There is no way around sustainable action and sustainability reporting

Sustainability reporting is a relevant topic and will comprehensively and radically change business. Above all, the impending legal requirements for sustainability reporting aim to bring about a change in thinking and immediate action.

If companies want to remain competitive in the long term, they must take a hard look at the impact of their business on the environment and society. Customers, investors, consumers, and the public are increasingly paying attention to a sustainable business model. Today, companies are expected to take responsibility. They need to know the environmental and social impacts of their business model and manage both the risks and opportunities in the context of sustainability.

Sustainability is therefore not just a consumer trend. Sustainable business practices are now an important economic factor that will increasingly influence the long-term success of companies. Sustainability is thus becoming a business opportunity for companies in the necessary transformation process and should not be seen as a risk and reporting or regulatory burden only.

What does this mean for future reporting? The stakeholder and regulatory requirements for sustainability reporting and management are rapidly increasing. 

The European reporting requirements for capital market-oriented companies will be greatly expanded. In this context, the current draft stipulates that from the 2023 financial year, all large companies with 250 employees and or a turnover of more than 40 million are subject to reporting requirements. As of the 2026 business year, in a subsequent step, capital market-oriented small and medium-sized companies will be subject to reporting requirements. companies will be subject to reporting requirements. This obliges the companies to publish a sustainability report.

Small and medium-sized companies are thus faced with the challenge of dealing with the content and technical possibilities of sustainability reporting.

The growing demand for greater transparency has prompted the Global Reporting Initiative (GRI) to issue modified Universal Standards from 2023. GRI has revised the Universal Standards 2021 with the following objectives:

• Promoting more relevant and complete reporting
• Improvement to the consistent application
• Greater clarity on GRI concepts, reporting principles, and disclosures
• Improving the usability of the GRI Standards
• Clarify approaches to the application of and compliance with the GRI Standards
• Integration of human rights disclosures
• Integrate due diligence reporting

The Stakeholder Capitalism Metrics reporting standard for non-financial reporting initiated by the World Economic Forum International Business Council makes extensive use of GRI reporting standards and requirements. Effective 2023 companies can use our smart reporting solution Trusted.one Sustainability Central, to satisfy the disclosure requirements of their stakeholders and regulators.

European Commission >> Questions and Answers: Corporate Sustainability Reporting Directive proposal:
→ https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_1806

Cliffordchance >> ESG: European Commission Proposes corporate sustainability reporting directive
→ https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2021/05/esg-european-commission-proposes-corporate-sustainability-reporting-directive.pdf

Blog article written by: Sylke Bauerschmidt

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Peter Storm