New Circular Economy Standard Likely Aligns with EU Sustainability Reporting Requirements

The recently released ISO 59004 standard for circular economy offers a timely resource for companies grappling with the European Sustainability Reporting Standards (ESRS) mandated under the Corporate Sustainability Reporting Directive (CSRD). While the ESRS are new, there's a strong indication that companies reporting under the CSRD can leverage the newly released ISO 59004 to meet some of the ESRS requirements.

ESRS and Environmental Footprint Methods

The ESRS, specifically point AR-6 of the Circular Economy E5 section, outlines methodologies for assessing a company's impacts, risks, and opportunities (IRO) throughout its operations and value chain. Among the recommended methodologies is the Commission Recommendation 2021/2279 on the use of Environmental Footprint methods. This recommendation itself references ISO standards 14040, 14044, 14067, 14046, and 14046, which primarily focus on life cycle assessments and environmental management related to products and their carbon footprint.

ISO 59004 and Circularity Assessments

At the time of the drafting of ESRS, there were no dedicated standards for applying the principles of economic circularity on products and operations. The latest introduction of the ISO 59004 last week provides a dedicated approach for assessing economic circularity – it notably presents a valuable tool for companies and reporting entities when conducting assessments under ESRS E5 point AR-6 specifically. While the use of ISO 59004 (or other standards) is not mandatory in ESRS reporting, it will likely align well with the recommended methodologies and can provide a strong foundation for circularity assessments.

Looking Ahead

The alignment between ISO 59004 and the ESRS highlights the increasing focus on circularity within sustainability reporting. Companies aiming to comply with the CSRD and demonstrate their commitment to a circular economy should strongly consider incorporating ISO 59004 into their reporting strategies. Applying such methodologies and seeking certification on the successful application and implementation of these approaches, can provide further credibility and transparency for reporting entities under the CSRD.

Rio can Help You

Here at Rio, The Consultant Group is a team of dedicated sustainability professionals with a strong industry track record that can guide you on your sustainability journey.

Rio can help you cut through the green jargon and deliver actionable steps, by getting the granular data you need to make sustainable choices and ensure compliance with regulations. We provide practical, on-the-ground solutions and in-depth circular economy data that goes beyond just meeting compliance. We can help your business thrive in a sustainable future. Gain access to detailed data that will shape your ESG narrative using our sustainability AI-driven reporting platform.

Don’t hesitate to contact luke.obrien@rio.ai to schedule a meeting and discuss your needs in more detail/