ESG is getting more and more popular nowadays. EU regulations and the obligations arising from them, as well as growing awareness among the public, are forcing companies to take action in the field of sustainable development. With our new series of articles #Go4ESG, we want to educate, inform and encourage interesting in ESG topic. Today’s first entry is about the benefits of non-financial reporting. The next one is going to be published next month!
ESG reporting – why is it worth making? As EU regulations tighten and stakeholder expectations grow, more and more entities will be required to file non-financial reports. In addition, ESG reports play an increasingly important role in the investment process, which may give reporting companies an edge in the market.
The current NFRD introduced mandatory reporting in 2014 for the largest companies meeting a minimum of 2 requirements out of 3:
- above 500 employees,
- more than PLN 85 million in financial total or
- 170 million in net revenue.
The European Union is expanding this obligation and it will soon affect more organisations. Therefore, now even if your company is not obliged to report non-financially, this may soon change.
The new EU CSRD introduces reporting obligations from 2025 for:
- listed companies,
- large companies meeting at least 2 of the 3 requirements: 20 million EUR balance sheet total, 40 million EUR net turnover, 250 employees.
The first CSRD-compliant reports are due to be published in 2025 for 2024, but it is worth preparing earlier for this obligation and starting to collect the necessary data.
After the 2026 financial year, small and medium-sized listed companies will also be required to file ESG reports.
Earlier preparation will therefore give the company an advantage in the market:
Higher Investment returns
Investments that emphasise ESG aspects lead to higher returns (according to a study by the Association of Investment Companies).
Meeting customer expectations
Employees and customers increasingly prefer sustainable companies, but 49% of consumers say that companies do not provide enough information to verify their environmental policies. Non-financial reporting provides consumers with clear and readable information about an organisation’s ESG performance.
Attracting investors
Environmentally sustainable investments and products are more secure in the long term, due to the strong trend and increased environmental funding in the European Union – 37% of the EU’s Reconstruction Fund (€750bn) is dedicated to climate protection and the EU will allocate 30% of its budget to funding the European Green Deal.
What can Go4Energy do for you?
First, we offer our clients support with their sustainability business ideas by:
- developing a sustainability strategy tailored to the specific client
- identifying and verifying the indicators required for your industry in the EU Taxonomy in order to confirm the sustainability of your investment according to EU requirements for both existing and new buildings
- analysis of environmental indicators, indicating ways of improving them (e.g. improving energy efficiency of buildings)
- preparation of a strategy to achieve climate neutrality for the company;
- analysis of the impact of BREEAM, LEED and WELL certification on the taxonomy
- advice on EU climate change regulations
If you need support in the reporting process, we invite you to contact us. Our experts will provide your organisation with expert advice and support at every stage of the process.