Sectors
Companies are expected to take responsibility for the climate and society. They should not only focus on profitability, but they should also map out the impact of their business on society. As part of this, new (European) legislation has been adopted: ESG legislation. ESG stands for: environmental, social, governance.
As of this year, large companies must comply with new ESG legislation. This legislation includes (among others):
The CSRD requires companies to include ESG reporting in their financial statements. Companies must report on the effects of their business operations on the environment and society. This involves the entire value chain. In addition, the company must also report on what impact, risks and opportunities the ESG topics have on the company.
Sustainability reporting must comply with the ESRS. The ESRS contains rules and guidance for framing and disclosing the sustainability report. It is up to the company to perform a double materiality assessment: an assessment of the company’s impact on the environment, as well as the impact of the environment on the company. This identifies which sustainability issues are important to the company and its stakeholders. This analysis requires the right expertise.
The ESRS consists of twelve standards. The first two are general-tempered and contain basic principles. These basic principles contain rules on reporting on strategy, governance and decisions related to materiality. The remaining 10 standards cover various ESG themes, such as employees, climate change and pollution. ESRS reporting requirements vary by theme.
More and more (and also smaller) companies are required to report under the CSRD. The obligation to report under the new standards applies to:
Are you curious as to when the obligations apply to your company? Use the figure below to assess whether and from when the sustainability reporting obligations applies to your company:
The reporting requirements are comprehensive, far-reaching and complex. It is considered advisable to be well prepared for these reporting requirements, even if the CSRD does yet not apply to your company. The urgency to take responsibility for climate and society is reinforced not only by strict laws and regulations, but also by more critical consumer and investor behavior.
Are you in doubt whether your company is ready for these new obligations? Then it is considered advisable to seek advice.