Measurement & Analytics

CSRD requirements for freight forwarders: Preparing shippers for emissions reporting

Image of the term "CSRD" on a pink Pledge branded background

The Corporate Sustainability Reporting Directive (CSRD) has come into force in the EU, potentially impacting over 50,000 businesses inside and outside the bloc.

If you’re a freight forwarder, this regulation will affect you and your customers, so you’ll need to start planning now to ensure you’re prepared for its impact. In this blog post, we’ll tell you everything you need to know about CSRD reporting, including how you can help your customers meet their CSRD requirements.

What is CSRD?

The CSRD is a significant regulatory framework enacted by the European Union Council at the end of 2022 that supersedes the existing Non-Financial Reporting Directive (NFRD). The first set of businesses impacted by the CSRD will be those currently covered by the NFRD (large enterprises), with small and medium enterprises (SMEs) as well as non-EU companies requiring participation at later dates (2026 and 2028, with reporting due in 2027 and 2029).

In force in the EU since the start of 2023, the CSRD is designed to enhance corporate sustainability reporting in general, but this will also have significant knock-on effects for freight forwarders and their customers. 

Why should freight forwarders care about CSRD reporting requirements?

On the face of it, you may think that CSRD requirements don't impact freight forwarders. However, one of the primary objectives of the CSRD is to streamline and standardise sustainability reporting for all companies that meet the reporting criteria. Many large corporations will need to report their scope 3 emissions — including emissions generated from both upstream and downstream transportation and distribution of goods (scope 3 categories 4 and 9 of the Greenhouse Gas Protocol) — for 2024, from 2025 onwards. The requirement to include scope 3 emissions in CSRD reporting is a new addition when compared to NFRD and other sustainability regulations, requiring further organisation and preparation from qualifying businesses.

In order to meet the requirement to report scope 3 categories 4 and 9, corporations that rely on the movement of goods will look to their forwarders for help. 

As a freight forwarder, you have access to valuable shipment data that is key to calculating shippers’ freight emissions for scope 3 categories 4 and 9. Shippers will depend on you to calculate these emissions that make up a significant part of their CSRD reporting requirements.

From now, you can expect to see a significant rise in CSRD reporting being included in RFPs from shippers that operate in the EU.

Below, we’ve highlighted everything you need to know about CSRD so you can prepare for the impending requests from your shippers.

Who needs to prepare a CSRD report?

The CSRD aims to establish common, consistent and standardised reporting practices for environmental, social and governance (ESG) factors within the EU, much like existing financial accounting and reporting standards. Companies that meet the following criteria will need to start reporting under the CSRD:

  • Have over 250 employees.

  • Generate annual revenues exceeding €40 million.

  • Possesses total assets surpassing €20 million.

  • Entities with more than 10 employees or generating more than €20 million in revenue.

  • International or non-EU entities that generate annual revenues surpassing €150 million within the EU and have at least one subsidiary or branch in the EU meeting specific thresholds.

Companies meeting these criteria will need to submit an annual report addressing how sustainability influences their business operations and their environmental and social impact — including their scope 3 emissions.

The CSRD timeline

There are stringent requirements for how businesses should prepare CSRD reports. Below, we’ve outlined the main requirements to give you an idea of what your customers will expect from you when it comes to meeting their CSRD requirements.

CSRD report preparation and submission:

  • Large listed companies are required to submit their first CSRD report in early 2025, covering their environmental performance during the fiscal year 2024.

  • Listed SMEs will begin reporting on 2026 emissions in 2027, following the streamlined SME guidelines outlined by the CSRD.

  • Non-European companies that operate and generate more than €150m in revenue within the EU will need to start reporting on 2028 emissions in 2029.

A roadmap showing the significant reporting milestones for CSRD regulation
Reporting milestone roadmap for CSRD
What are the CSRD requirements for qualifying companies?

While it’s not directly relevant to you as a freight forwarder, it’s important to be aware of the CSRD reporting requirements for businesses so you can understand why they’re making requests for emissions reports that meet the CSRD reporting requirements. 

Here’s a breakdown of what information businesses are required to disclose under the CSRD:

  • The selection of ESG themes and risks

  • Sustainability targets and progress

  • Strategies for transitioning to a sustainable economy

  • Identification of sustainability risks

  • Evaluation of strategy resilience

  • Disclosure of fossil fuel exposure

  • Environmental protection policies

  • Social responsibility initiatives

  • Human rights respect

  • Anti-corruption practices

  • Corporate governance

  • Stakeholder interests

Companies are also required to prepare their financial and management statements in an electronic format and digitally tag their sustainability information according to a specified categorisation system.

Third-Party assurance

Companies that need to comply with CSRD requirements will need to seek "limited" assurance for the sustainability information they disclose. This involves engaging an independent and trusted third-party — such as an independent emissions reporting company or auditor — to review the data.

When will freight forwarders see shippers requesting help with CSRD reporting?

Large corporate entities based in the EU will be required to submit the first CSRD reports in 2025, reporting on the emissions from 2024. For freight forwarders, this means that they will need to record and track the necessary shipment data from 2024 and have a reporting method in place by the beginning of 2025 if they are to meet the requirements of the shippers they work with.

To stay ahead, freight forwarders should start preparing for calculating and reporting scope 3 categories now. Many companies already require forwarders to provide sustainability as part of their services when going to tender. With CSRD reporting in the EU coming into force, the requirement to provide emissions measurements that meet CSRD reporting requirements will only increase.

For forwarders, there’s an opportunity to gain a significant competitive advantage by offering more than the bare minimum when it comes to sustainability requirements. By offering highly accurate, transparent and accredited emissions measurement and reporting that enables forwarders to meet CSRD, you can differentiate your business and turn regulatory changes, like CSRD, into opportunities for success. 

How Pledge can help you

At Pledge, our platform enables you to offer scope 3 emissions calculations and reporting as part of your forwarding service. It’s simple to use, can be easily integrated into your TMS or customer portal and provides audit-ready reports that enable your customers to meet their CSRD requirements.

Sign up for a free trial of our emissions measurement platform to see how we can help you prepare for the impact of the CSRD regulations.