The Field of Corporate Responsibility is in Transition – What is Being Discussed Now?

Recently, I’ve had the opportunity to discuss these topics with many different companies and experts. Based on these conversations, I’ve compiled some of my own thoughts below.

The Corporate Sustainability Reporting Directive (CSRD) Raises Mixed Feelings

Many companies are aware of the EU’s Corporate Sustainability Reporting Directive (CSRD) and its standards (ESRS) coming into force. Simply put, the CSRD outlines a timeline, while the ESRS standards provide common guidelines for corporate sustainability reporting. With the directive’s implementation, the term “corporate responsibility reporting” will be replaced with “corporate sustainability reporting.” In some companies, this change causes a bit of “panic,” whereas in others, the reporting process is considered to be relatively straightforward. I would advise following a middle path – there is no need for panic, but it is essential to prepare well in advance with adequate resources. Now is the time to identify your company’s key sustainability perspectives and think about how to make data collection as simple as possible.

The EU Taxonomy is a Complex Framework

EU taxonomy reporting goes hand in hand with sustainability reporting. Did you know that when the CSRD comes into effect, companies will also have to report on their taxonomy? The EU taxonomy is a classification system that defines certain criteria for corporate sustainability efforts, especially from an environmental perspective. While sustainability reporting explains various aspects, the EU taxonomy measures compliance with specific criteria through a percentage-based assessment.

The EU taxonomy seems to be very confusing for many, as the criteria to be met vary by industry, and new industries and criteria are constantly being added to the classification system. Attention is often focused on environmental criteria, while minimum social criteria receive less focus. Did you know that you are required to have a Code of Conduct or a Supplier Code of Conduct in place? And have you identified and assessed the social risks of your operations?

Impact Work is on the Rise

When I started working in the field of corporate responsibility nearly eight years ago, many companies gained a competitive edge over others by identifying and systematically reducing the harmful environmental and human rights impacts of their operations. Today, this so-called traditional ESG responsibility is already “mandatory,” and gaining a competitive edge has taken a new form. Today, competitive advantage comes from the impact of companies.

By impact, I mean when a company identifies the added value its business creates for the environment, society, and people (some refer to this as a “handprint”). In the best-case scenario, this leads the company to develop new, distinct business approaches that consider sustainability perspectives, creating a clear competitive edge over others. The challenge lies in making impact work concrete and understandable, and this is what we are currently working on together with pioneering companies.

I would gladly elaborate more on the themes outlined above, but step by step. So, stay tuned for our future blogs to stay up to date on the latest developments and steps in promoting sustainability in your company!