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Sustainability report – What is it and what do I need to know?
Some are intrinsically motivated to anchor the topic of ESG in the company, others have to deal with the topic of sustainability reporting due to the CSRD or want to gain a competitive advantage. For all of them, the sustainability report is a constant companion on their ESG journey. Here you will find an overview of the most important terms and requirements for reporting.
What is a sustainability report?
This fundamental question needs to be clarified first and foremost.
In their sustainability report, companies make statements on
- environmental aspects,
- social issues and
- Corporate governance.
In the sustainability report, companies state how external influences affect the company and how their activities impact the environment and society.
The first report usually depicts the status quo.
But the information should go beyond this: Strategies, goals and measures that are intended to contribute to greater sustainability are also described.
The length, structure and focus of sustainability reports can vary greatly.
This depends on the standard you choose.
The method you use to report is basically up to you.
Unless you are required to report, for example by the CSRD.
Then you must follow specific guidelines and often certain standards (e.g. the ESRS).
Sustainability, ESG, CSR: what’s the difference?
All three terms basically mean the same thing in relation to the report.
They deal with fundamental questions of corporate responsibility towards the environment and society, today and in the future.
In recent years, the term CSR has been used primarily in Germany.
- Corporate social responsibility describes the responsibility of companies for their impact on society.
- However, the term was generally used for all three dimensions of sustainability (environmental, social and corporate governance).
- It is more about a qualitative measurement of measures with regard to sustainability, corporate values and social commitment.
In the meantime, the term ESG has become increasingly established.
- ESG stands for Environmental, Social and Governance.
- The term originates from the financial sector and focuses increasingly on company valuation, taking into account environmental, social and corporate governance factors.
- The measurement of sustainability follows a more quantitative approach.
The comprehensive term sustainability is basically used synonymously for CSR and ESG.
It is also quite apt for describing the report, as it covers sustainability in all areas of the company.
Read more about this in our blog post “CSR, ESG, sustainability – what’s the difference?”
When do I have to prepare the first sustainability report?
In the coming years, the new CSRD (Corporate Sustainability Reporting Directive) reporting obligation will require more and more companies to prepare a sustainability report.
Although the first report is usually a lot of work and often contains few statements on developments, we would still advise you to be blunt: Start now!
The facts in brief:
- Around 500 companies in Germany are currently obliged to publish a sustainability report.
- With the CSRD, there will be around 15,000 companies in Germany in future.
The criteria are the number of employees, sales revenue and balance sheet total.
In our blog post “EU adopts CSRD: What you need to know now“, you can quickly find out whether and when your company is required to report.
How do I create a sustainability report?
The first sustainability report is challenging.
You are probably doing this for the very first time and therefore have little experience – you can receive helpful training at the VERSO Academy, for example.
You also have often no comparative values, no suitable processes and structures yet and have to find the right reporting software – from our customer experience, we could go on and on with the list of challenges for the first report.
We therefore have 5 tips for your first report.
Companies that are faced with the task of preparing a sustainability report for the first time often ask themselves: Where should I start and what is the most efficient way to organize the process?
We have created the practice-oriented guide“In 7 steps to the CSR report“.
You will be guided step by step through the process of creating a meaningful sustainability report.
I am new to the role of ESG Manager:r…
How do I establish sustainability management in my company?
If you are new to ESG, this will sound familiar: You have a lot of measures in mind, but you need to integrate them into a goal-oriented sustainability strategy.
You have to think about which goals are realistic and sensible for your company.
You also need processes and key figures to monitor developments.
And above all of this are three big questions:
- What does all this mean for my company?
- How do I tackle this huge issue?
- How do I justify my efforts and the necessary resources to management?
First of all, basic blog posts on the topic of sustainability management will help you here.
You will learn more about your role and tasks as a sustainability officer and receive tips on how to communicate convincingly with management about why sustainability is important for companies.
CSRD, SFDR, EU taxonomy: what is it and what is the background?
With all the regulations, you have probably already come across the terms CSRD, SFDR, EU taxonomy and ESRS.
They are all part of the European Green Deal and are interlinked.
The EU wants to anchor sustainability more firmly in the economy with these regulations and directives.
To comply with the CSRD, companies are obliged to report in accordance with the “ESRS” standards specified by the EU.
How do I apply the standard correctly?
Do GRI or DNK also cover these requirements?
You can find answers to these questions in our ESRS white paper.
The SFDR is a sustainability-related disclosure requirement for the financial services sector.
We explain when you are affected and what you need to do in the SFDR factsheet.
The EU taxonomy is a classification system that CSRD and SFDR apply.
It defines when a business activity is green, sustainable or environmentally friendly in order to provide clarity on sustainability claims.
Find out what this classification of economic activities means for your company and your sustainability work in our white paper on the EU Taxonomy.
How can I make my company more sustainable?
Start taking action now!
The more you can tell about (implemented) measures in your report, the more meaningful your sustainability report will be.
Here are a few tips for good sustainability measures for companies.
Communicate your sustainability journey right from the start and show your need for action.
This makes your ambitions comprehensible and credible.
But be careful not to fall into these greenwashing traps in your sustainability communication.
Not only will this damage your reputation, but the EU is now also imposing specific anti-greenwashing regulations.
We can help you with your sustainability report!
Creating a sustainability report is a major challenge, especially the first time around.
However, with the right tools and extensive knowledge, you can save a lot of time and money.
We have the right solution for both.
With our training courses, you can gain new input and become a sustainability professional.
And with our ESG management software , you can collect all relevant sustainability data quickly and clearly.
* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.
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