The Corporate Sustainability Reporting Directive in Textile Industry

Abstract

This thesis in International Business bachelor’s degree program with a specialisation in Accounting and Finance, explores the new mandatory non-financial sustainability reporting, which will start to apply for companies in European Union. The theory will describe and explain the concepts of Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS). To fulfil the Corporate Sustainability Reporting Directive (CSRD) requirements, companies must apply the European Sustainability Reporting Standards (ESRS) framework to their non-financial reporting. The European Sustainability Reporting Standards compromise of subjects in environment, social matters, and governance. As one of the ESRS topics is climate change, this will be explored to a larger extent, as it is a founding topic connected to all sustainability. The CSRD will start to apply yearly to different companies, starting from the largest and aiming to be fulfilled with the same overview in small and medium size companies in the coming years. The first reporting period will be applied including and from financial year 2024 and will here forth be mandatory in all European Union countries. The monitoring of the regulation fulfilment shall be placed on each member country and enforced as per local laws and regulations.

The focal research questions explore, are textile companies reporting on climate change and to what extent, as this is a primary matter relating to all sustainability. Also, are textile companies fulfilling the CSRD requirements in their non-financial reporting according to the ESRS framework and lastly, what are the current focus points of the company’s non-financial reports in regards of sustainability.

The empirical analysis examines the sustainability reporting, with an attention especially on climate change, in four international companies in Europe. These assessed companies are Marimekko (Finland), Klopman International (Italy), Puma (Germany) and Inditex (Spain), all of which are companies from the textile industry and operating in the European Union. In the results section, detailed data gathered in the analysis, will be compared between the companies.

The conclusion of the thesis contains suggested topics for further research and mention of key findings of the analysis.