The Corporate Sustainability Reporting Directive – or CSRD ruling – is a European Union law obliging companies to be transparent and accountable about their impact on nature.
They must explain how their environmental, social and governance (ESG) actions affect their business, including their supply chains. The new rules apply to the 2024 financial year and phased-in reporting started in January 2025.
Even though farmers are not directly subject to the reporting requirements, the way food companies source their products may well change as they seek out suppliers with sustainable practices within their supply chains. That means some farms may need to adopt more environmentally friendly methods, procedures and documentation as they continue to operate.
It is highly likely that farmers selling into supply chains of the major retailers and food processing companies will need to start providing CSRD supply chain monitoring data.
The array of different legislation being introduced to combat climate can be bewildering. Here are our six tips for navigating the CSRD process…
1. Understand the changes to the EU’s Corporate Sustainability Reporting Directive
Here’s what we know:
- The new rules aim to make sustainability data more reliable and comparable across the EU
- They apply to an estimated 50,000 organisations across the EU, including large and listed SMEs – and will indirectly impact many more
- Firms must disclose environmental, social, and governance (ESG) data that includes social impact, climate risks and governance practices
- Reports must be verified for their accuracy by independent auditors
- A company must publish its sustainability report in a digital format to improve transparency about how it manages climate change-related financial risks and opportunities
2. Be prepared if your farm supplies to European-owned businesses
Even though the UK is no longer in the EU, CSRD can still impact British farmers through:
- Supplying food and raw materials to EU-based companies, who may demand sustainability information from them
- Exporting agricultural produce to the EU
- UK supermarkets, retailers, food manufacturers or wholesalers supplied with British goods could have EU business dealings
No matter where a farm is situated, if you operate in a supply chain which has indirect EU business dealings, they could be impacted by the directive and be audited accordingly.
3. Assess your own sustainable agriculture and farming methods
These are just some of the ways that farmers can future proof their businesses and align with regulations such as the CSRD by monitoring, tracking and reporting their own environmental impact:
- Develop sustainable farming practices, such as reduced pesticide use
- Increase biodiversity efforts, reduce waste and track the results
- Measure your carbon footprint by collecting data on your farming practices (from fuel, crops, livestock, waste) and calculate the total greenhouse gas emissions produced. Start monitoring nature based carbon balances, such as trees, soil and peatlands where present
- Adapt to digital record-keeping through user-friendly farm management software
- Invest in appropriate nature-based solutions to create positive carbon credits and balances – these tools can offset production emissions and help farms work towards net zero goals – aligning with CSRD’s climate reporting requirements
4. Stay on top of changing sustainability measures
Strengthen your sustainability credentials by keeping up-to-date with ever-changing rules and regulations.
For example, the UK’s Task Force on Climate-Related Financial Disclosures (TCFD) and the upcoming Sustainability Disclosure Requirements (SDR) align with many of the CSRD’s principles.
The UK is developing its own sustainability reporting standards that are expected to align with the CSRD to some extent. Farmers who develop their own sustainability strategy will be helping to safeguard their future success.
5. Study other sustainable farming success stories
There are many great examples of UK farmers developing successful decarbonisation strategies on their land.
They include pioneering organic farmer Simon Hare, who uses regenerative farming methods to boost biodiversity and improve his land at Trees House Farm in County Durham.
The farm transitioned from dairy to an organic beef farm in 2010 and has introduced holistic planned grazing to ensure continued land regeneration to maximise grass growth. He hopes his farming techniques will build soil organic matter, reduce soil compaction and encourage wildlife.
Our experts at CSX have completed a full biodiversity and carbon assessment to build an understanding of how these practices have increased biodiversity and carbon stores on the farm.
6. Call on the experts if in doubt
It can be a testing time for farmers as they juggle their business responsibilities with the need to conform with sustainability rules and regulations.
At CSX, we assess a farm’s impact on nature and climate, helping the owners and other companies in the supply chain to understand their sustainability reporting requirements.
We use data sources to complete full biodiversity and carbon assessments through:
- RGB drone flight at high resolutions
- Digital twin creation for accurate habitat mapping and condition assessments
- Above-ground biomass estimation
- Hedgerow condition and tree planting evidence
- Drone-based LIDAR assessments across a representative sample of land
- Sward height and structure assessment
- Bird acoustic surveys for biodiversity monitoring
- Bird activity and change over time
- Measuring local CO2, concentration in real-time
- Pasture metabolic activity
Contact CSX to get started on your sustainability strategy
Speak to one of our sustainability experts to explore our tailored solutions to help your farm to confidently deal with CSRD and other reporting regulations, email us at contact@csxcarbon.com, call us on 01609 786655, or visit our contact page.