Sustainability Reporting

Which companies should start reporting on sustainability?

Whether you are the director of a small business or the CEO of a multinational enterprise, it’s likely that new regulations and ESG disclosure requirements will impact you.

Roughly all European companies with over 250 employees are within scope of the Corporate Sustainability Reporting Directive (CSRD). The CSRD will become effective as of January 1, 2024. Similarly, capital providers, such as banks and institutional investors, will need to comply with new sustainability reporting requirements under new European legislation for financial market participants. This means companies will need to collect detailed sustainability information from their supply chain partners as well.

Even small businesses will probably need to respond to sustainability reporting needs from their larger B2B customers, their banks or investment partners.

The impact of these new regulations will reach beyond the European Union. Companies doing business with organisations in Europe will need to report on sustainability metrics too.

How will sustainability reporting help your business?

CFOs and sustainability officers are faced with a dilemma: how can they comply with new sustainability reporting regulations in an efficient way? Unlike financial data, sustainability data is often unstructured and of lower quality. System integrity needs to improve; companies need to move beyond the use of spreadsheets and email.

Sustainability data needs to be as accurate as financial data. To attain this accuracy, internal outreach and collaboration between business controllers, sustainability managers and supply chain managers is paramount. This helps to break down internal silos and facilitate information transfer. A powerful consequence of enhanced sustainability disclosure is that more useful steering information becomes accessible to improve management decisions as well. Better sustainability disclosures can help you:

Position your company with investors
Drive value creation with more sustainable products
Improve your brand’s value proposition

Quality of sustainability data

The quality of sustainability data begins with your subsidiaries and supply chain partners. Data validation, the quality of your processes, system integrity and security determine its maturity level.
Sustainability data needs to be reliable, comparable and standardised. Only then can it be used by your business partners and capital providers.
Don’t compromise on quality. Work with well-established vendors that have a proven track record to achieve the next level in sustainability reporting