Connecting the dots of Energy Efficiency Directive with sustainable finance reporting. The full potential unlocked.

Recommendation 2024/2002 issued by the European Commission provides guidance on implementing the Energy Efficiency Directive (EED) in harmony with the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). The recommendation emphasizes the integration of energy audits and energy management systems, the financing of energy efficiency, and reporting activities related to sustainability, which are now mandatory for many enterprises. Energy Efficiency Networks are encouraged, particularly for SMEs, to share experiences and expertise for enhanced efficiency and greenhouse gas emissions reduction. The recommendation highlights the monetization of non-energy benefits from energy efficiency measures, such as improved business performance and air quality, as well as the adoption of renewable energy sources. Energy performance contracts are also detailed, where payment is linked to actual energy savings, which can offer regulatory exemptions when aligned with the EED. ESRS reporting standards call for transparency in financial and sustainability performance, including energy. Reporting under EED must align with the ESRS, obliging companies to document energy consumption and efficiency measures' implementation rates in their annual reports. While Recommendation 2024/2002 does not explicitly connect with other directives, it prompts member states to consider the integration of EED requirements with obligations of CSRD and CSDDD during their transposition process. These complementary directives aim to enhance corporate sustainability reporting and due diligence across companies' activities and supply chains for sustainability purposes. The approach is iterative, encouraging continuity in compliance reporting and promoting the widespread adoption of energy efficiency and climate mitigation measures.