by Meera Robins | Apr 17, 2025 | Blog
A new goal for football
Nothing unites a crowd quite like football. While clubs are beginning to engage their key stakeholders in sustainability efforts, FIFA’s recent sponsorship deal with Saudi oil giant Aramco (aka the world’s ’largest corporate greenhouse gas emitter’) for the 2026 Men’s World Cup and the 2027 Women’s World Cup highlights the need for stronger global sustainability action in the sport.
As with any industry, football has its own unique set of sustainability impacts and opportunities. From an environment standpoint, stadium construction and clubs’ resource consumption impact biodiversity and ecosystems, while the sport itself is a significant contributor to global greenhouse gases. Estimates put football’s global carbon footprint at 64-66 million tonnes of CO2 emissions (tCO2e), roughly equivalent to Austria’s annual greenhouse gas emissions. Yet the sport also has the potential to promote some of the key social aspects of sustainability, such as advancing community outreach through educational initiatives and advocating for gender equality.
Why should clubs care?
There are plenty of reasons why football clubs should be prioritising sustainability, not least to mitigate the risk to players and stadiums.
Football is best played in the open air. But as climate change intensifies, so do the operational and health risks of playing outdoors. Without significant action, 25% of English Football League (EFL) stadiums will be at risk of annual flooding by 2050. Rising temperatures increase the likelihood of players and officials experiencing heat stroke and severe dehydration. This was evident during the June 2024 Copa America. Uruguayan footballer Ronald Araujo had to be substituted off due to dehydration as outdoor temperatures exceeded 29ºC in Miami, while an assistant referee was admitted to hospital due to heat stress after collapsing during a match in Kansas City.
It’s also good for business.
Investing in sustainability is a strategic move for football clubs. Investors are increasingly demanding visible progress on sustainability and sponsorship deals now consider sustainability as a key decision-making factor. According to a survey by the European Sponsorship Association, over 60% of sponsors said that having a sustainability policy in place was ‘very’ or ‘quite’ important when forming partnerships. By adopting sustainability initiatives, football clubs can future proof their operations, reducing long-term financial risks from climate change impacts while unlocking opportunities for innovation.
Fans care about sustainability. Fans are the heartbeat of football – providing players with motivation and clubs with the revenue to operate. With 66% of UK football fans believing the sport needs to do more to improve sustainability practices and 65% feeling that clubs could do more to encourage sustainable behaviour, it’s clear expectations are high.
Fans have real power to influence a club’s sustainability efforts. In 2023, Bayern Munich dropped Qatar Airways as its shirt sponsor following fan protests over human rights concerns related to the Qatari government, the airline’s owner. In 2021, Huddersfield Town FC’s Supporters Association launched the Sustainable Stadium Campaign to raise awareness of climate issues and push for operational changes at the John Smith Stadium. The campaign’s goals included phasing out single-use plastics, improving recycling capacity, and introducing energy efficiency measures.
Prioritising sustainability helps football clubs prepare for evolving regulations.
In the UK, larger clubs may soon be subject to the UK Sustainability Disclosures Standards. The English Premier League already mandates that all clubs develop an environmental sustainability policy by the end of the 2024 / 2025 season and track greenhouse gas emissions by the end of the following season. Other leagues may decide to follow suit.
In the EU, the Corporate Sustainability Reporting Directive (CSRD) originally required around 150 football clubs listed on European stock markets to disclose sustainability data. The Omnibus Simplification Package proposed in February 2025 would reduce the scope of the regulation, meaning smaller clubs may now be exempt but larger clubs, such as Paris Saint-Germain (PSG), will likely remain in scope. This means they will have to conduct a double materiality assessment (DMA) and report on identified environmental, social, and governance (ESG) topics using the European Sustainability Reporting Standards (ESRS). Regardless of regulatory changes, football clubs should publicly disclose their sustainability efforts to ensure stakeholder transparency and, where relevant, explore alternatives to mandatory reporting, such as the Voluntary SME (VSME) standard. Originally designed for non-listed micro-, small-, and medium-sized businesses, the EU is now promoting the VSME as a way for companies no longer in scope of CSRD to report.
What can clubs do?
There’s no doubt that football clubs across all leagues will be impacted by the climate crisis, the continued focus on inclusion, evolving regulations, and changing market trends. Here are some key actions clubs can take to enhance their sustainability efforts and get ahead of the game:
1. Reduce environmental impact
Football is an emissions-intensive sport, with its main sources of emissions coming from international travel, stadium construction, and sponsorships with high-emitting companies.
