How is the CSRD redefining companies' low-carbon strategies?

New European requirements are forcing organizations to rethink their energy models and publish detailed reports on their carbon footprint. Through carbon assessments, companies are becoming aware of their dependence on fossil fuels—an essential first step toward meeting the transparency requirements imposed by current regulations.

Conducting a BEGES is much more than just a measurement exercise; in the future, it will become a legal requirement that companies must comply with, under the new European directives and mandatory environmental standards.

These directives, such as the CSRD (Corporate Sustainability Reporting Directive), require companies to publish detailed reports on their carbon emissions, thereby encouraging them to better structure and adapt their sustainability strategies while enhancing their carbon competitiveness.

This approach helps organizations understand the extent of their dependence on fossil fuels. By identifying sources of direct and indirect emissions, BEGES highlights the activities within a company that rely most heavily on fossil fuels, thereby fostering a comprehensive understanding of the decarbonization measures that need to be implemented—particularly in light of the emissions reduction standards that must be met in the coming years.

Companies affected by these disclosures must not only measure their carbon footprint but also comply with the new transparency rules, which require them to implement long-term emission reduction plans.

For many companies, the figures speak for themselves: according to the International Energy Agency (IEA), the share of fossil fuels (oil, coal, and natural gas) in the global energy mix has remained around 80 percent for decades and is only now beginning to decline.

This percentage remains high in sectors such as heavy industry, transportation, and manufacturing, where greenhouse gas (GHG) emissions are significant. Companies in these sectors are therefore particularly affected by current regulations and must not only publish reports but also demonstrate their compliance through concrete and verifiable actions.

With increased sustainability disclosure and reporting requirements, companies must provide reliable and verifiable data to demonstrate their environmental commitment and compliance. These reports enhance the company by giving it an ethical dimension that meets the growing expectations of the market and investors.

In addition, they enable organizations to structure their climate strategy in a precise manner, adopting a long-term vision to achieve their environmental goals and comply with the standards set by new regulations.

Furthermore, one negative impact would be the inevitable increase in fossil fuel costs for the company. The Paris Agreement, which entered into force in 2016, already encourages us to rethink our consumption of fossil fuels by setting a goal of carbon neutrality by 2050.

This transition is being driven by regulatory and tax requirements aimed at reducing emissions. Available data indicate that the expected decline in oil production—across all types of oil—projected for around 2035, for example, will exacerbate this trend.

For organizations that are heavily dependent on these resources, this means increasingly expensive inputs and reduced economic flexibility. This is forcing these companies to rethink their business models to adapt to a more challenging energy landscape.

➡️Rising costs of fossil fuels

According to the Ministry of Energy Transition, oil and natural gas prices were extremely volatile in the first half of 2022, due to the geopolitical tensions caused by the war in Ukraine.

“The price of Brent crude stands at 95.8 euros per barrel ($100.8), up 60% from 2021.”

“Spot gas prices on European markets are highly volatile: they surged following the invasion of Ukraine in late February 2022 and peaked in August after Gazprom announced it would halt natural gas deliveries. The spot price in France (PEG) averaged 98.6 €/MWh in 2022.”

➡️Economic risk for dependent businesses

In Europe, carbon prices under the EU Emissions Trading System (EU-ETS) exceeded 90 euros per metric ton in 2022. With prices projected to rise steadily, this could result in significant additional costs for carbon-intensive industries, particularly energy and manufacturing companies.

➡️Decline in investment in fossil fuels

In its report “Net Zero by 2050, ” the IEA projects a 2% annual decline in demand for oil and gas through 2050. As for coal demand, it is expected to fall by 50% over the next decade.

♾️This reduction directly leads to a decline in investment in fossil fuels. According to an IAE report, this trend is further encouraged in the EU by “the accelerated deployment of renewable energy and improvements in energy efficiency.”

This will involve massive investment in renewable energy (more than $2,000 billion annually by 2030, according to the IEA) and will make fossil fuels more expensive for companies that are still heavily reliant on them.

The transition could reduce the capital available for fossil fuel projects, further increasing costs for industries that have not yet diversified their energy sources.

These figures underscore the urgent need for companies to prepare for a structural increase in fossil fuel costs, which could quickly erode their margins and limit their competitiveness if they do not diversify their energy sources.

♻️Therefore, to strengthen economic resilience in the face of these changes, businesses need to adopt an integrated and systematic approach:

• Using reliable data and an in-depth analysis of environmental indicators makes it possible to identify the threats associated with dependence on fossil fuels.
• Climate change management must be integrated into the core of the company's strategy.

📄In addition, incorporating sustainability goals and specific metrics helps companies better prepare for anticipated cost increases. Reporting this information in accordance with standards such as those of the CSRD enhances transparency and helps build stakeholder confidence in efforts to transition to a more resilient and responsible model.

