GeoAI as a CSRD compliance partner

What is CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is the new European standard that regulates how EU companies must report on ESG vectors. The main change comes with the introduction of the ESRS (European Sustainability Reporting Standards), which aim to standardize how companies measure their environmental impact.
Although the ESRS are aligned with the well-known GRI(Global Reporting Initiative) criteria, they are more precise and exhaustive.
Now, companies must address what is known as “dual materiality”: knowing how their operations impact their environment and vice versa. This comprehensive approach ensures that companies not only report on how they affect the world around them, but also how changes in their environment can influence their business. This framework enables companies to better identify and manage sustainability-related risks and opportunities.

Who is affected and what is the scope of ESRS?

Until now, sustainability reporting was an activity reserved for companies considered to be in the “public interest”. The CSRD involves in this process the bulk of companies that must work to improve the impact of their operations on the environment, without forgetting the bottom line. The order of implementation will be as follows:

2024: companies affected by the previous regulation (NFRD) will start. That is: listed companies, financial institutions and insurance companies; as well as companies with more than 500 employees.

2025: other large companies (listed or unlisted).

2026: Pymes cotizadas con menos de 250 empleados.

Fiscal year 2028: companies outside the European Union (EU) that meet certain requirements.

These companies should take into consideration, when analyzing their dual materiality, some issues linked to the ESG vectors that the CSRD includes in the ESRS to involve the private sector in the transition to a circular and regenerative economy. As far as the environment is concerned, it is interesting to note the concreteness and breadth that these standards contemplate:

ESRS E1. Weather

ESRS E2. Contamination

ESRS E3. Water and marine resources

ESRS E4. Biodiversity and ecosystems

ESRS E5. Resource use and circular economy

GeoAI: analyzing the operating environment 1,000 kilometers from the ground

The dual materiality, financial and impact, to which Spanish companies will have to submit, not only represents a radical change of paradigm, but also introduces a new challenge: to know the real bidirectional impact of companies’ operations and their environment. All this, without forgetting the need to maintain a positive income statement. The goal of all this is clear: to identify opportunities for improvement to build a market with a focus on the transition to a circular economy. Geospatial artificial intelligence (GeoIA) combines geospatial data with predictive and analytical artificial intelligence algorithms to turn data into information with the potential to aid decision making. Agforest experts agree that, if CSRD puts the focus on decision making, GeoIA will be indispensable to make its application successful. Satellites orbiting within 1,000 kilometers of the Earth are becoming more numerous, allowing access to unbiased data that will help in this work.

Three examples of the potential of GeoAI for CSRD reporting

Accuracy in environmental impact assessment

GeoIA can make use of geospatial geospatial data to monitor greenhouse gases, vacant land or deforestation. In addition, GeoIA can develop predictive models that enable decision making to avoid the negative impact of all these factors on the sustainability of operations and the habitability of the ecosystem.

Management of natural resources

Water is one of the major challenges. As many reports point out, 30% of drinking water is lost in the water supply network. Predicting water leaks, especially in the most demanding industries, or optimizing crop irrigation are the main applications of this technology that will improve companies’ bottom lines. that will improve companies’ bottom lines.

Risk management and resilience plans

Dual materiality takes into account how the environment can interfere with business operations. Floods, droughts, earthquakes and other natural phenomena are some of the aspects that GeoIA allows to accurately analyze in order to make decisions that mitigate the negative consequences on the income statement, ensuring sustainability. GeoIA allows for accurate analysis in order to make decisions that mitigate negative consequences on the income statement, while ensuring sustainability..

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