring important changes regarding scope and reporting requirements.

The scope of companies affected by the regulations will significantly be extended to apply to: 

All large companies, that is companies fulfilling 2 out of the three following criteria:
- Revenues surpassing EUR 40 million per year
- Total assets over EUR 20 million
- More than 250 employees

All companies listed on EU-regulated markets (except listed micro-enterprises)

This nearly quadruples the number of companies required to publish reports on the environmental and social impacts of their operations from 11,700 to about 50,000. 

What are the main differences between the CSRD and the existing NFRD? 

The CSRD will include more comprehensive sustainability reporting requirements and significantly expand the number of EU and non-EU companies subject to the EU sustainability reporting framework. Enterprises will provide detailed environmental and climate change information, but will now also be held accountable for reporting on a wider range of topics such as environmental rights, social rights, human rights, and governance factors.

The CSRD is mandatory for companies that meet in-scope criteria, which include: 

EU companies with over 250 employees and a net turnover of EUR 40 million

Non-EU companies with at least one subsidiary in the EU and a net turnover of more than EUR 150 million

Reporting requirements for the CSRD will be fully phased in before the end of the decade as follows:

reporting in 2025 on the financial year 2024 for companies already subject to the NFRD

reporting in 2026 on the financial year 2025 for large companies that are not currently subject to the NFRD

reporting in 2027 on the financial year 2026 for listed SMEs (except micro undertakings)

reporting in 2029 on the financial year 2028 for third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds.

To comply with the CSRD, companies will need to prepare a non-financial statement that includes information on their sustainability policies, risks, and results. This statement must be auditable by an independent third-party and be included in the company’s annual financial report.The specific content of the statement will vary depending on the size and sector of the company but could include policies and performance details, such as: 

a brief description of the company’s business model, strategy and sustainability risks and opportunities; 

implementation plans as they relate to the transition to a sustainable economy, measures taken to achieve climate neutrality by 2050 ( in line with the Paris Agreement), and exposure to coal, oil and gas-related activities;

double materiality, i.e. both the sustainability matters that affect the company and the impact of the company on the environment, market, and people; 

greenhouse gas emission reduction targets; 

policies in relation to sustainability (including incentive schemes); 

and the processes the undertaking used for due diligence in relation to sustainability issues, as well as the current and future negative effects of the business' operations and value chain.

What information will need to be disclosed?

Companies will need to compile their ESG disclosure information in accordance with the CSRD with guidance from the European Reporting Sustainability Reporting Standards (ESRS). During the drafting process, the ESRS referenced various ESG reporting frameworks and standards, including CDP, GRI, SASB, and others.

The ESRS will incorporate both universal and industry-specific standards, like many other comparable frameworks. The first set of ESRS reporting standards is expected to be adopted by June 30, 2023, and publication of ESRS sector-specific standards is anticipated by June 30, 2024.

Which reporting standard applies to the CSRD?

While the full extent of sanctions is not known, as penalties are defined at a member state’s discretion, organizations found to be in violation of the CSRD can expect serious administrative sanctions, with possible penalties including significant fines.

In the case of NFRD implementation by member states, fines in Portugal ranged from €50 to €1,500, while in Germany companies are fined up to either €10M, 5% of the annual turnover, or twice the amount of the profits gained/losses avoided because of the breach.

Other consequences of CSRD non-compliance could also include damage to brand reputation, a loss of investor and stakeholder confidence, as well as legal action taken by non-governmental organizations.

Will there be penalties or sanctions for not complying with CSRD?

While some details are in development, it is clear that implementing CSRD it will require significant resources, and most crucial for multi-national enterprises, will overlap in scope and diverge in content from region to region. Regardless of size, companies should prepare for CSRD by:

ensuring that key stakeholders across your company are familiar with CSRD sustainability disclosure requirements; 

staying up-to-date on EFRAG announcements and ESRS guidance for CSRD;

assessing how your company identifies and gathers sustainability-related information;

setting targets and KPIs with planned periods to evaluate progress and relevance;

utilizing the right tools to help you quantify and report your relevant sustainability information.

