ESG (environmental, social, and governance) certification is appearing to be one of the most important requirements these days. Concern for sustainable development is becoming extremely important, it’s becoming a measure of success (and measure of the success is going beyond just financial results). More governments, investors, counterparties, and even consumers started to demand that every business or company act responsibly to help address challenges like global warming, the loss of biodiversity, etc., but also social ones. The new generation of consumers and employees do pay attention whether they buy goods or work in an organization that is socially responsible, and simply ethical. We, as consumers, started checking the brands before we buy anything on ethical and social criteria, e.g. whether they have a business in russia, whether they use child labor, we started paying more attention to buying recycling goods, etc. And as soon as more ESG data is available the more it’ll define our buying behavior.
This responsibility is demonstrated through ESG certification. ESG data collection and reporting is the first step of a company’s ESG journey. The certification means that the organization is moving to and driving sustainable practices to reduce its impact on the environment and society.
In the EU, large companies must disclose ESG information under the Non-Financial Reporting Directive (NFRD).
The NDRD applies to large public-interest companies with more than 500 employees, coveting approximately 11 700 large companies and groups across the EU, including:
- listed companies
- insurance companies
- other companies designated by national authorities as public interest entities.
From 2023 the scope is extended and approximately 50.000 companies in the EU, corresponding to 75% of the EU’s companies’ turnover, which are obliged to mandatory ESG reporting. SMEs will be next.
Technically, ESG certification is a 3rd party verification system used to measure a company’s key sustainability initiatives.
On that matter, we partner with CRIF Poland, who provided their Synesgy platform to proceed with our first ESG certificate.
ESG certification (scoring) determines the company’s level of compliance with environmental, social, and corporate governance factors, also taking into account the sector and geographical area.
How to get prepared for ESG Certification:
- First of all, you should prepare your data (costs spent) on electricity, water, waste, etc, for the previous year (the scoring is done on an annual basis). At the moment input of such data to the platform is manual.
- Adopting of ESG strategy and publishing it officially on the company’s website clear the objectives and show your first steps towards sustainability.
- Devote the time to fulfill and analyze the data you input.
- As a result of certification, you receive an Action plan on how to achieve your ESG goals: cut down the carbon footprint, and work on the social aspects of organizations that can help advance the welfare of the community.
First ESG certificate gives a good starting point to analyze (and start thinking on that on an ongoing basis) and set the list of actions needed to become a sustainable organization, which should result in your competitive advantage in the market.
Are you interested in learning more?
Watch the webinar “ESG: reporting, data management, and business potential”.