The ESG Call-To-Action
February 21, 2023
Table of Contents
ESG is the new business acronym of the moment, used by more and more CEOs and entrepreneurs in Europe and beyond. The E stands for Environment; The company’s contribution to eradicate climate change and the impact on the environment. The S stands for Social; The company’s respect for human rights as well as its relationship with the community. The G stands for Governance; The company’s leadership strategy, ethical management, policies, and processes in place.
Why is important?
The focus on ESG is driven by the need to transition to a world that is climate neutral by 2050, the business opportunities and risks this brings and by regulatory pressures from the EU and other policy makers. A key piece of legislation that was adopted by the EU at end the end of 2022 is the Corporate Sustainability Reporting Directive (CSRD). Just like for other policy areas in the past the EU sets the de facto global standard other regions and countries follow. What GDPR has become for data privacy, CSRD is expected to become for sustainability reporting. Failure to comply will mean big fines for large companies that will be obliged to submit their annual ESG reports starting with their fiscal year 2024.
Who will be affected by these measures?
This will not only affect large companies, meeting 2 or more of the following 3 criteria; having more than 250 employees, more than 40 million Euros turnover or more than 20 million Euros total assets. By 2028 companies of all sizes will be required to report their ESG impact. Starting in 2024 and in many cases today smaller companies will be asked by their clients and stakeholders about their ESG data already. A key part of CSRD is the requirement for companies to report not only on their own direct ESG impact but on the impact of their entire value chain, their so-called Scope 3. This includes many smaller companies and represents on average between 75% and 80% of their total impact.
So, time to get started today!
How to find out more about it?
CONNECTS, together with partners Grant Thornton Belgium and BECI, the Brussels Chamber of Commerce have launched the ESG Countdown community in which we run a series of 10 webinars to help companies go through all the steps that will help them prepare their first ESG report: The ESG journey. On the 14th of February we will be running the 6th webinar, a deep dive into Governance Materiality. Every webinar is a mix of theory and testimonials from companies that have already started their ESG journey. At the end of each session there is ample time for participants to ask questions to the speakers and ESG experts. The video recordings and copies of the presentations of the previous 5 steps in the ESG journey can be found in the ESG Countdown community libraries. Click the link to join the ESG Countdown community and sign up for our next webinar.