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How the global shipping industry may be impacted by the European Corporate Sustainability Reporting Directive (CSRD)

Published: 01 February 2024

The European Corporate Sustainability Reporting Directive (CSRD) will apply to certain companies in 2024 with reports due in 2025, and the scope will be expanded over the next four years. The new rules will significantly impact industries, bringing both challenges and changes to companies and their practices. While your company may not fall within its scope, the effects of the CSRD could soon reach your operations – even outside the EU. Is your company aware and prepared?


What is the EU Corporate Sustainability Reporting Directive (CSRD) and where did it come from? 

The CSRD has emerged as an evolution and expansion of the European Non-Financial Reporting Directive (NFRD), which was established in 2014 to increase transparency and encourage companies to consider their impact on society and the environment in non-financial terms. The scope of NFRD included around 11,700 large, “public interest” companies in the EU, which had to disclose information on their environmental footprint as well as social and employee matters such as labour rights, health and safety, social dialogue, training, and more. The NFRD required companies in scope to provide details on their due diligence processes, impact assessments and insights into various policies, including anti-corruption and bribery, related procedures, associated risks, incidents, sanctions and the like. However, the NFRD was identified as having some shortcomings in terms of reliability and comparability of reported data. The development of the CSRD intends to address these challenges and expand the sustainability reporting requirements. 

The CSRD requires all large companies and all listed companies in EU, including Small and Medium-sized Enterprises (SMEs), to disclose information concerning their environmental, social, and governance (ESG) performance. This includes a detailed reporting procedure on how they are affected by sustainability issues and how their activities impact people and the environment, thus reflecting a "double materiality" principle.  


Who will need to report under the EU CSRD and when? 

At the time of writing, the applicable EU CSRD reporting requirements are as follows: 

  • From 1 January 2024, for year 2024 (reports due in 2025), it applies to any EU-incorporated company already subject to the Non-Financial Reporting Directive (NFRD)
  • From 1 January 2025, for year 2025 (reports due in 2026), it applies to all large companies incorporated in an EU member state and EU-incorporated parents of large groups (which includes any non-EU subsidiaries of the parent)
  • From 1 January 2026, for year 2026 (reports due in 2027), it applies to small and medium-sized entities (SMEs) that are listed on an EU regulated market
  • From 1 January 2028, for year 2028 (reports due in 2029), it applies to companies whose ultimate parent company is outside the EU but have a significant presence in the EU. These companies must report on the whole global group, including non-EU group companies. 

‘Large companies or groups’ are defined as entities meeting two of the following three criteria: net turnover of more than EUR 50 million, balance sheet total assets greater than EUR 25 million, and/or more than 250 employees. 

A company or group has ‘a significant presence in the EU’ if it carries out substantial activity in the EU, meaning that: 

  • its net turnover in Europe over two consecutive financial years was over EUR 150 million per annum and 
  • it has at least one branch in the EU with a net turnover of at least EUR 40 million, or a subsidiary in the EU that meets at least two of the large company requirements. 


How is this relevant for global shipping?  

The impact of the CSRD on the shipping industry extends beyond direct reporting requirements. Indirect effects are already being felt, with existing market pressures intensifying due to the increasing emphasis on ESG considerations. Large companies, such as cargo owners, retailers or manufacturers, have already committed to reporting on, for example, their Scope 3 emissions, which encompasses emissions from their supply chain. In addition to information on Scope 3 emissions, entities required to report on their sustainability performance may ask their partners to disclose data concerning the environmental and social effects of the company’s operations, as well as details of the various initiatives, that the company may be undertaking to minimize its negative effects.  

The pressure to provide such data may arise from all stakeholders, including investors, financiers and customers, many of whom increasingly demand transparent and comprehensive sustainability information. This commitment is increasing the pressure on small and medium sized shipping companies, which constitute a significant percentage of the world's total merchant fleet. Owners and operators are required to enhance their data collection and reporting to their stakeholders. Moreover, it means that companies that are neither linked to the EU, nor directly engage with EU registered entities, may have to compile and expose a significant volume of information as requested by their direct and indirect business partners, which are subject to mandatory CSRD reporting. 

We are already aware of instances where BIMCO members have been asked to provide information on various indicators that may be important for sustainability reporting. Our advice is to be prudent and be aware of the potential challenges that this may bring. Sustainability related information can be hard to obtain retrospectively. So, it is important to be aware of the potential specific requirements of your suppliers or partners to ensure one can meet their demands because unsatisfactory performance in these parameters could affect the future of existing business relationships. Also, failure to meet these expectations could subsequently result in reputational risks and potential loss of business opportunities. Thus, it is fair to assume that in the longer term, compliance with sustainability standards will not only become a social license to operate, but also one of the primary conditions that will be stipulated by larger entities within the value chain. 


What next? 

The European regulatory landscape for sustainability reporting is dynamic and evolving, meaning that when the challenges and priorities change, so too will regulations like the CSRD. Shipping companies should both be aware of these changes, be prepared to address them and even consider early adoption and alignment with ESG standards. This proactive approach could not only ensure compliance but also offer a competitive advantage, as good ESG performance may lead to improved access to financing, better loan terms, and an enhanced reputation.  

Despite the considerable challenges that the introduction of the CSRD may directly or indirectly impose on shipping companies, there isn't a 'one-size-fits-all' solution. Each company's circumstances and capabilities are unique, which necessitates a tailored approach to sustainability and response to future challenges. We advise companies to carefully evaluate their resources, priorities, and strategies, and to frequently monitor the latest developments in sustainability-related regulations. This may help you to better anticipate and mitigate potential consequences that could negatively impact your company’s performance and prospects for the future. 

BIMCO aims to help its members to adequately prepare for and deal with these challenges through our ESG Network. The BIMCO ESG Network serves as a vital platform to address various ESG-related issues, which range from developing and standardising ESG strategies to balancing decarbonisation efforts with marine biodiversity preservation. The network also provides insights into the streamlining of the data collection and reporting process in response to the growing volume of ESG questionnaires. We aim to help members prepare for the upcoming challenges by offering knowledge, insight and networking and discussion opportunities. By signing up for the BIMCO ESG Network, you can stay at the forefront of industry trends and regulations, foster meaningful connections with other industry professionals, and contribute to shaping a sustainable future for the shipping industry.  

If you are already a BIMCO member, you can sign up to join the ESG Network by contacting Henriette Dybkær hdy@bimco.org.

If you are interested in becoming a member, please contact membership@bimco.org.

You can learn more about CSRD on the European Commission website

For SMEs interested in learning about voluntary alignment with EU sustainability reporting, we advise you to refer to the latest (at the time of publishing of this article) draft standard  for SMEs published by the European Financial Reporting Advisory Group (EFRAG). 


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Christian Baekmark Schiolborg


Christian Baekmark Schiolborg

Manager, Marine Environment

Copenhagen, Denmark