5- Sustainability Frameworks and Climate Change

These flashcards are designed to help students review key concepts from their lecture about sustainability frameworks and the impacts of climate change across various industries.

What is the primary focus of frameworks with CSRD in the luxury industry?

Compulsory compliance frameworks in the value chain, including ESRS principles and examples of social and environmental frameworks.

What does CSRD stand for?

Corporate Sustainability Reporting Directive.

What are the three key texts that restructure sustainability reporting requirements?

1. Taxonomy Regulation 2. SFRD (Sustainable Finance Disclosure Regulation) 3. CSRD Directive.

What is the impact of climate change on the fashion industry?

The fashion industry is responsible for 8-10% of global GHG emissions, more than international flights and maritime shipping combined.

What are the five major greenhouse gases?

1. Water vapor 2. Carbon dioxide (CO2) 3. Methane (CH4) 4. Nitrous oxide (N2O) 5. Ozone (O3).

What is 'Double Materiality' in the context of CSRD?

Double Materiality refers to assessing sustainability impacts, risks, and opportunities from both impact and financial perspectives.

What are the key areas of reporting under CSRD?

Governance, Strategy, Implementation, and Performance Measurement & Objectives.

What percentage of clothing produced today uses synthetic materials such as polyester?

Over 50%.

What is the major contributor to carbon emissions from hotels?

Energy consumption, accounting for approximately 60% of a hotel's carbon footprint.

What is the significance of a Life Cycle Assessment (LCA) in the beauty industry?

It assesses the environmental impact of a cosmetic product from conception to end-of-life.

What is a major environmental impact associated with sourcing raw materials in the watch and jewelry industry?

Air and water pollution, and soil degradation due to extraction processes.

How much CO2 is emitted on average per carat of cut diamond?

160 kg of CO2.

What is the main purpose of the CSRD?

To harmonize and strengthen sustainability reporting across EU companies.

How does the CSRD support the Paris Climate Agreement?

By aligning companies’ CSR roadmaps with EU Green Deal sustainability goals.

What must companies establish under CSRD?

• A business model

• Analysis of extra-financial risks

• Policies and performance results

What new concept did CSRD introduce compared to NFRD?

The Double Materiality principle.

Is CSRD focused on results or reporting obligations?

Reporting obligations — to standardize and make data comparable.

When does CSRD become effective for large listed companies?

2024 (reporting in 2025).

When do listed SMEs start reporting under CSRD?

2026–2028 (depending on the phase).

Which non-EU companies are included?

Those with ≥€150M EU turnover and a subsidiary earning >€40M in the EU.

What is the goal of the Omnibus Law?

To reduce administrative burden on companies.

What are the main changes introduced?

• Higher applicability thresholds (>1,000 employees, >€50M sales)

• Postponed deadlines (2 years)

• Simplified ESRS indicators

• Narrowed value chain focus (tier-1 suppliers only)

• Voluntary SME reporting

How was the CS3D implementation affected?

Postponed from 2026 to 2028, with limited due diligence and lighter sanctions.

Name the four CSRD reporting areas.

Governance, Strategy, Implementation (IROs), and Performance & Objectives.

What are the three themes of CSRD reporting?

Environment (E), Social (S), and Governance (G).

What are ESRS?

European Sustainability Reporting Standards — the detailed CSRD framework.

How many disclosure requirements (DR) are in total?

82 Disclosure Requirements (DR).

Name the types of standards and when they apply.

• Cross-functional: 2024

• Industry-specific: 2025

• Listed companies: 2026

• Non-EU companies: 2028

Which sectors are prioritized for industry standards?

Agriculture, Mining, Energy, Transport, Textiles, Food & Beverages.

What are the two types of materiality in CSRD?

Financial and Impact materiality.

Define financial materiality.

How sustainability issues affect company value (losses or gains).

Define impact materiality.

How company activities affect society and the environment.

What’s the difference between gross and net materiality?

Gross = before mitigation; Net = after accounting for company’s management capacity.What does IROS stand for?

What does IROS stand for?

Impact, Risk, and Opportunity System.

Give an example of a sustainability risk.

Regulatory fines or reputational loss from environmental damage.

What are the top five greenhouse gases?

Water vapour, CO₂, Methane (CH₄), Nitrous oxide (N₂O), and Ozone (O₃).

What percentage of global GHGs is fashion responsible for?

8–10%, more than aviation and shipping combined.

What’s the main environmental issue with polyester?

It’s plastic-based, derived from fossil fuels, and non-biodegradable.

What are the biggest emission sources in the beauty industry?

• Product use (40%)

• Packaging (20%)

• Ingredients & transport

How many packaging units does beauty produce yearly?

Around 120 billion.

How much CO₂ is emitted per carat of diamond?

~160 kg CO₂ per carat.

What resources are used for one gold ring?

1,500 L of water and 100 g of cyanide.

What share of global GHG comes from hospitality and travel?

Around 11%, possibly doubling by 2050.

Average CO₂ per hotel night?

About 10.5 kg.

What is the top emission source for wine?

Packaging (glass bottles – ~40–50% of footprint)

What’s the second largest source?

Transport (19%)