Adopt science-based guidelines to improve EU CSRD compliance, WWF says

Companies and financial institutions should align environmental goals with the Science-Based Targets initiative to allow the EU to better monitor corporate climate action, a WWF report concludes

Recommending that companies and financial institutions use the Science-Based Targets initiative framework, which outlines criteria for companies looking to set climate targets in line with a 1.5C trajectory, would help the EU to ensure that net zero emissions goals are robust and the aims of the EU’s Corporate Sustainability Reporting Directive are met, says a report by the French branch of the conservation organisation World Wide Fund for Nature.

As well as recommending that companies align with the SBTi, the WWF suggests that the EU develops a “methodological framework”, aligned with the SBTi, as a reference for companies and financial institutions to set their targets. This framework should become “mandatory over time” and would enable comparison between organisations’ targets, the WWF says. 

By the end of 2023, 5 per cent of companies in the scope of the CSRD had made a commitment to set SBTi-aligned targets, equalling around 2,500 companies, it says. The organisation calculates that if current adoption rates continue, by the end of 2026 around 37 per cent of EU companies — roughly 18,500 businesses — in the scope of CSRD will have committed to set SBTi goals.

The majority of the companies are in Germany (120), followed by France (110) and Sweden (106).

The WWF also recommends that “appropriate means” are allocated to developing a robust measurement, reporting and verification process at the EU level to monitor corporate targets. 

Strengthening corporate climate target setting will likewise help companies align with the Corporate Sustainability Due Diligence Directive, which is still under negotiation, it adds. The organisation calculates that if current adoption rates continue, all EU companies that could end up in the scope of the CSDDD will have set SBTi goals by the end of 2026.

The report is available to read here.