Clubs can begin by investing in renewable energy and sustainable merchandising, implementing resource recycling systems within their operations and introducing alternatives to single-use plastics and vegan/vegetarian options on match days. These are just a few of the environmental initiatives championed by Forest Green Rovers, the “greenest football club in the world”, since it began its sustainability journey in 2010. A standout feature of the club’s sustainability efforts is the 100% organic pitch that captures rainwater and recycles it for irrigation. The club even recycles wastewater from fan toilets back onto the pitch! With growing global concern over climate change, football clubs have an opportunity to lead by example, using their influence to create more sustainable practices both on and off the pitch.
2. Assess sponsorship agreements
Sponsorships are a crucial source of revenue for football clubs. But they often come with a hidden cost to the environment. One report revealed sponsorship deals with high-emitting industries, such as oil and gas, aviation and fast food, account for 75% of the sport’s carbon footprint. Until this report’s publication in early 2025, sponsorship had not been widely recognised as a major source of emissions in football. Clubs should carefully assess their sponsors to ensure they align with sustainable and ethical values, rather than contributing to social and environmental harm, and transparently communicate their sponsor activities to stakeholders.
3. Continue to strengthen social sustainability
The social impact football clubs have on the communities around them is arguably their most valuable contribution to society. For years, clubs have engaged in vital community work that not only nurtures the next generation of players, but also promotes health and wellbeing, fosters social cohesion, and supports local economies. Additionally, clubs serve as powerful platforms for addressing issues beyond the sport, such as mental health and domestic violence. Football clubs should continue this impactful work and further strengthen their role in promoting the social aspect of sustainability.
4. Enhance sustainability education
Although community outreach has long been a priority for clubs, its potential role in their sustainability strategies has often been overlooked. Expanding community programmes to include sustainability education is one way to achieve a holistic sustainability approach. For example, Chelsea FC’s Foundation has delivered 90 sustainability sessions to over 3,800 students, raising awareness of critical environmental issues.
5. Close the gender gap
The number of girls and women playing football in England has increased by 56% since 2020, yet significant barriers remain — especially for women working off the pitch.
Discrimination and the gender pay gap are just two of the many challenges women in the industry face. A 2024 survey found 89% of women working in football experienced discrimination — up 7% from 2023. Meanwhile, the English Football Association (FA) reported its 2023 gender pay gap increased in favour of male employees. This reveals a need for ongoing action to continue to address gender inequalities in the sport — it’s not a time to scale back.
Football clubs can no longer afford to sideline sustainability. While larger clubs may have greater financial resources and stakeholder support, it’s time for clubs across all leagues and countries to take action. To begin, clubs should develop a robust sustainability strategy, collaborate with industry sustainability groups such as Football for Future and communicate progress transparently to avoid greenwashing. Sustainability is not just an ethical responsibility — it is essential for the future of football.
Context is on hand to help with your strategy, reporting and communications needs, with over 25 years of experience working with businesses to accelerate their sustainability practices. If you would like to learn more about what we can do for you, please contact Helen Fisher: helen.fisher@contexteurope.com.
by Beth Sandford-Bondy | Mar 7, 2025 | Blog
We need more women in parliament, and it’s not currently happening. In fact, 2024 saw the smallest rise in the number of women politicians for 20 years. Achieving equal political representation is not only imperative for gender equity — it’s key to tackling the escalating climate and environmental crisis.
The number of women in parliament doubled worldwide between 1995–2020, but last year’s progress slowed to a snail’s pace — just 0.03%. Of 46 new parliaments elected in 2024, 27 now have fewer women, including those in India, Portugal, South Africa, and the US. At this rate we won’t achieve equal parliamentary representation for generations, which is time we can’t afford to lose.
Why does this matter to the planet?
Women policymakers often adopt more ambitious climate change policies. One study found that increasing women’s representation by 1% in European national parliaments can decrease CO2 emissions by 0.06%, due to higher rates of adoption of cleaner technologies and renewable energy. Another found that raising female representation in Bahrain from 2% to 37% could lead to a six-fold increase in the country’s climate ambition.
