Mann im Anzug mit Fahrrad – Symbolbild für Nachhaltigkeit im Unternehmen

23.04.2024

Why is sustainability important for companies? Facts & Figures 2024

Sustainability is becoming increasingly important – not only for private individuals, but also for companies. This article shows why you should not regard sustainability as a mere compulsory exercise.

5 facts why sustainability is important for companies

ESG issues (environmental, social and governance) are playing an increasingly important role in business. And rightly so: sustainability and sustainable action bring many advantages to a company – as various surveys show. Sustainability is therefore important because:

it ensures the continued existence of the company
it ensures economic success in the future,
it increases employee motivation,
it strengthens customer loyalty to the company
and because it creates new jobs.

ESG has developed into a topic that has become increasingly important for both private households and companies. For companies, sustainability is no longer just a label that can be marketed nicely. In addition to ethical aspects, it also brings major economic benefits – for example in the recruitment of employees, customer loyalty and, as a result, greater economic success. However, in order to implement sustainability efforts in a targeted manner, companies should not just implement loose measures, but rather develop a sustainability strategy – with concrete goals, measures and key figures for monitoring.

Sustainability ensures economic success

Sustainability is no longer limited to sorting waste in the office, but has a strong influence on many fundamental sectors of a company. Therefore, switching to sustainable business practices can of course be time-consuming and cost-intensive. But the effort is worth it, as these four studies show:

95% of respondents to the Ramboll’s 2019 Sustainability Survey stated that ESG is an important factor for long-term economic success. The reason: consumers are increasingly buying regional and ecologically valuable products.
45 % of the KPMG 2022 CEO Outlook executives surveyed (globally) stated that ESG measures improve their company’s financial performance.
67 % of the Sustainability Monitor 2024 companies surveyed recognize added value in CSRD for the further development of the company.
55 % of the KPMG 2024 U.S. CEO Outlook executives surveyed expect to see a significant ROI from their ESG initiatives in the next three to five years.

Infografik: Studien, wie sich Nachhaltigkeit auf den wirtschaftlichen Erfolg von Unternehmen auswirkt

Sustainability secures the future of companies

However, ESG commitment not only ensures that the company is in a good financial position. It is becoming increasingly clear that the climate crisis and its consequences are becoming a real threat to established business models and that business as usual is no longer sustainable. Conversely, this means that sustainable transformation ensures the long-term survival of companies.

55 % of the Capgemini of the German companies surveyed recognize that something has to change: they consider climate change to be the main cause of future disruptions to operations.
61% of the managers surveyed worldwide in the same study are of the opinion that a lack of sustainability strategy will become an existential risk in the long term.

Infografik: Studien, wie Nachhaltigkeit die Zukunft von Unternehmen sichert

Stronger customer loyalty through sustainable business practices

Satisfied customers are usually also loyal customers – as shown by a survey by Capgemini Study Sustainability in CPR 2020:

Three quarters of the companies surveyed from the consumer goods industry and retail sector stated that the inclusion of sustainability increases their customer loyalty.
79 % change their purchasing behavior in favor of more sustainability.
66% even select products and services specifically according to how sustainable they are.

This is in stark contrast to the 36% of large companies that were also surveyed in this study – and stated that sustainability does not play a major role for their customers. In the study, Deloitte examined The Sustainable Customer 2023study, Deloitte investigated what consumers want from companies when it comes to sustainability. The result: more transparency and honesty, among other things. 34% would trust a brand more if its ESG measures were verified by an independent third party – as the new Green Claims Directive aims to achieve.

Infografik: Studien, wie sich Nachhaltigkeit die Kundenbindung stärkt

Sustainability – the key to motivated employees

However, satisfaction must not only come from outside, but also from within. After all, motivated employees do more for their company. A company with a sustainable focus can provide precisely this additional motivation boost – and also give itself a real advantage in the search for talent:

67 % of the employees surveyed for the report Sustainability in CPR report stated that the integration of ESG issues in the company had increased employee motivation.
The EIB Climate Survey 2023 found that 56% of people surveyed value an employer that thinks (and acts!) sustainably.
For almost a fifth of the younger job seekers surveyed in this study, sustainability is even the criterion when choosing an employer.
And an HR survey by Gartner found that a strong ESG culture can increase employee engagement by up to 43%.

