ESG Reporting

“ESG reporting should be understood as an integral part of corporate operations!”

What is ESG reporting?

The acronym ESG stands for Environmental, Social, and Governance. It represents a company’s efforts in sustainability, social responsibility, and corporate governance. ESG reporting involves documenting relevant corporate data in a structured sustainability report.

Currently, companies are required to report on over 50 ESG-related indicators.

ESG criteria

Measurable ESG criteria are developed across three key areas, allowing assessment of a company’s sustainability performance.

Detailed guidelines and indicators are provided by the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-Related Financial Disclosures (TCFD).

Is ESG reporting mandatory?

Yes, ESG reporting is mandatory!

The European Union has adopted the Corporate Sustainability Reporting Directive (CSRD), mandating organizations to disclose not only financial data but also their environmental, social, and governance activities.

When does ESG reporting become mandatory?

Starting in 2024, all large publicly listed companies must comply with ESG reporting. By 2025, small and medium-sized enterprises (SMEs) must also comply if they have at least 250 employees and more than €40 million in net revenue or a balance sheet total exceeding €20 million.

From 2026 onwards, these reporting rules apply to all capital market-oriented companies, except micro-enterprises.

Start your ESG reporting now

By 2026, the CSRD requirements will apply to most companies in Germany. To be fully prepared, you should proactively address the requirements and clearly define internal responsibilities for data collection and report preparation. Gathering new metrics and implementing appropriate data solutions or reporting software tools will require significant preparation time.

Benefits of sustainable reporting

There are several reasons to start preparations early:

• Increased transparency: Clearly understand processes and resource use, enabling process improvements and optimizations.
• Competitive advantage: Demonstrate responsible and sustainable business practices, enhancing your organization's appeal to employees, business partners, and customers who increasingly value sustainability and transparency.

Our ESG recommendation for businesses

Being aware of your organization's impacts and transparently documenting them is essential for future-oriented companies. Rather than viewing ESG reporting as a burden, embrace it as an opportunity to establish economic and social metrics that positively influence your organization's growth and competitive advantage.