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In recent years, concern for Sustainability has increased significantly, exerting external pressure on companies. This movement is driven not only by the investment community's interest in financial products aligned with environmental, social, and governance aspects (better known as ESG) but also by society's growing awareness regarding the opportunities and challenges that Sustainability represents.
This movement, alongside European regulation that has intensified over the last year, has generated the need to present sustainability reports, which are essential to demonstrate organisations' commitment to responsible practices. In this article, we address sustainability reports, applicable legislation, and advantages for companies.
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It is a report containing the information necessary to understand the company's impact on Sustainability issues, as well as the information necessary to understand how Sustainability issues affect the company's development, performance, and position.
The most relevant applicable legislation regarding Sustainability reporting, in the European context, is as follows:
The companies covered by Sustainability reporting are as follows:
2025 (reporting on 2024): Large public-interest entities, already covered by the NFRD;
2026 (reporting on 2025): Large EU companies (listed and non-listed) and large non-EU companies on an EU regulated market that meet two of the following criteria:
2027 (reporting on 2026): SMEs listed on EU regulated markets.
2029 (reporting on 2028): Companies from third countries to the EU with:
SMEs that do not fall under the criteria indicated above are not required to report; however, their value chain (e.g., Clients) may require the demonstration of Sustainability.
Sustainability reporting, or the sustainability statement, according to Delegated Regulation (EU) 2023/2772 (19/07/2024), must contain the following information:
This information is described and detailed in the topical standards (Environment: standards E1 to E5; Social: S1 to S4; Governance: G1) contained in Delegated Regulation (EU) 2023/2772 (19/07/2024).
These three major themes have been abbreviated using the acronym ESG (Environment, Social, and Governance).
A good Sustainability statement can improve a company's access to financial capital. It can also help companies identify and manage their own risks and opportunities related to Sustainability issues, provide a basis for better dialogue and communication between companies and stakeholders, and help companies improve their reputation.
Environmental Engineer with over 20 years of experience in Management Systems, namely in the implementation, auditing, and training on ISO 9001 and 14001 standards, and with participation in pioneering environmental certification projects. She holds a Master's in Lean Management and an MBA in Operations Management, standing out for her work on productivity improvement projects in various sectors. Her mission is to support SMEs in adapting to sustainability requirements, helping them overcome current challenges in ESG aspects.
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Last update: 22 October 2024
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