ADE Green: What you need to know about CSRD in the music industry

The European Union's Corporate Sustainability Reporting Directive (CSRD) was introduced to enhance sustainability reporting on environmental, social, and governance factors across industries. It was adopted in April 2021 as part of the EU's Green Deal, an overarching initiative aimed at making Europe climate-neutral by 2050.

Under the CSRD, companies are required to report their environmental, social, and governance (in short: ESG) data alongside financial statements, ensuring that stakeholders—from investors to regulators—have a clear understanding of an organization’s sustainability efforts. The directive is part of the EU’s commitment to global sustainability goals, such as the Paris Agreement and the UN’s Sustainable Development Goals (SDGs).

For the music and entertainment industry, this could involve reporting on everything from carbon emissions at festivals to diversity and inclusion initiatives in the workforce. The CSRD doesn’t replace existing laws but builds upon them to create a unified approach to sustainability reporting across the EU.

The CSRD requires organizations to disclose detailed ESG information alongside their financial reports. It applies to organizations that meet at least two of the following criteria: over 250 employees, more than €50 million in annual revenue, or assets exceeding €25 million. For music festivals, record labels, venues, and even some artists, this directive will soon require them to disclose detailed information about their sustainability efforts, from energy consumption to social initiatives. Here’s how it affects the industry:

• Double Materiality Analysis: The CSRD mandates a double materiality approach, assessing not only how an event impacts the environment and society but also how external factors affect the organization. This involves evaluating both the positive and negative effects of events on local communities and the environment.

• Baseline Measurement: Organizations must establish a baseline for their ESG performance. This includes tracking energy usage, waste management, and social impact metrics. For events, this means collecting data on everything from energy consumption at festivals to waste produced and community engagement efforts.

• Sustainability Strategy: Developing a comprehensive strategy that aligns with CSRD requirements is crucial. This strategy should address key areas like waste reduction, energy efficiency, and community involvement with clear, measurable goals.

• Performance Management and Reporting: Effective performance management involves setting objectives, monitoring progress, and reporting on sustainability indicators. The CSRD encourages using frameworks like the European Sustainability Reporting Standards (ESRS) to structure these reports, making them accessible and comparable.

If you want to learn more about these topics, please find a more detailed version of this article here.

Large Events and Festivals: For large music festivals and events, the CSRD will necessitate detailed reporting on their environmental footprint, including energy use, waste production, and social impacts. Organizers will need to integrate sustainability into every aspect of event planning and execution, from energy sources to waste management practices.

Record Labels and Venues: Record labels and venues must also adapt. This could mean disclosing the environmental impact of their operations, such as energy consumption in recording studios or waste management practices at concert venues. Labels might also need to consider the sustainability of their touring operations and artist collaborations.

Artists: While the CSRD primarily targets organizations, artists will likely feel the impact through their collaborations and partnerships. They may be asked to align with the sustainability goals of their record labels or event organizers and could benefit from engaging with these standards to enhance their own sustainability credentials.

Voluntary Standards and Industry Collaboration

A key development in response to the CSRD is the creation of voluntary standards (VSME) tailored for small and medium enterprises. These standards offer a flexible approach for organizations that may find full CSRD compliance challenging. For the music and entertainment industry, VSME could simplify reporting requirements and reduce administrative burdens, making sustainability more accessible. Join us at the ADE Green CSRD industry session, where we will discuss how VSME can benefit the events sector and explore practical steps for integrating sustainability into your operations.

The CSRD represents a significant shift towards greater transparency and accountability in sustainability reporting. For the music and entertainment industry, this means embracing new standards, engaging stakeholders, and developing comprehensive sustainability strategies. By proactively addressing these requirements, industry players can not only comply with the CSRD but also lead the way in creating more sustainable and responsible events and operations. To delve deeper into these developments, join ADE Green – in a dedicated industry session, the possibility for voluntary standards (VSME) will be discussed in a smaller consortium. Outcomes of this session will be presented during a panel discussion, where you can hear from experts and industry leaders on how festivals, venues, and music organizations are adapting to CSRD.

ADE Green is bringing together event professionals, leaders and visionaries, artists, festival organizers, and attendees to explore and address some of the most pressing issues of our time. The conference takes place at Felix Meritis on Friday October 18th, featuring interactive programs, workshops and panel discussions.