The legal framework governing the CSR approach of organizations is increasingly rigorous, and reporting itself is increasingly codified. In particular, this allows companies to justify their commitment, their usefulness and their way of contributing to the common good. The DPEF (Declaration on Extra-Financial Performance) and the CSRD (Corporate Sustainability Reporting Directive) both go in this direction. This article focuses on the content of the DPEF, so that nothing escapes you when writing it.
Drafting the DPEF: the major issues
If you are an organization that has the obligation to submit a DPEF, one of the main issues is of course to comply with the regulations in force. The companies concerned are:
- Listed companies with more than 500 employees and whose balance sheet exceeds 20 million euros or whose turnover exceeds 40 million euros;
- Unlisted companies, with an average workforce of 500 employees, whose balance sheet or turnover exceeds 100 million euros.
But beyond this obligation, other issues come into play. In particular that of synthesizing your results to make them easily accessible to as many people as possible. Indeed, this DPEF can be seen as a real opportunity to show and understand your commitments. It would indeed be a shame if your social, societal or environmental commitment went unnoticed. This report is therefore an opportunity to attract investors, new stakeholders, and new talent. A well-drafted and informed NFPS can be very effective and beneficial. So even if no text obliges you to write CSR reporting, it is in your interest to take the initiative.
The content of the DPEF in 2023
The DPEF requires companies that are subject to it to publish a certain amount of information in detail. It will then be checked by an Independent Third Party Organization (OTI) which will attest to its compliance and sincerity. Four categories of information must be included in your DPEF:
- The social and/or societal consequences of business activities and relationships;
- The environmental consequences;
- Respect for human rights (for listed and similar entities);
- The fight against corruption (idem).
The DPEF thus proposes a risk-based approach. It focuses on their identification and the presentation of the actions implemented to manage them. Thus, French companies must present for each of the categories listed above:
- Their business model;
- A description of the main risks related to the activity (created by its business relationships, its products or its services);
- A description of the due diligence policies and procedures implemented to prevent, identify and mitigate the occurrence of the mentioned risks;
- The results of these policies, including key performance indicators.
If the company does not implement any policy to prevent one or more risks, the DPEF must include a clear and reasoned explanation of the reasons for this absence. In the same way, the organization must justify the potential choice not to include certain themes, such as the fight against discrimination, the impact of its activities on the environment, etc.
DPEF Content Guides and Templates
You don’t quite know which end to take this DPEF? Or not sure how to highlight it for your stakeholders? It’s normal. This approach can be scary. However, experts have worked on this question for you.
There are guides and templates designed to help you write your own DEFP. There Task Force on Climate Related Financial Disclosures has, for example, produced a comprehensive report of recommendations that can be easily applied by all types of organizations.
Similarly, the Sustainability Accounting Standards Board (SASB) has drafted a guide to standards enabling organizations to provide segment information on sustainability risks and opportunities that could affect the company’s cash flow or access to financing in the short, medium or long term.
In France, Nicomak puts its experts at your service to assist you in drafting your DPEF, structuring dialogue with your stakeholders, collecting indicators used to inform your CSR reporting, and much more…