Sustainability reporting is not a new concept, but it has gained more attention and importance in recent years. The European Commission has proposed a new Corporate Sustainability Reporting Directive (CSRD) that will require all large and listed companies, as well as some SMEs, to report on their sustainability performance in a consistent and comparable way. The CSRD will also introduce a set of European Sustainability Reporting Standards (ESRS) that will define the content and format of the sustainability reports.
But why should you care about reporting on sustainability performance in line with ESRS? What are the benefits for your company and your stakeholders? Here are some of the main reasons why you should embrace this new reporting framework:
- Streamlining and transparency: Reporting in accordance with ESRS will help you to simplify and harmonize your reporting process, reducing the burden of complying with different national and sectoral requirements. It will also increase the transparency and reliability of your sustainability information, making it easier for your external stakeholders, whether those are investors or consumers, to understand and evaluate your performance.
- Enhanced credibility and comparability: Reporting in accordance with ESRS will also give you the opportunity to showcase your sustainability achievements and demonstrate your commitment to the EU’s policy objectives in the context of the European Green Deal. It will also enable you to compare your performance with your peers and benchmark yourself against best practices. This will enhance your credibility and reputation in the market and attract external investment.
- Risk and opportunity management: Reporting on sustainability issues will also help you to identify and disclose the financial risks and opportunities arising from climate change and other environmental, social, and governance factors . This will enable you to manage these risks and opportunities effectively and align your strategy with the longterm interests of your stakeholders . It will also allow you to measure and communicate your impact on people and the environment, and contribute to the sustainable development goals.
As you can see, reporting on sustainability performance in line with ESRS is not only a legal obligation, but also a strategic advantage for your company. It will help you to improve your sustainability performance, increase your stakeholder engagement, and create value for your business and society. So don’t wait any longer, start preparing for the CSRD and ESRS today!