Beyond climate change, women leaders are more likely to prioritise environmental initiatives. For example, research in India found there were 62% more drinking water projects in areas with women-led councils than those with men-led councils.
Why is this? Women are disproportionately affected by climate change. When natural disasters occur, women and children are 14 times more likely to die than men, and gender-based violence often increases. Women are also more concerned about the environment, with over 10% more women than men willing to make major lifestyle changes to reduce the effects of climate change.
What’s more: Women’s political empowerment boosts economic growth, reduces corruption and strengthens international aid. Increasing women’s representation by 10% is associated with a 30% rise in aid committed (as a proportion of GDP per capita).
What can we do about it?
Women face several systemic barriers to entering politics and being elected. They experience higher levels of poverty and have more limited access to finance, as well as facing discrimination and exclusionary institutional practices. They also bear more responsibilities of care, to name just a few. But there are various ways governments and wider civil society can help:
1. Enhance education and awareness
Equipping girls and women with the knowledge and skills needed to enter politics is the first step to amplifying the number of women willing and able to participate. Read more about how girls’ education is one of the most powerful ways to tackle the climate crisis.
2. Prevent violence
Women often face violence and discrimination when they do participate in politics. One study found more than 80% of women parliamentarians experienced on-the-job psychological violence, 25% had experienced physical violence, and 20% had experienced sexual violence. Governments can crack down by passing laws to prevent violence against people throughout their careers in politics and to protect people voting in elections. These laws should include holding offenders accountable, ensuring justice for victims, and guaranteeing safe and secure polling stations.
3. Promote fair media coverage
Women politicians gain less media coverage than men, with more attention paid to their appearance and personal lives. Sexually explicit AI-generated deepfake videos are increasingly being used to target and discredit women politicians. Governments can pass laws to ensure balanced media coverage, ban hate speech and discrimination, and tackle the spread of deepfakes and misinformation.
4. Use quotas
Studies show that countries with mandated parliamentary quotas achieve more equal parliaments. On average, women hold 26% of parliamentary seats in countries with legislated quotas, compared to 21% in countries without a target. In 2024, women’s parliamentary representation declined in 12 out of 16 countries without quotas.
5. Encourage economic empowerment
Female political candidates receive 38% less campaign funding than male candidates, according to a recent study. Governments can help bridge the gap by regulating campaign financing to encourage parties to allocate funds to women candidates.
Improving parliamentary representation of women and other underrepresented groups is vital to pass and enforce the policies needed to tackle the climate crisis. We can take individual action by pushing for policies that empower women, supporting women politicians and their parties, and driving broader education and capacity building.
by Sarah Walkley | Feb 27, 2025 | Blog
If it takes a village to raise a child, then it takes a cross-functional team of enthusiastic experts to create a comprehensive sustainability report. But for many outside the core reporting team, the process can seem dry and a distraction (or unwanted diversion) from the day job.
As reporting requirements continue to evolve globally, it has never been more important to engage a wider group of colleagues. Sustainability professionals are under pressure. Around 70% suggest that the growing reporting burden is taking them away from delivering on-the-ground action and making progress towards company targets — a trend that will only intensify as the scope of mandatory requirements broadens.
Many sustainability specialists also suggest they are not best placed to lead on reporting. They are change agents, not risk managers.
Knowing the difference between standards
If this sounds familiar, how do you escape being stuck in ‘reporting mode’ for eternity?
Part of the answer lies in knowing the regulations — understanding the common denominators between requirements and the subtle differences. The Corporate Sustainability Reporting Directive (CSRD) and the IFRS Sustainability Standards claim to be interoperable. But the former mandates a double materiality assessment — the latter a single materiality approach assessing an issue’s impact on company financial performance. A CSRD-aligned double materiality assessment is likely to meet IFRS requirements, but not the other way around.
It’s essential to think about different reporting requirements. One framework might require you to report on renewable energy as a share of total usage and another on the source of your renewable energy. Understanding these differences makes it possible to collect the data once to comply with both rules.
Even with the best planning, knowing exactly the information you need, you have to source it from somewhere. And that means engaging the wider business — no mean feat when many teams regard sustainability data collection as dull and a distraction. So how do you break the log-jam?
Getting engaged
Resistance is normal and often stems from a lack of knowledge. Why should employees get involved? What’s in it for them? How will it help them day to day to do their job better? Here, communication, training and support are essential. And explaining issues in terms that resonate for them rather than talking explicitly about ‘sustainability’ helps.
