CSRD and Double Materiality in the Lottery industry

Navigating the CSRD and Double Materiality: A Guide for the Lottery Industry

The Corporate Sustainability Reporting Directive (CSRD) marks a pivotal moment in corporate sustainability reporting, heralding a new era of transparency and accountability. Within the context of the lottery industry, understanding and navigating the CSRD framework is of paramount importance. This high-level guide aims to illuminate the intricacies of the CSRD and its relationship with the concept of Double Materiality, while also providing invaluable resources to aid companies embarking on this transformative journey.

Webinar with Anne Pattberg, Melissa Jacquerioz and Laura Da Silva

On January 10th 2024, digitalRG and The European Lotteries Association hosted a webinar on the topic.

The recording is available to digitalRG members and EL members who have signed up to the EL environmental initiative. To get access, please email : hello@digitalrg.com or book a quick chat here: www.calendly.com/silverfish/15min

Understanding the CSRD

The Legal Foundation

The CSRD, which builds upon its predecessor, the Non-Financial Reporting Directive (NFRD), is a European Union (EU) regulation enacted to enhance the quality and consistency of sustainability reporting among companies operating within the EU. It was officially published in the EU Official Journal on June 1, 2021, and is scheduled to come into effect for reporting years starting on or after January 1, 2023. This directive includes not only the disclosure of environmental and social information but also financial information related to sustainability matters.

Key Provisions of the CSRD

Expanded Scope: The CSRD broadens the scope of reporting entities, encompassing not only listed companies but also large non-listed companies, thereby increasing the number of entities required to disclose sustainability information.

Harmonised Reporting Standards: The CSRD introduces standardised reporting templates and a European Single Electronic Format (ESEF) for sustainability reporting. This aims to facilitate comparability and consistency among reports.

Double Materiality: A core principle of the CSRD is the concept of Double Materiality. It requires companies to report not only on how sustainability issues impact their business (financial materiality) but also on how their activities impact society and the environment (non-financial materiality).

Audit and Assurance: Sustainability reports will undergo external assurance, providing stakeholders with increased confidence in the accuracy and reliability of disclosed information.

The Significance of Double Materiality

Double Materiality, a cornerstone of the CSRD, introduces a dual perspective on materiality that goes beyond traditional financial considerations. It recognises that sustainability matters can have a significant impact on a company's financial performance while also acknowledging the broader societal and environmental impacts of corporate activities.

In practice, Double Materiality requires companies to assess the financial materiality of sustainability issues, such as climate change risks, while also considering the non-financial materiality of their impacts on areas like carbon emissions, human rights, and biodiversity. This dual approach ensures a more comprehensive and holistic understanding of a company's sustainability performance.

Implementing Double Materiality

For companies in the lottery industry, embracing Double Materiality involves a multifaceted approach:

Materiality Assessments: Conduct thorough materiality assessments to identify both financial and non-financial material issues. Engage with stakeholders to understand their concerns and expectations.
Integrated Reporting: Integrate sustainability reporting with financial reporting to reflect the interplay between financial and non-financial factors. This will require robust data collection and analysis.
Risk Management: Develop strategies to mitigate financial risks associated with sustainability issues and actively manage non-financial impacts on society and the environment.
Stakeholder Engagement: Foster transparent and meaningful dialogue with stakeholders, including customers, employees, regulators, and the broader community.

Embarking on the CSRD Journey: Helpful Resources

For companies venturing into the CSRD landscape, there are valuable resources available to assist in compliance and best practices:

DigitalRG.com provides resources and tools to its members, as well as support from experts. Get in touch for more information: hello@digitalrg.com

Official EU Guidance: The European Commission provides official guidance documents to help companies understand and implement the CSRD. This guidance is regularly updated and can be accessed on the European Commission's website.

Global Reporting Initiative (GRI): Information on the GRI framework, which offers valuable templates and standards for sustainability reporting, can be found on the GRI website.

Sustainability Accounting Standards Board (SASB): Learn more about the SASB framework, another valuable resource for sustainability reporting, on the SASB website.

The European Lotteries Association: For industry-specific guidance and support, consider exploring resources provided by The European Lotteries Association, which can be accessed on their official website, including the sustainability guidelines. For a self-assessment tool, contact hello@digitalrg.com

As you embark on your CSRD journey in the lottery industry, remember that transparency and authenticity in sustainability reporting are key. Stakeholders, including investors, customers, and regulators, are increasingly focused on sustainability performance, and compliance with the CSRD will be a significant step towards meeting their expectations.