ESG must be embedded in your strategy and form the overall narrative and purpose of your organisation. Every aspect of your business is in the spotlight from how you treat employees, your supply chain, how you use and manage data, right through to your environmental credentials. It's now clear, that having a clear purpose and positive impact on the planet and its people matters like never before.
The first step to embed ESG into a business must be taken by the board, taking on the responsibility and accountability to drive the transition towards becoming an environmentally and socially responsible business. Stakeholders are pushing for increased transparency and it’s working. New mandatory reporting standards are fast approaching and, where it’s not mandatory, lenders and investors are still withdrawing funding from, and voting against, businesses not considering ESG.
ESG isn’t a hygiene factor for today. Its impact is already profound and it’s a critical factor for businesses that want to be ready for further fundamental changes coming down the track. ESG is no longer a choice; it is an imperative.
Our insights
We believe that sustainable growth is the only way to build a successful business and have a lasting impact on our environment and society. That is why we have listed the key insights for you below.
Corporate Sustainability Reporting Directive
On the 21st of April 2021, the EU commission announced the adoption of the Corporate Sustainability Reporting Directive (CSRD) in line with the commitment made under the European Green Deal. The CSRD will amend the existing Non-Financial Reporting Directive (NFRD) and will substantially increase reporting requirements on the companies falling within its scope in its efforts to expand the sustainability information for users.
The proposed directive will also entail a dramatic increase in the number of companies subject to the EU sustainability reporting requirements. The NFRD that is currently in place for reporting on sustainability information, covers approximately 11,700 companies and groups across the EU. The CSRD is expected to increase the number of firms subject to EU sustainability reporting requirements to approximately 49,000.
ESG Reporting & Assurance
Organizations are facing a growing demand for clear and transparent reporting on their ESG strategy, commitments and performance. We see pressure increasing from both external stakeholders but also from within organizations. Investors, suppliers, customers, employees and other stakeholders request more transparency on the ESG impact of the businesses they work with.
Over the years, this has resulted in the use of a vast range of ESG targets and applied reporting frameworks, which can vary by sector, size and complexity of a business. This further increases the need for more comparable and transparent information, combined with assurance on ESG reporting, ultimately at the same level of financial reporting. In addition, also regulators and international standard setters (such as the ISSB and EFRAG) are moving into this direction. For the EU specifically, companies will be required by law to have limited assurance on ESG reporting in their annual reports by 2023, as part of the CSRD legislation.
ESG Strategy & Transformation
Your stakeholders – from investors to employees – now expect you to do the right thing. What is your impact on the planet and what is its impact on you? How do you consider and work with the communities you operate in? Are you well governed beyond just complying with the Dutch Corporate Governance Code?
ESG is now a top priority for the C-suite. Cost of inaction could be potentially high, both financially and reputationally. It could mean you lose out on your competitive advantage, miss out on opportunities to expand into new markets or segments, or attract regulatory scrutiny.
But what opportunities can ESG bring to your business? How can you turn ESG risks into commercial avenues for the business? How do you drive the necessary change to your operations, working practices and behaviors? How do you become a sustainable business when the environment you operate in is changing so fast?
ESG Data & Technology
Unreliable sustainability data poses the risk of severe consequences, including reputational damage for both the company and responsible directors, along with potential legal ramifications linked to inaccurate reporting or perceived greenwashing.
To meet both external and internal ESG reporting requirements effectively, a tailored Technology & Data solution is necessary. It will not only streamlines the management of diverse ESG data sources, but also enhances accuracy and transparency in reporting. By embracing technology-driven approaches, organizations can unlock the full potential of their ESG initiatives, fostering a sustainable and data-driven future.
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