ESG reporting – an obligation or a strategic investment in the future of the company?
Companies often question whether it makes sense to engage in ESG reporting, particularly in the context of potential changes in EU regulation. However, it is important to stress that ESG goes beyond legal requirements as a strategy for building a strong, resilient and competitive business.
ESG reporting should not be seen simply as a bureaucratic obligation. This approach promotes long-term sustainability, increases transparency and enhances the market value of the company. Even in the event of regulatory changes, companies that implement good ESG practices will be better prepared for future challenges. This is important in the context of ESG reporting.
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ESG - what is it?
The acronym ESG (Environmental, Social, Governance = environment, society, corporate governance) made its debut in 2004 in the ‘Who Cares Wins’ report from the United Nations Global Compact, highlighting the financial benefits of companies and investors taking these factors into account.
The concept is a continuation of CSR – except that CSR is based on voluntary actions, such as philanthropy and self-regulation, that aim to positively impact the business environment – customers, employees and local communities. ESG transforms abstract ideas of CSR into concrete, comparable data, enabling an accurate assessment of corporate social responsibility. It introduces measurable indicators to assess the actions of corporations. With ESG, investors and consumers can analyse specific aspects of companies’ performance, such as employee management, supply chain, response to climate change, diversity and community relations.
ESG is used to assess companies’ commitment and performance in the area of sustainability, encompassing risk analysis and ratings. It is based on international standards such as the UN 2030 Sustainable Development Goals and OECD guidelines, and is divided into three main areas: environment (impact on nature), society (stakeholder relations) and corporate governance (governance structure and ethics).
ESG has become a key element in the evaluation of companies by investors, customers and employees who expect a responsible approach to business. It is seen as the basis for sustainable growth and long-term corporate value.
CSRD in the context of ESG reporting
The CSRD (Corporate Sustainability Reporting Directive) is an EU regulation that introduces new standards for ESG reporting by companies. Its main objective is to increase the transparency and comparability of sustainability data. The directive expands existing reporting obligations by requiring a wider range of companies to disclose information about their environmental, social and corporate governance impacts. The CSRD aims to standardise and improve the quality of ESG data, making it easier for investors, customers and other stakeholders to assess the sustainability of companies’ activities.
The CSRD was adopted by the European Union on 14 December 2022. It entered into force on 5 January 2023, and EU member states had until 6 July 2024 to implement its provisions into their national legal orders.
Why is it important to report ESG?
Investors and clients are increasingly looking at the ESG report
An ESG-conscious approach attracts investors and clients. Companies with high ESG scores have better access to capital, enjoy greater trust and are seen as more resilient to crises. Clients, especially corporate and international clients, are more likely to expect suppliers to transparently report their sustainability efforts. Financial and insurance institutions are particularly attentive to these aspects in their investment decisions.
Attracting and retaining talent
Employees, especially from younger generations, expect employers to be committed to sustainability issues. Transparent ESG reporting builds a strong employer brand, attracting the best professionals and increasing their loyalty. Workplace safety and conditions are key elements in ESG.
Improved access to finance and competitive advantage
Financial institutions make financing conditions dependent on companies’ ESG performance. An ESG report provides better credit conditions and access to sustainability-focused investment funds. This is particularly important for large and medium-sized companies, which often rely on external financing.
ESG as an impulse for innovation
A conscious approach to ESG not only minimises a company’s negative impact on the environment, but also opens the door to innovative business opportunities. Optimising resource consumption, by implementing more efficient technologies and processes, can lead to significant operational cost savings. Reducing greenhouse gas emissions, for example by investing in renewable energy sources or modernising the vehicle fleet, not only supports the fight against climate change, but also improves the company’s image in the eyes of customers and investors.
Efficient waste management, including recycling and waste minimisation, can turn waste streams into valuable secondary raw materials. Improving working conditions, by investing in health and safety and employee development, increases the productivity and loyalty of the workforce. These measures, while aimed at protecting the environment and supporting local communities, simultaneously increase the operational efficiency of the company, which translates into real financial benefits.
How do you start the sustainability reporting process?
Reporting ESG in accordance with the ESRS (European Sustainability Reporting Standards) may seem challenging, but a well-planned process will help you successfully implement the requirements of the CSRD.
Build awareness within the organisation – educate employees and management about sustainability, CSRD regulations and the importance of ESG to the company.
Create a team of ESG ambassadors – appoint key employees from different departments to support the reporting process and ensure consistency across the organisation.
Once you have identified topics of relevance, carry out a double materiality analysis process in line with the ESRS indicators, which will allow you to create a draft report. Don’t forget that the report should be verified by an external auditor. After conducting the double materiality analysis, analyse how your organisation has reported non-financial data to date and identify areas for improvement. Based on this, develop an action plan, taking into account the necessary changes to your processes, reporting and corporate strategy
Who is obliged to report ESG?
