The Power of Data in Sustainability Reporting

The Corporate Sustainability Reporting Directive (CSRD) represents a significant step toward enhancing sustainability reporting standards within the EU. This new mandatory directive seeks to strengthen and broaden existing regulatory requirements by introducing standardized disclosures of companies’ environmental, social, and governance (ESG) impact, encompassing their entire value chains. 

Starting from January 2024, companies will be obligated to report on their material impact and risks across the value chain in a standardized digital format as part of their annual reports. Implementing the CSRD is expected to provide investors and stakeholders with comparable, harmonized, and comprehensive datasets, enabling them to evaluate companies’ sustainability performance and assess climate risks more effectively. 

By establishing a common reporting standard, the CSRD aims to drive greater transparency, facilitate better risk assessment, and promote the transition toward a more sustainable and resilient economy. 

The CSRD introduces a few new fundamental principles to ESG reporting

From Upstream to Downstream: Tracing Environmental Impact Among the Value Chain

The company’s environmental footprint extends beyond its own operations, encompassing the entire value chain. In fact, a significant portion, up to 80%, of a company’s environmental impact can be attributed to its value chain, which is especially common to many food and beverage companies. Understanding this, it is essential to consider both upstream and downstream contributors to the environmental footprint. Recognizing the significance of value chains, the CSRD places great emphasis on measuring carbon emissions and capturing the complete environmental footprint, encompassing all environmental impacts. 

• Upstream in the value chain – environmental impact arises from suppliers, including the production of products, ingredients, and materials they provide. 
• Downstream in the value chain – the impact can be associated with consumers, such as the energy consumed when using the company’s products. 

To ensure that environmental footprint data is robust, transparent, and accurate as possible, the CSRD encourages the collection of primary environmental data rather than relying solely on average environmental impact estimates. And what is the most valuable source of that information? Suppliers!  

Food production is a complex, dynamic system but by prioritizing data collection and collaboration with suppliers, especially farmers in their crop production, F&B companies can gain a comprehensive understanding of their environmental impacts and work towards reducing their negative footprint. This commitment to transparency and data-driven decision-making is crucial in meeting the CSRD’s requirements and supporting more sustainable food production.  

Easier Reporting Process with Farm Management Solution

Farmers are central to the sustainability transition in the food production industry, but financial and other burdens stand in the way of the wide-scale adoption of many of the technologies needed to decarbonize the sector. Emissions tracing and other actions require new, innovative solutions to facilitate decarbonization.  

Thus, digitalization of agriculture supply chains is essential for companies to meet ESG goals, and to be able to track the data from their agriculture suppliers which is required for their CSRD reporting.  

AGRIVI farm management solutions help companies in providing transparent data on their environmental impact in the agri-food value chain. As a simple-to-use digital solution, AGRIVI enables companies to take meaningful actions such as: 

• collect the data from farmers in the agriculture supply chain 
• integrate with ESG reporting platforms to secure seamless reporting 
• support required optimizations and improvements: reducing GHG emissions, and the impact on soil, air, and water, improving biodiversity, reducing waste, and improving farmer livelihoods. 

AGRIVI supports companies to track and report on valuable data from their farmers, which are adequate to European Sustainability Reporting Standards (ESRS) guidelines, which define how companies should report on sustainability issues. 

The ESRS states that companies must identify and assess impacts, risks, and opportunities in problem-prone areas, based on the nature of the activities, geographies, or other risk factors. Companies must include material impacts and risks in their upstream and downstream value chain based on their materiality assessment and due diligence activities and in accordance with sector-specific requirements. 

By leveraging AGRIVI farm management software, companies can measure the current state and track the progress of improvement goals throughout 7 key ESRS areas and moreover support their farmers to implement more sustainable practices.  

By obtaining accurate and comprehensive data on their environmental impact, companies can identify areas for improvement, implement targeted strategies, and track their progress over time. With AGRIVI 360 Ag Supply Chain platform companies can have a comprehensive overview of their farm’s activities, which makes it easier to track sustainability initiatives and align operations with ESG goals. 

Without accurate data from their agriculture value chain, for many food and beverage companies, it will be difficult to make improvements toward more sustainable food production. 

With the clock ticking and the first batch of companies subject to CSRD obligated to start their reporting in 2024, it’s the right time to get started. Make your reporting process easier with AGRIVI!