Employees want to help build a more sustainable business — you need to explain how reporting fits into that. It’s about giving them an understanding of the regulations and the growing trend towards mandatory reporting. They need a sense of what data is required now, as well as visibility into you will be looking for in future as rules tighten, so they can have an input into the best way to collect the data.
If you work for a privately-owned company, it’s worth highlighting the temporary crunch point that comes from having to face mandatory reporting for the first time. This forces your business to play catch-up with listed companies which have been reporting for many years.
Making sustainability relevant
But, above all, you need to sell the benefits to them and how it will help them to do their job better. That means tailoring the benefits to each role.
Sustainability helps to build resilience, improve efficiency and reduce costs — music to the finance team’s ears. It also drives revenue and attracts talent — great for HR. But only if customers and potential employees are aware of your efforts and convinced of your progress. Without data, the company’s sustainability story can quickly descend into greenwashing.
Procurement teams face increasing requests from customers, suppliers and business partners for sustainability data. Their support in collating data makes that process easier. They also gain the skills and knowledge they need to support suppliers to comply with your data requests, strengthening those business partnerships.
Celebrating progress
You can’t manage what you can’t measure. Your sustainability data is part of that picture, allowing you to track progress and prioritise action. It’s important to show employees how it will help them focus on what matters and do their job better — not just how it benefits the business. It could be used to direct their efforts to decommissioning old equipment and saving energy, rather than spend time on a business case for new equipment when there’s limited budget to invest. This would spare them the frustration of having their proposal knocked back after hours of work.
Most importantly, reporting is about celebrating success. It demonstrates company — and team — progress. Supporting with data collection is their chance to showcase the good things that are going on within their team and function to the rest of the business and the wider world.
Employee engagement is tough and takes time. But, faced with The added understanding of your sustainability strategy which comes with engagement also helps drive action, shift your business towards being more sustainable, and realise your targets.
Context supports companies to tell their sustainability story — working in partnership to help identify and demonstrate progress from across the business. If you would like to talk about your organisation’s needs, please get in touch via www.contextsustainability.com or helen.fisher@contexteurope.com.
by Sarah Walkley | Jan 23, 2025 | Blog
2024 has been marked by growing regulation — increasing sustainability reporting requirements and legislating issues from nature to supply chain due diligence. And with most businesses experimenting with artificial intelligence (AI), regulators also attempted to rules in place.
While the focus for years has been on climate and the environment, social issues gained greater attention. Two-thirds of companies expect to spend more on addressing social sustainability over the next few years.
As we embark on a new year, Context reflects on the events of the previous 12 months and what they mean for business. We also consider what lies ahead and how best to prepare.
01. Growing commitment to protect and promote nature
New frameworks and benchmarks increase the structure on assessing nature impacts, but concrete actions are still lagging.
Over 500 companies have pledged to use the Task Force for Nature-related Financial Disclosures (TNFD) framework for reporting — with more set to follow suit. A year-long pilot by the Science Based Targets Network (SBTN) to develop validated targets for nature ends in January 2025. Approved targets will be listed on a new tracker, helping the next wave of companies to set goals. The TNFD is expected to release updated guidance on nature transition planning following its consultation.
Despite the pledges, there’s still some way to go. Of the companies reviewed in Nature 100’s first benchmark, two-thirds have a nature commitment — for 45%, this covers the full value chain. But only 13 organisations have kicked off a comprehensive materiality assessment.
Governments too are dragging their heels, with 85% failing to deliver their first national biodiversity strategy and action plan (NBSAP) before COP-16 in October. One bright spot — the US published its first National Ocean Biodiversity Strategy recognising the need for greater marine protection, as Norway approved deep sea mining in its waters.
In 2024, European regulators reinforced the need for greater action, approving the EU Nature Restoration Law. Member States must create National Restoration Plans aiming to restore at least 20% of degraded areas by 2030. The EU later delayed the Deforestation Regulation by 12 months as smaller suppliers struggled to implement the necessary due diligence.
Top tips to prepare for the year ahead
- Conduct a materiality assessment. Understand your nature-related impacts, risks and opportunities, so you address them.
- Develop a holistic, integrated strategy. Taking a comprehensive approach to nature strategy embeds it into the wider sustainability strategy and business model.