How can your company start preparing for CSRD?

Carbmee’s EIS Carbon Management solution can help you to plan for success and prepare for the CSRD. Our platform provides you with everything you need to understand your baseline, set targets for emission reduction, develop transparent benchmarks, and report your progress through:

centralized and automated data collection from your existing ERP system;

industry-specific databases of emission factors that guarantees the highest accuracy;

hotspot-assisted target setting, benchmarking and gap analysis so you have the best data to create compliant reports;

real-time and impact-oriented insights to help you deliver on targets in good time.

To learn more about EIS Carbon Management and what carbmee can do for your company, get in touch with one of our industry experts. 

How carbmee can help your enterprise to report in good time and in compliance?

What is the Corporate Sustainability Reporting Directive? What will it mean for your industry? How can your enterprise prepare for compliant reporting? Check out our quick guide to find out.

Corporate Sustainability Reporting Directive (CSRD):Quick Guide

Corporate Sustainability Reporting Directive (CSRD): A Quick Guide

Investors and private equity firms must prioritize ESG integration to ensure long-term value creation and risk mitigation. New research from Bain & Co. and EcoVadis has established that companies with sound ESG management across their supply chains tend to have better margins. Moreover, strong ESG performance is indicative of a robust business model, making it crucial for investors and private equity firms to incorporate ESG considerations into their decision-making processes.

The Importance of ESG Integration in Investment and Private Equity Firms

ESG Integration in Investment and Private Equity Firms

Climate risks can significantly impact businesses' financial performance, making it essential for investors and private equity firms to identify these risks within their portfolios. Leveraging advanced technologies like artificial intelligence (AI), big data analytics, and machine learning can help analyze vast amounts of data quickly and accurately, enabling investors to pinpoint potential climate-related vulnerabilities.

Moreover, technology plays a vital role in facilitating comprehensive ESG analysis by automating data collection, monitoring progress against targets, benchmarking performance against industry peers, and providing actionable insights for informed decision-making.

Identifying Climate Risks Within Your Portfolio and the Role of Technology in ESG Analysis

Sustainability due diligence is a critical component of the investment process as it helps assess potential environmental, social, and governance risks associated with target investments. By conducting thorough sustainability due diligence, investors and private equity firms can identify potential ESG-related liabilities, understand the target company's current ESG performance, and evaluate opportunities for improvement.

This process enables investors to make informed decisions on whether to proceed with an investment or require specific ESG improvements before closing a deal. It also helps in developing a comprehensive ESG integration strategy that ensures long-term value creation and risk mitigation.

Conducting Sustainability Due Diligence for Better Risk Assessment

Mitigating climate-related risks provides numerous opportunities for value creation, both in terms of financial returns and positive societal impact. By addressing climate risks proactively, companies can reduce costs associated with regulatory compliance, avoid potential reputational damage, enhance operational efficiency, and capitalize on emerging market trends driven by sustainability-conscious consumers.

Investors and private equity firms can support their portfolio companies in identifying and implementing initiatives that mitigate climate risks while simultaneously driving value creation. This may include investing in energy-efficient technologies, adopting circular economy principles, or engaging in strategic partnerships to drive sustainable innovation.

Opportunities for Value Creation by Mitigating Climate-Related Risks

As highlighted earlier, strong ESG management is directly linked to business value creation. Companies with robust ESG practices tend to have better margins and are more likely to outperform their peers in the long run. Investors and private equity firms must therefore prioritize ESG integration within their portfolios to unlock long-term value and minimize potential risks.

By actively engaging with portfolio companies on their ESG journeys, investors can help drive continuous improvement, foster innovation, and ensure that businesses remain resilient and competitive amidst evolving market dynamics.

Unlocking Value Through ESG Integration: A Guide for Investors and Private Equity Firms

Role of technology in ESG analysis, identifying climate risks within portfolios, conducting sustainability due diligence, and opportunities for value creation by mitigating climate-related risks.

Overview

MODULES

INDUSTRY EXAMPLES

Have any questions?

Still have a question?