ESG reporting obligation
Environmental, Social and Governance: With ESG reporting, you disclose all relevant environmental, social and governance-related information. By documenting all your ESG activities, you make your company appear transparent and credible to investors, customers and other stakeholders. Read on if you are affected by the ESG reporting obligation.
Credibility from the ESG report
Use this approach effectively to show your target groups how serious you are about working towards the set targets and to show empty promises and greenwashing a definitive red card. ESG reporting is far more than just ecological sustainability:
Environment
Environmental
- Climate protection
- Emissions
- Adaptation to climate change
Natural resources
- Biodiversity and ecosystems
- Water and marine resources
Environmental pollution
- Resources and circular economy
- Energy
Social
Respect for human rights
Working conditions
- Health and safety at work and in production
- Diversity and equal opportunities
- Pay equity and work-life balance
Product
- Product quality and safety
- Product liability and responsibility
Data protection and security
Governance
Business management
- Role, composition and compensation of management bodies
- Internal monitoring and risk management systems
Corporate behaviour
- Company ethics
- Anti-corruption
- Free competition
- Sustainable finance
Stakeholder management
- Relationships with business partners
- Social dialogue
- Political dialogue
The ESG report: Formal, time-related and legal frameworks
In the future, the required ESG information should be published in a machine-readable format in the management report of a company’s annual report. According to the ESG reporting obligation, this report must be released no more than four months after the end of the financial year.
The European Financial Reporting Advisory Group (EFRAG) is currently developing the uniform EU reporting standard, which you will need to comply with when creating your ESG report.
The current proposal of the European Commission also includes an obligation to have the information externally audited, initially with limited assurance. The audit should check:
- Compliance with the reporting standard
- The process carried out to identify the information reported
- Key figures and indicators
- Mark-up in accordance with the requirements of the electronic reporting format
According to the current plan, failure to fulfil the ESG reporting obligation will result in a criminal investigation.