- Set targets to restore and prevent biodiversity loss. Aligning with SBTN guidance will ensure targets are relevant, measurable and support international ambitions to reverse biodiversity loss by 2030.
02. Circularity comes of age?
The 2024 Circularity Gap Report officially declared the circular economy a megatrend.
Articles and discussions on the circular economy have increased threefold over five years. In parallel, companies, including IKEA, Cisco and Dell, have integrated circular principles into their sustainability strategy — prompted in part by new ISO standards on material reuse.
More than one-third of Fortune 100 companies are expected to announce circularity goals within the next 12 months. Pressure is mounting on more companies to follow suit — especially the 40,000 private companies and smaller businesses coming within scope of the Corporate Sustainability Reporting Directive from 2026. They need to assess the importance of resource use and circular economy for their business as part of a full double materiality assessment.
With its Ecodesign for Sustainable Products Regulation (in force since July), the EU is encouraging companies to incorporate circular considerations from the outset. And companies have growing options for materials reuse at their disposal. In 2024, researchers identified new ways to make biodegradable plastics from textile waste, to recycle cement and to reuse carbon fibre panels from cars and trains. But use of secondary material dropped by 20%.
National governments are also aiming to stimulate circular thinking across the economy. To date, more than 75 countries have a national circular economy action plan in place — another 14 are in the pipeline. While broadly welcomed, there are growing concerns about potential loopholes — for example, due to differing rules on export of electronic waste.
Negotiations for a Global Treaty on Plastic Pollution progressed, but at the end of the fifth session there was no agreement on reducing plastic production and talks rolled over into 2025.
Top tips to prepare for the year ahead
- Explore how circularity supports wider strategy. Reduced resource use has significant cost benefits as well as helping to deliver wider sustainability ambitions. Define your circular ambition and set quantifiable targets.
- Educate employees on circularity. Ensure design teams have the knowledge and skills they need to design products and services to use fewer materials and with repair, reuse and recycling in mind.
- Seek out cross-industry collaboration. The transition to a circular economy will require systemic change, only achievable through widespread partnership and collaboration.
03. AI dominated the headlines
Artificial intelligence (AI) has been widely adopted, but regulation is only just starting to catch up.
Nearly three-quarters of businesses have started using generative artificial intelligence (Gen AI) and growth shows no signs of slowing. The AI market is predicted to reach $1,339 billion in 2030 — more than six times its current size.
As 2024 progressed, the environmental impacts of this rapid technology growth became clear, with the UN Environmental Programme publishing the most detailed lifecycle assessment to date. It revealed, for example, that AI could represent 35% of Ireland’s energy use within the next year.
Google’s emissions soared 48% due to AI, despite using the technology to identify efficiencies.
As use of AI has grown so too has concern about its ethical, social and environmental impacts. The EU approved the Artificial Intelligence Act, requiring human monitoring of all systems. Stricter standards apply to high-risk applications for health, education, work and critical infrastructure. The Act also calls for standards and reporting on energy efficiency to reduce AI’s environmental impact.
Colorado became the first US state to legislate on AI, while Senator Markey introduced the federal Artificial Intelligence Environmental Impacts Act 2024 to accelerate study of AI impacts and stimulate voluntary reporting.
This regulatory push will mean that businesses and governments will have to get to grips with the issues around AI in 2025 and put plans in place to address negative consequences. To build and maintain customer trust, AI will need to be deployed ethically, securely and transparently, while minimising bias.
It’s also time to focus on the business benefits. Stakeholders want to hear how organisations are using AI to deliver positive results — whether to augment products, optimise processes or create better offerings for customers.
Top tips to prepare for the year ahead
- Familiarise yourself with emerging standards. Initiatives including the Software Carbon Intensity standard aim to bring a harmonised approach to measuring AI impacts.
- Ensure robust governance. The EU AI Act will come into full force in early 2026. Now’s the time to ensure policies and processes are in place guiding responsible AI use.
- Start collecting data. While reporting is currently voluntary, there are growing moves to track AI’s energy use. 2025 is the year to start measuring.
04. Social issues are still overlooked by many companies
Companies and regulators are increasingly shining a spotlight on social issues.
Companies spend one-third of their time and sustainability budget on social issues — and around 40% on environmental challenges. Despite 66% of companies in the US and Europe predicting growing budgets for addressing social sustainability challenges, 26% have little or no awareness of the main issues in their industry — leaving them exposed as regulations increase, particularly around supply chains.
