It is becoming obvious that ESG should be the core of the company's strategy and shape the narrative around the organization's goal. Every aspect of the business is now assessed – how employees are treated, what the supply chain looks like, how data is used and managed, and how the business affects the environment. It is already clear that having a clearly defined goal and creating a positive impact on the planet and people counts like never before.
What is ESG and why is it so important today?
ESG is an acronym for Environmental, Social, and Governance issues in an organization's business model. It reflects the evolution of understanding the responsibility of institutions, including businesses, for their environment.
Unlike the previous stage of development of this concept – CSR (Corporate Social Responsibility) – regulatory obligations covering company's core business activities play a much greater role than voluntary philanthropic activities. This means that a strategic approach to ESG issues is shifting from “nice to have” to “must have” for those who want to operate in the business market.
Challenges in addressing ESG issues
The biggest incentive for companies to take an interest in their environmental responsibility today is regulation, particularly that implemented at the European Union level around the European Green Deal strategy. In terms of reporting obligations, these include the Corporate Sustainability Reporting Directive (CSRD) and the accompanying set of European Sustainability Reporting Standards (ESRS) indicators.
This is not the only factor that drives businesses to consult their stakeholders and examine their impact on value chains. Companies also seek to minimize the risks (financial penalties or reputational damage) associated with making ambitious environmental claims that are not backed up by reality. Risk mitigation may also apply to issues such as human rights compliance (an important topic in the context of the CSDDD) or combating deforestation (EUDR).
Benefits of implementing ESG measures
For market leaders, sustainability is seen as an opportunity to change their business models so that they are ready to compete in the new green and digital economy. In recent years, more and more companies have declared their own voluntary targets for reducing greenhouse gas emissions or implementing circular economy principles.
Declarations regarding ESG activities, as well as disclosures contained in sustainability reports, are becoming a valuable source of knowledge for financial institutions deciding on the allocation of investment funds. They also help to build credibility among consumers, creating an image of a responsible company and an attractive employer.
ESG is more than just a score
ESG indicators are becoming increasingly important to investors and can determine the future of a company. However, it is important to remember that indicators are only a result of what a company does and how it operates. Disclosed data and its transparency are crucial for capturing a business's commitment to ESG and proving its resilience and sustainability to stakeholders.
How can we help?
Financial materiality and impact assessment taking into account ESRS standards criteria.
Sustainability disclosures in accordance with standards and regulatory requirements.
ESG integration, management, and reporting in financial institutions.
Identification of key sustainability factors and analysis of company maturity.
Cooperation with the company's environment to enable better implementation of sustainability principles.
Advisory services for public and private companies, focusing on ESG risks and opportunities.
Development and building of company value based on goals that take into account sustainability factors.
Examination of environmental communication risks in terms of compliance with Polish and EU law.
The VSME standard creates new opportunities for proactive companies in the SME sector.
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