The obligation to report ESG, in accordance with the CSRD, according to the current regulations, is gradually being extended to a wider range of companies. Here is how the timetable for the implementation of these regulations presents itself:
From 2024:
The reporting obligation applies to large entities that are so-called public interest companies with more than 500 employees.
From 2025:
The obligation will cover all large entities that meet at least two of the following three criteria:
Employment of more than 250 employees.
Annual revenues exceeding €40 million.
Total assets exceeding €20 million.
From 2026:
The reporting obligation will be extended to listed small and medium-sized enterprises (SMEs), with voluntary reporting for other SMEs.
From 2028:
The reporting obligation will also extend to companies outside the European Union with significant activities within the European Union.
It is worth noting that the exact criteria and deadlines may be subject to further changes as a result of the Omnibus project, which was proposed in February 2025. It proposes new regulations according to which selected companies will be obliged to report on sustainability, but in a simplified manner.
ESG report and regulatory changes
The results of the Workiva survey send a strong signal to Polish companies, which may be hesitant about the wisdom of investing in sustainability reporting. The data shows that even in the face of potential legislative changes, the majority of companies worldwide (85%) declare to maintain their plans in this area. What’s more, up to 77% of executives say that potential regulatory changes will not affect their existing operations.
These statistics underline that ESG reporting is becoming a standard in business, regardless of current regulations. Companies recognise the long-term benefits of transparency and responsibility, such as building trust with investors, customers and employees, as well as strengthening their position in the market.
For Polish companies that are only just considering the implementation of ESG practices, the results of the Workiva study should inspire action. They show that investments in sustainability are seen as strategic and not just a legal requirement. It is therefore worth taking steps towards ESG reporting now, in order to prepare for future challenges and to take advantage of the opportunities that responsible business brings.
ESG reporting obligation and numerous benefits
In my opinion, it is ESG reporting that can be a real driver for innovation in companies. Observing the dynamics of Polish companies in recent years, we see that the transparency of energy and fuel consumption data, enforced by sustainability reporting, is leading to real competition in energy efficiency. It’s a bit like healthy competition, which works out for everyone. What’s more, thanks to ESG reports, companies often analyse their emissions data in detail for the first time. And what do they find? It’s not uncommon to find areas where significant savings can be made. This is not only good for the environment, but also for the company’s wallet. Remember, there is no room for empty platitudes in ESG reports – what counts are hard facts, figures and concrete strategies that companies will be held accountable for. ESG should not be treated just as an idea, but as a solid dose of company knowledge. In summary, ESG is not obligations and reports, it is a concrete strategy that helps companies become more innovative and efficient.
Aga Maciejowska, CEO Plan Be Eco
When talking about ESG, we should not only talk in the context of preparing a report, but primarily from the point of view of putting into practice the strategic provisions from all three ESG areas. As an example – it is not enough to provide data on the size of the carbon footprint – it is good practice to indicate by which year and how the company intends to reduce its emissions. Stakeholders no longer just read the information in the report, but say ‘check’ and ask for clarification if any indicator raises concerns.
Today’s organisations that have taken up the ESG challenge are opening up new business opportunities, including building long-term relationships with stakeholders, easier access to investment finance and proactive management of business risks, which is extremely valuable information for investors and banking and insurance institutions.
Lack of ESG reporting and the consequences for the company – read the article
Summary
ESG reporting, beyond regulatory requirements, is becoming a key strategy for building a resilient, transparent and modern company. Even in the face of potential regulatory changes, organisations that consistently implement ESG standards gain an advantage by preparing for future challenges. It is worth noting that the European Commission and the European Union place great emphasis on corporate sustainability reporting, confirming the long-term trend towards responsible business.
For companies that are not yet subject to mandatory reporting, the implementation of European reporting standards and other reporting standards becomes a voluntary investment in the future. Analysing a company’s environmental impact and operations in the context of ESG, including the reduction of greenhouse gas emissions, identifies areas for optimisation and innovation. Involving key stakeholders and local communities in social responsibility activities builds trust and strengthens relationships, which translates into long-term value for the company.
In a business context, ESG reporting allows companies to better understand their impact on their environment and identify sustainability opportunities. Even small and medium-sized companies can benefit from voluntary reporting, building their reputation and attracting informed customers and investors.
In summary, ESG reporting, irrespective of the legal obligation, is a valuable strategy for companies that want to build sustainable value, trust and innovation while contributing to sustainable development.
Plan Be Eco supports companies in ESG reporting
In the ESG reporting process, expert support is crucial to help companies understand the complex requirements and implement effective strategies. Plan Be Eco offers comprehensive ESG reporting support, including double materiality reporting, the due diligence process, carbon footprint counting and decarbonisation, providing companies with the tools and knowledge needed to prepare reliable and compliant reports. Our specialists will help analyse data, identify key indicators and develop a sustainability strategy, enabling companies to not only meet regulatory requirements, but also build lasting value and trust with stakeholders.