Companies operating in the EU would do well to prioritise supply chain management. Over three-quarters of companies have not integrated responsible procurement into their sustainability strategy. Adoption of the Corporate Sustainability Due Diligence Directive (CSDDD) will require mandatory human rights and environmental due diligence across the supply chain for large organisations from 2027.
In 2024, addressing employee engagement and wellbeing was also confirmed to make good business sense. Over 80% of executives believe that stronger commitments on employee rights would help them attract high-quality talent, appeal to new customers and increase profitability.
This comes as US companies roll back their diversity programmes. Issues including burnout, rapid skills development and adapting to the gig economy have been found to negatively impact the wellbeing of almost half of workers globally.
Discussion of human rights was never far from the headlines in 2024. The European Parliament gave final approval to the Forced Labour Regulation banning the import and sale of products suspected to be made using forced labour. In the UK, a landmark ruling relating to the import of cotton from China put increased pressure on the National Crime Agency to investigate allegations of supply chain mismanagement. Meanwhile, concerns emerged about the human rights record of COP29 host country Azerbaijan.
Top tips to prepare for the year ahead
- Map your value chain and assess risks. It is essential to understand your company’s actual and potential social impacts and put in place plans to address them.
- Publish commitments. As regulation increases, companies face growing pressure for transparency about their impact, but many are failing to be open about their human sustainability goals.
- Publicly report impacts and due diligence processes. CSDDD requires companies to produce an annual statement on its potential and actual adverse impacts and due diligence measures.
05. Sustainability leads challenged by reporting
Sustainability leaders became increasingly concerned about the reporting burden in 2024.
Over 70% of sustainability professionals indicated that a growing focus on reporting was taking them away from the real work of delivering their sustainability goals. It has proved a particular headache for companies facing reporting requirements across multiple jurisdictions. One in three companies also have sustainability goals due to expire in 2025. They need to carve out time alongside reporting to evaluate progress and reflect on future challenges with a view to setting new targets.
Complying with the Corporate Sustainability Reporting Directive (CSRD) topped the list of challenges. It became a reality for 12,000 companies in 2024. In June, the majority of sustainability professionals polled were confident that they would be ready by the year-end deadline. But relatively new requirements, such as disclosures on biodiversity, circularity and workers in the supply chain, were proving challenging.
All eyes will be on this first wave of reports in 2025 and the extent to which their reports are deemed compliant. Watching particularly closely are the large private companies that need to prepare for their first mandatory sustainability report in 2025.
Despite long being an advocate for more reporting, there were signs of a slowdown in Europe, as 17 Member States failed to ratify the CSRD by the September deadline. This led to baby steps towards a simplified reporting regime consolidating multiple requirements — a new Omnibus Simplification Package is due out in February 2025.
Outside Europe, mandatory reporting is on the rise, with new rules taking effect in India, Singapore and Hong Kong. Canada and UAE announced plans to make reporting compulsory for larger organisations. The UK progressed with endorsement of the IFRS Sustainability Disclosure Standards — moving closer to adopting it as a successor to the Task Force on Climate-related Disclosures.
Top tips to prepare for the year ahead
- Survey your sustainability universe. For those facing mandatory reporting for the first time, build a solid base by conducting a thorough double materiality assessment.
- Update your strategy and targets. Based on the outcome of your materiality assessment, update targets to establish clear ambitions for 2026 and beyond.
- Revisit your communications. With so many new regulations, it can be hard to know what good looks like. Review stakeholder needs and how you share your story with them, learning from peers — especially if they take a different approach.
- Keep an eye to the future. Determining ‘materiality’ is challenging, but crucial as regulation increases. You may have to report a broader set of issues in future, especially as the Corporate Sustainability Due Diligence Directive approaches.
Supporting you in the year ahead
We can’t tell you exactly how things will play out in 2025, but we do know that there will be ever greater demand for action.
We’re helping clients to navigate the evolving sustainability landscape through strategy, reporting and communications support. If you’d like to chat about how we can help you prepare to face this and other challenges, please get in touch.
helen.fisher@contexteurope.com
www.contextsustainability.com
by Beth Sandford-Bondy | Nov 26, 2024 | Blog
The Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) are new EU sustainability legislations with a lot in common — not just in name. Here’s a breakdown of key similarities and differences to help you skip the acronym headache.
