ESG Reporting (Sustainability Reporting)

Companies or organisations implement ESG (the acronym of Environmental, Social, and Corporate Governance) to create added value for both the company and society.
The sustainable development strategy is a set of actions to develop and strengthen the business ESG pillars (environment, society and governance), based on the definition and monitoring of relevant sustainability indicators and information.

As part of its sustainability reporting (ESG Reporting), the company discloses this information on its ESG aspects’ impact, as well as its commitment and focus on a sustainable global economy.

On 5 January 2023, the European Union enacted the European Corporate Sustainability Reporting Directive (CSRD), replacing the Non-Financial Reporting Directive (NFRD).

The new Directive concerns:

• EU listed companies, including listed small and medium-sized enterprises (SMEs)
• Large companies that meet at least two of the following three criteria:
  
• Small and medium-sized companies with more than 250 employees during the year
• Balance sheet total of more than EUR 20 million
• More than EUR 40 million in net turnover
  
• Non-EU companies of at least EUR 150 million in net turnover and an EU subsidiary that meets the applicable criteria for EU companies or an EU branch of more than EUR 40 million in net turnover
• Small financial institutions

Companies should disclose their reports as follows:

• Organisations first reporting in 2025 (starting the financial year on 1 January 2024) already mandated to comply with the NFRD – Non-Financial Reporting Directive,
• Large listed undertakings fist reporting in 2026 (starting the financial year on 1 January 2025) not already mandated to comply with the NFRD with more than 250 employees,
• EU listed small and medium sized companies first reporting in 2027 (starting the financial year on 1 January 2026) and
• Non-EU companies with branches/subsidiaries in the EU,  first reporting in 2029 (starting in the financial year 2028).

ESG aspects:

Environment: the company’s impact on its natural environment, including resources’ use efficiency, respect for the environment and the burden caused

Society: the relationship management between the company and its stakeholders (customers, suppliers, employees, etc.) including social issues management (health and safety of employees, discrimination, human rights, etc.)

Corporate governance: issues related to the decision-making process, management practices and corporate governance structure (structure and size, executive/employee remuneration, risk management, transparency and corruption issues, etc.)

Benefits for the company developing sustainability reporting (ESG Reporting):

• Enhanced company’s reputation
• Enhanced company’s efficiency
• Competitive advantage
• Improved business sustainability
• Building trust with stakeholders
• Finding new funding sources
• European Union legislation (CSRD) compliance for listed companies

Role of IDEC S.A.

• Sustainability reporting (ESG Reporting) development
• Assessment of organisation’s current planning and infrastructure
• Identifying needs for the disclosure of non-financial indicators
• Conducting a materiality analysis of the company
• Support for data collection and indicators’ recording
• Consulting services to utilise structural and improvement opportunities