Regular monitoring through greenhouse gas emissions reporting is therefore becoming a key tool for anticipating these economic risks.

Effective in 2024, the CSRD requires large companies to publish sustainability reports on a regular and transparent basis. This directive extends its scope to include small and medium-sized enterprises (SMEs), which will also be required to comply with these new reporting standards.

To help them comply with the CSRD, SMEs can take advantage of resources and support programs.

This reporting must be aligned with ESG (Environmental, Social, and Governance) principles and aims to increase corporate transparency regarding their practices in these areas.

La CSRD remplace la précédente NFRD (Non-Financial Reporting Directive), en élargissant son champ d’application : le nombre d’entreprises européennes concernées passe de 11 700 à plus 50 000 sociétés. Ces dernières doivent désormais fournir des informations sur leurs impacts environnementaux, sociaux, et sur la façon dont elles gèrent leurs risques liés à la durabilité, entre autres par la réalisation d’un BEGES.

The publication of this data is essential to ensuring that European companies are accountable and committed to a sustainable transition, while providing a clear account of their practices.

Another objective of the CSRD is to enable better comparison of greenhouse gas emissions, thereby supporting investor decision-making and promoting organizational accountability. Indeed, this information will be public and standardized, making it easier for stakeholders to analyze. Reports must include, among other things, greenhouse gas emissions—covering Scopes 1, 2, and 3—as well as impacts on biodiversity and natural resources.

This directive also enables companies to comply with common standards, such as ISO 14064 for GHG reporting, thereby enhancing their credibility in the eyes of stakeholders.

Finally, analyzing these indicators enables organizations to take effective action by identifying areas for improvement, thereby facilitating the implementation of sustainable solutions.

The SFDR specifically targets financial institutions by imposing transparency requirements regarding the ESG impact of their investments. Since March 2021, funds have been required to classify their products based on their level of sustainability (Articles 6, 8, or 9, depending on their level of commitment to sustainability). 

This classification helps investors better understand the sustainability commitments of investment products and align their choices with their personal and institutional environmental, social, and governance (ESG) goals.

In 2023, these rules were strengthened, with an emphasis on curbing greenwashing, to ensure that investments labeled as “green” actually meet strict environmental standards.

This increased transparency can become a strategic advantage for companies. A study conducted by BPI France on ESG issues shows that companies that adhere to rigorous ESG standards generally experience higher customer retention rates and attract more investment.

In fact, according to an ESG survey conducted in 2023 by BNP Paribas:“76% of investors believe that climate change and decarbonization are factors important enough to influence their investment strategy.”

In other words, companies that take a proactive approach in this area enjoy greater customer loyalty and increased market value.

By adopting low-carbon strategies, organizations not only limit their exposure to rising energy costs but also strengthen their competitiveness by positioning themselves as leaders in the environmental transition.

To facilitate this transition, Decarbo’Solution® helps you turn these climate challenges into concrete opportunities for sustainable growth through our Décarbon’Achat® and Décarbon’AO® solutions.

➡️ Décarbon’Achats® offers your suppliers the opportunity to calculate their Product Carbon Footprint (PCF) for free, which significantly improves the quality of your Scope 3 data. This approach enables a comprehensive assessment of GHG emissions, while facilitating more sustainable and responsible procurement management and supporting the publication of environmental reports.

➡️ Décarbon’AO® incorporates decarbonization goals directly into your requests for proposals, allowing you to select the suppliers with the lowest carbon footprint. This approach strengthens your Carbon Competitiveness® and helps you meet new environmental and regulatory requirements.

The transition to a low-carbon world is more than just an environmental necessity; it has become an unavoidable economic and regulatory requirement. Companies must now anticipate the structural rise in fossil fuel costs and meet the transparency requirements imposed by European directives such as the CSRD and the SFDR.

The BEGES helps organizations recognize their dependence on fossil fuels, identify opportunities for decarbonization, and adopt a sustainable energy strategy.

By incorporating these factors into their business models, companies can not only reduce their exposure to energy price fluctuations but also position themselves as leaders in the environmental transition, thereby strengthening their competitiveness. Aligning with ESG principles increases their appeal to investors and fosters customer loyalty.

With tools such as Décarbon’Achats® and Décarbon’AO®, Decarbo’Solution® supports companies in this transition by helping them reduce their carbon footprint and improve the quality of their Scope 3 emissions, particularly in procurement. Turning these challenges into concrete opportunities is now essential to ensuring organizations’ economic viability, competitiveness, and long-term sustainability.

Carbon is no longer just a compliance issue, but a true strategic driver of sustainable development.