What are CSDDD and CSRD?
CSDDD is a due diligence legislation requiring companies to identify, prevent, reduce and end negative human rights and environmental impacts in their operations and value chains. Companies also need to report annually on impacts and actions. Read our blog on everything you need to know about CSDDD.
CSRD is a reporting directive requiring companies to perform a double materiality assessment and produce an annual report disclosing the impacts, risks, opportunities and action plans associated with their material environmental, social and governance (ESG) issues.
What are the key similarities and differences between CSDDD and CSRD?
- Core focus
CSDDD focuses on doing — taking action to end adverse impacts. CSRD focuses on materiality and reporting — identifying and transparently disclosing impacts. But there is crossover. Like CSRD, CSDDD also requires annual reporting on adverse impacts and mitigation actions. And although CSRD is more focused on reporting than action, it does ask companies to disclose their climate plans in line with limiting global warming to 1.5°C.
- Scope and timeline
Both apply to large companies operating in the EU. CSRD applies to more companies, including EU-listed SMEs, and is already in effect. CSDDD is narrower — only large companies with 1,000+ employees and a net turnover of €450+ million are in scope. Companies must comply with CSDDD by 2027 at the earliest.
- Topic coverage
The topics covered by the legislations are broadly aligned. Both include human rights and environmental impacts and acknowledge their deeply interconnected nature. CSRD has the bigger picture in mind, covering issues related to governance, consumers and end-users. It also focuses on financial risks and opportunities, unlike CSDDD.
- Value chain coverage
Both cover companies’ own operations as well as upstream and downstream operations — inside and outside Europe. But CSDDD has a smaller downstream scope, only covering certain operations such as distribution, transport and storage. CSRD goes further and covers end-users and product disposal.
- Climate plans and reporting
Both ask for a climate transition plan aligned with limiting global warming to 1.5°C, and a publicly available annual report covering impacts and actions. CSRD’s reporting scope is more ambitious — see topic coverage above.
- Prioritisation
Both require companies to prioritise impacts based on severity and likelihood. But CSRD’s double materiality assessment means companies don’t have to report on issues that are less relevant to them. CSDDD still requires companies to address lower priority impacts after addressing their higher priority issues.
- Stakeholder engagement
Organisations need to continuously engage with internal and external stakeholders for both legislations. CSRD adopters must engage with stakeholders to perform the double materiality assessment and gather the necessary data. CSDDD requires stakeholder engagement throughout the due diligence process — from strategy-setting and training to providing a complaints procedure and monitoring due diligence measures.
- Targeted SME support
Unlike CSRD, CSDDD adopters must try to avoid overly burdening business partners who are small and medium-sized enterprise (SMEs). This could include offering training to SME suppliers or upgrading management systems, and where necessary providing financial support.
- Definitions
The definitions of impacts, risks and opportunities are aligned across the legislations. Impacts refer to potential and actual effects organisations have on the environment and society. Risks and opportunities refer to how sustainability issues could affect the organisation’s balance sheet.
What’s left to do if you already report to CSRD?
If you’re already on top of CSRD then you’re covered for CSDDD reporting and climate plan requirements. But there are some due diligence measures you’ll still need to carry out for CSDDD:
- Create a policy that ensures risk-based due diligence.
- Carry out in-depth assessments of individual suppliers in prioritised areas.
- Take measures to prevent and mitigate potential adverse impacts, and minimise and end actual adverse impacts.
- Provide a notification channel and complaints procedure.
- Monitor the effectiveness of due diligence measures and update them accordingly.
- Provide targeted and proportionate support for business partners who are SMEs, including non-discriminatory contractual assurances.
Context is ready to support you with all your CSRD and CSDDD needs — from devising strategies and conducting double materiality assessments, to writing policies and reports. If you would like to talk about your organisation’s needs, please get in touch via www.contextsustainability.com or helen.fisher@contexteurope.com.
by Meera Robins | Nov 6, 2024 | Blog
There are plenty of climate issues to tackle at the upcoming COP29 this month, but the overwhelming spotlight has been on the controversial host country: Azerbaijan. This will be the second year running that the annual UN climate change conference is held in a petrostate and the third consecutive year in an authoritarian state with a questionable human rights record. Azerbaijan’s love affair with oil and gas and history of suppressing those who speak out against it has left people wondering: should a country like this host a COP?
