Regulatory Chronicles. ⏳

15.11.23 | Jakob Tresch

Today, we’re diving deep into sustainability reporting, and guess what? It’s not just a buzzword; it’s a roadmap for the future. As a food manufacturer, you might wonder when and how you’ll need to spill the beans on your emissions and supply chain details. From the heart of Europe to the landscapes of Canada, each region has its own set of rules, and we’re here to unravel them. So, grab a coffee, and let’s embark on a journey through the world of reporting and discover what it means for you, and how you can champion sustainability!

We will cover what applies to the European, Swiss, British, American, and Canadian markets. Most regulations demand companies to answer questions on climate risks, climate KPIs or how is management involved. If you are able to answer questions it will be a breeze to write your report.

European Union.

Let’s kick off with Mother Europe. The well-known Corporate Sustainability Reporting Directive (CSRD) is about to become relevant in 2024. It will replace the already implemented EU NFRDs and further extend them. The European Union approaches sustainability by combining environmental, economic, and social sustainability aspects. The mandatory sustainability disclosures will begin in 2024 and will be expanded in three phases:

  • Phase 1:

    In 2024 the CSRD will apply to companies that are already reporting NFRDs. This includes around 12’000 companies listed in stock markets, banks, and insurance companies, who employ over 500 people. It will also apply to non-European companies with a turnover of over 150M EUR in 2023. The regulatory standards for phase 1 will be sector-agnostic.

  • Phase 2:

    In 2025 large companies and their subsidiaries currently not reporting NFRDs will have to report for the first time for fiscal year 2024. This includes around 50’000 companies that need to fulfill two of the following three criteria: a balance sheet of over 20M EUR total, a net revenue of over 40M EUR, or an average of more than 250 employees in the fiscal year 2024. For phase 2 you can expect to report sector-specific information according to yet-to-be-published standards.

  • Phase 3:

    The final stage includes all listed SMEs. They will be required to publish a simplified report in 2027 for fiscal year 2026. There exists a transitional opt-out until 2028 and the simplified report has yet to be defined.

The CSRD will need to be published in a section of the Management Report or in a Sustainability Report. CSRD also mentions the level of assurance. Until 2028 when the CSRD is fully implemented, companies only have to provide limited assurance. However, after six years this will shift to reasonable assurance. Limited assurance is to be provided by independent external auditors. The content of the report covers physical and transitional risks, evaluation of the supply chain resilience, scenario-based adaption plans, and a robust strategy to reduce absolute emissions in all scopes. Especially for greenhouse gas emissions you need to show a strategy to reach climate neutrality by 2050 and disclose emissions reduction targets between 2030 and 2050. Those targets include reductions in the value chain also known as scope 3. You can find more information on the corporate sustainability reporting of the EU here: Link.


In Switzerland, companies with over 500 employees or 20M CHF in assets or 40M CHF turnover need to report in 2024 for fiscal year 2023. Companies that fail to comply may be fined 10’000 CHF. What you need to report is very similar to the EU model and adapted from the CSRDs. 

United Kingdom.

The UK has already implemented climate disclosures for public companies, banks, insurance, and private companies with a turnover of 500M GBP and over 500 employees for the fiscal year 2022. Nevertheless, the Brits have a very ambitious plan, as the mandate is expected to come into effect across the economy in 2025. 

When addressing the report’s content, the United Kingdom provides a thorough clarification sheet alongside comprehensive guidelines that integrate climate-related financial disclosures into the existing strategic report, aligning with the TCFD guidelines. Companies submitting reports need to communicate how they identify, assess, manage, and integrate risks and opportunities into their overall risk management strategy. This disclosure should also specify how these factors relate to a company’s operations, including details on the timeframe and impact. Additionally, disclosed targets must be directly linked to identified risks and opportunities. Companies are expected to transparently communicate the key performance indicators (KPIs) and metrics used to measure progress against these targets, accompanied by clear explanations of metric calculations. 

Looking at metrics, the legislation mandates an emissions data gap analysis and outlines the company’s strategies to address these gaps. In instances of incomplete data, the use of modeling is permitted. Importantly, any disclosed data should be presented in terms of carbon dioxide equivalents and intensity. Furthermore, the report is obligated to incorporate a scenario-based resilience analysis. Notably, at this stage, Scope 1, 2, and 3 are considered optional, providing a favorable aspect for compliance. 

United States of America.

Similar to the CSRDs the American regulations will be rolled out in phases.

  • Phase 1:

    In 2024 companies with an aggregate worldwide public float of 700M USD or more will need to comply.

  • Phase 2:

    In 2025 companies with a public float of 75M USD or more but less than 250M USD in annual revenue or with a public float of more than 250M USD but less than 100M USD in annual revenue will be made compliant.

  • Phase 3:

    The third phase starts in 2026 for the fiscal year 2025. Companies with a public float of less than 250M USD with annual revenue below 100M USD will need to report.

The regulations follow TCFD and GHG protocol guidelines. It is quite strict on metrics. Companies must report on Scope 1, Scope 2, and Scope 3 if the company has Scope 3 targets or Scope 3 is material. You might ask what is material? Well, for food and beverage manufacturers scope 3 is material. Emissions need to be disclosed in absolute terms and in terms of intensity per unit of revenue in USD as well as per unit of product. You also need to cover data sources and provide a breakdown of greenhouse gases. Governance and risk management include specifications we have seen in other markets such as board and management expertise and responsibilities and risk assessments. Companies must also disclose targets and transition plans. 

To ensure compliance with environmental sustainability standards, particular attention must be given to the specifications outlined. Companies relying primarily on offsets for emissions reduction are categorized as high-risk. It is imperative to provide a detailed account of the use and quality of offsets, with any discrepancies being incorporated into the overall risk assessment. Transparent disclosure of renewable credits is essential. Furthermore, companies are required to furnish a comprehensive report on revenue generated from low-carbon products, emphasizing the inclusion of such products in their portfolios. Finally, you should also cover the potential of an internal carbon price.


Canada will introduce regulations for financial institutions, banks, and insurance companies in 2024. Those need to report on climate-related risks and emissions. The report also needs to assess the reporter’s clients and it is likely that the group of companies will be extended in the following years. 

Your Turn.

Navigating the world of emission reporting and sustainability might seem like a maze. The rules are set from the EU’s game-changing Corporate Sustainability Reporting Directive (CSRD) to Switzerland’s fines for non-compliance, the UK’s ambitious climate disclosures, the phased approach in the USA, and Canada’s upcoming regulations for financial players. Remember, transparency is your secret sauce. 

Answer those climate questions, align with TCFD and GHG protocol guidelines, and showcase your commitment. Whether you’re a big player or a local hero, your journey toward sustainability is not just about complying; it’s about making a positive impact.