CSRD and Strategic Value Creation

Vocabulary flashcards related to the Corporate Sustainability Reporting Directive (CSRD) and its strategic implications for businesses.

CSRD (Corporate Sustainability Reporting Directive)

EU directive requiring companies to report on sustainability and environmental, social, and governance (ESG) factors.

NFRD (Non-Financial Reporting Directive)

Previous EU directive that required certain large companies to disclose non-financial information on environmental and social matters; replaced by CSRD.

GRI (Global Reporting Initiative)

International organization providing standards for sustainability reporting used by companies worldwide.

CSR (Corporate Social Responsibility)

A company’s commitment to operate ethically and contribute to economic, social, and environmental sustainability.

ESG (Environmental, Social & Governance)

Framework for evaluating a company’s performance on environmental, social, and governance factors.

ESRS (European Sustainability Reporting Standards)

EU sustainability reporting standards defining how companies should report ESG information under the CSRD.

EFRAG (European Financial Reporting Advisory Group)

Private organization advising the EU Commission on accounting standards for use in the EU.

TCFD (Task Force on Climate-Related Financial Disclosures)

International framework providing recommendations for companies to disclose climate-related financial risks and opportunities.

SME (Small and Medium-Sized Enterprise)

Defined by size criteria such as number of employees, turnover, or balance sheet total.

KPI (Key Performance Indicator)

A measurable value used to track progress toward specific business objectives.

BSC (Balanced Scorecard)

Strategic management tool measuring organizational performance across financial and non-financial perspectives.

LOC (Levers of Control)

Framework identifying four systems managers use to balance innovation and control.

MCS (Management Control Systems)

Processes and tools used by organizations to align employee behavior and decisions with strategic goals.

Double Materiality

Principle requiring organizations to disclose both the impact of sustainability issues on their financial performance and their impact on society and the environment.

Sustainability Balanced Scorecard (SBSC)

Framework that extends the traditional BSC by integrating environmental, social, and governance (ESG) factors into performance measurement frameworks

Diagnostic Control Systems

Formal information systems that monitor sustainability metrics to ensure regulatory compliance.

Interactive Control Systems

Systems that facilitate dialogue on strategic uncertainties and address key sustainability issues.

Belief Systems

Systems that embed sustainability values and corporate missions into organizational culture.

Boundary Systems

Systems that set limits on unacceptable activities through rules and policies

Materiality Filtering

A strategic lever that helps firms focus on meaningful disclosures by prioritizing financially and environmentally relevant factors.