A petrostate host
No country – petrostate or renewables haven – should be excluded from contributing to climate action. Having a petrostate host a climate COP can increase international pressure on the country to live up to its climate commitments. But Azerbaijan’s lack of decarbonisation progress is concerning. Considered to be a “gift from god” by its president, Ilham Aliyev, fossil fuels make up 90% of Azerbaijan’s exports. Despite claiming to be in an active green transition and setting targets to reduce emissions by 40% by 2050, the government is yet to provide a detailed fossil fuel phase-out plan, as agreed in a landmark pact at COP28. Gas has now replaced oil as the country’s leading export, and production is set to increase by a third in the next decade. Critics have argued that having Azerbaijan – a country where decarbonisation is not a priority – host a global climate summit is troubling.
An autocratic state host
Azerbaijan ranks as one of the least democratic countries globally, with severe limitations on freedoms of expression and assembly of civil society groups, journalists and dissidents. Civil society groups have accused Azerbaijan of hypocrisy after it labelled itself a peacemaker and called for a global truce during this year’s two-week climate conference. The accusation follows a year of campaigning for the release of Gubad Ibadoghlu, Azerbaijani energy markets expert at the London School of Economics and vocal critic of the country’s oil and gas policies. Before his 2023 arrest, Ibadoghlu was outspoken in his belief that Azerbaijan couldn’t replace Russia as an alternative oil and gas supplier to the EU due to limited capacity and geopolitical tensions. Azerbaijan’s government arrested him for religious extremism and counterfeiting money – claims that have been refuted by global advocacy groups and lawyers. There’s concern that Azerbaijan’s harsh crackdown on dissidents, particularly those that oppose current climate policies, will intensify after the conference.
Azerbaijan’s foreign policy chief dismissed the human rights abuse claims, stating that “overburdening the COP agenda with issues not having direct and immediate linkage to climate change is not helpful but detrimental.” But history shows us that, in many cases, effective climate action relies on respect for human rights. Decades of speaking out against governments and large corporates paved the way for the climate policies and regulations we have today. On the one hand, Azerbaijan is hosting a conference centred on climate justice and empowering developing nations, yet on the other, the country is suppressing core pillars of climate activism – freedom of expression and association, and peaceful assembly.
Paul Polman – former Unilever CEO and major sustainability advocate – sums up the controversy: “Rewarding such behaviour by allowing the country [Azerbaijan] to host COP29 sends the wrong message to the international community…how can you push others to higher ambition, while continuing to build your economy on fossil fuels? How can you convene the different players in a spirit of inclusion and compromise, while violently suppressing dissent?”
Global advocacy and civil society groups are pushing national governments, such as the US and the UK, to pressure Azerbaijan to release its political prisoners. After months of campaigning, the message seems to be getting through. In early October, US lawmakers urged Secretary of State Antony Blinken to press President Aliyev on upholding human rights protections ahead of COP29. The EU Parliament took this one step further, condemning Azerbaijan’s human rights record and encouraging EU leaders to use the conference as an opportunity to address the issue. EU Parliament members even stated that Azerbaijan’s abuses were incompatible with hosting COP29.
How can a host country’s human rights transgressions be addressed at future COPs?
Civil society groups, including Amnesty International and Human Rights Watch, have been advocating for increased human rights protections for COP participants in the host country agreements (HCAs). They’ve also called for HCAs to be publicly available immediately after the climate COP host country is announced. This stems from the fact the COP29 HCA is still not public nearly a year on from the announcement of Azerbaijan as the host. Human Rights Watch did obtain a copy of Azerbaijan’s HCA and uncovered significant shortcomings and ambiguities on the protection of human rights for conference participants. It’s no surprise that the involvement of Azerbaijani civil society in this year’s COP is expected to be extremely limited, with state-supported groups filling their space instead. Undertaking the actions proposed by civil society groups would mean future COP participants – especially those from the host country – are able to speak freely during the conference without fear of persecution afterwards.
What happens at COP29 in terms of climate negotiations and how Azerbaijan will respond to human rights criticism remains to be seen. Despite the international scrutiny, the petrostate is not shying away from the global climate stage. In September 2024, Azerbaijan announced its bid to host another global environmental summit – the COP17 UN Biodiversity Conference in 2026. It seems the discourse around Azerbaijan’s role in global sustainability conversations isn’t over yet.
