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CSRD and the fibre industry

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CSRD and the fibre industry

How will the Corporate Sustainability Reporting Directive affect the fiber industry?

A new directive is expected to significantly impact EU corporate sustainability practices and influence global reporting standards.

 

"CSRD" refers to the Corporate Sustainability Reporting Directive: a significant piece of legislation within the European Union. Its main goal is to enhance the scope and quality of sustainability information that companies are required to disclose. This is part of a broader effort to make the European economy more sustainable and to integrate sustainability into the corporate governance framework.

The CSRD is a key component of the EU's Green Deal and Sustainable Finance Disclosure Regulation (SFDR), aimed at mobilizing finance for sustainable growth and requiring financial market participants to disclose sustainability-related information. An especially big shift is the fact that Reports prepared under the CSRD will be subject to auditing. This is intended to enhance the reliability of disclosed sustainability information. Companies will be required to report in a digital format, making it easier to access and analyse the information. Another important development is the fact that the entire supply chain needs to be considered.

The CSRD introduces more detailed reporting requirements on environmental impacts, human rights, social standards, and sustainability-related risks. The directive aims to provide more detailed reporting standards, ensuring companies disclose relevant and comparable information regarding environmental and social impact. The directive seeks to integrate sustainability reporting closely with financial reporting, recognizing the interdependence of financial and non-financial performance. The reporting will align with the EU Taxonomy for sustainable activities, which classifies which economic activities can be considered environmentally sustainable. Compared to its predecessor, the Non-Financial Reporting Directive (NFRD), the CSRD extends sustainability reporting requirements to more companies.

For the FTTH industry, this will mean an increased focus on reporting environmental impacts and sustainability practices, throughout the entire supply chain. It may require companies to invest in more sustainable technologies and practices, align their operations with environmental goals, and potentially reshape their strategies to meet new standards. This could lead to a shift towards greener practices within the industry, impacting how companies operate and invest in new projects and technologies. Aligning business operations and strategies with environmental goals and the European Green Deal objectives is essential, along with adopting more sustainable methods in the deployment of FTTH networks and minimizing the environmental impact of operations.

“CSRD will be yet another catalyst for companies to understand their emissions value chain,” stated Kyle McKenna, senior market forecaster in Omdia’s forecasting and data analysis team. “Occupying a distinctive intersection between connectivity and infrastructure, the telecommunications sector should take advantage of fiber’s sustainability credentials to support the continued rollout of fiber networks. This not only aids telcos themselves in reducing emissions but also paves the way for business strategies that are well integrated with environmental and societal considerations. As Europe progresses towards achieving its ambitious connectivity targets, FTTH deployment holds immense potential for meeting the twin transition goals of digitalization and sustainability.”