Infografik: Studien, wie sich Nachhaltigkeit Mitarbeitermotivation fördert und bei der Talentsuche unterstützt

Sustainability creates jobs

All of these factors play a role in economic success. However, the benefits of a sustainable economy can also be seen in the economy as a whole. According to a study by Deloitte, Germany will generate around 12 billion euros in additional gross value added per year by 2030, creating 177,000 new jobs in the process. In addition to economic successes, 5.5 million tons of greenhouse gases will also be saved each year.

Infografik: 3 Fakten, welche Vorteile eine Nachhaltige Transformation der Wirtschaft bzw. eine Kreislaufwirtschaft für Deutschland bringt

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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Stakeholder-Anforderungen von ESG-Informationen an KMU

12.02.2024

5 reasons why a sustainability report is also worthwhile for SMEs

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CO2-Bilanz, Klimaziele, Net-Zero: Hinter all diesen Begriffen steckt die Dekarbonisierungsstrategie bzw. die Klimastrategie von Unternehmen. Die ganzheitliche Erarbeitung einer solchen Strategie hat viele Vorteile. Welche Chancen dahinter stecken, lesen Sie hier.

08.04.2024

5 advantages of a decarbonization strategy: Why it is important for companies

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Best practices in the areas of ESG and sustainable supply chains
Developed with expertise from 12+ years of sustainability management
Sustainability events and much more.

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Schmelzender Eisberg im Wasser als Symbol für die Klimastrategie

17.04.2024

Step by step to Net Zero: how to develop a climate strategy for your company

The climate strategy for your company is imminent. But how to start – and where? Read this article to find out how to develop a suitable strategy for targeted decarbonization step by step!

Sustainability has become more of a focus for society, politics and business in recent years.
With the Paris Climate Agreement, the European Green Deal and its various implementation strategies such as CBAM, the EU Climate Change Act, CSRD or CSDDD, there is a whole range of targets, goals and guidelines, including for climate protection.
Nevertheless, there are warnings that the current course is not enough and that we will crack the 1.5° mark sooner than feared.
So is it better to bury our heads in the sand because it won’t help anyway?
No – it is now all the more important that everyone gets involved.
Companies in particular have a responsibility here.
But how and where to start?
Here is a step-by-step guide to developing a decarbonization strategy for your company!

1. recognize the challenge: Tackling the climate strategy with the right motivation

55% of the German managers surveyed in a Capgemini study stated that In the next ten years, climate change will pose the greatest challenges for the business model.
Climate change is no longer just around the corner – it already has both feet in the hallway.
For the first companies, it has even arrived in the living room and is smashing the fine china in the display case.
This is because climate change has long since had an impact on the first supply chains and business models.
So the challenge is clear: develop strategies and plans to reduce your own company’s emissions. At VERSO, we think it’s important not only to recognize the challenge – but also to find the right motivation to get started in a focused way and to persevere.
So here’s a question for you: What is your motivation behind developing a climate strategy? Perhaps for you it’s the traditional regulatory pressure.
For example, because you are obliged by the CSRD to disclose your climate strategy.
But perhaps the matter is also close to your heart regardless of the law – because you can see the advantages of a climate strategy or because you want to future-proof your company.
You may also want to arm yourself against rising costs due to CBAM and EU emissions trading, meet the growing demand for sustainable products or strengthen your employer branding.
Whatever it is, a clear motivation brings commitment throughout the company and ensures that your decarbonization plan is not just based on dry numbers.

2. create a CO₂ balance sheet or GHG balance sheet: The basis of your climate strategy

But it doesn’t work entirely without dry figures.
Once the commitment has been clarified, the second step is to lay the foundations for your decarbonization strategy.
This first requires an inventory in the form of a carbon footprint.
The Greenhouse Gas Protocol(GHG Protocol) provides you with guidance.
This is the most widely used standard for balancing greenhouse gas emissions.
Important when determining your emissions: Go really in-depth and get as much data as possible – from as many sources as possible!
How is your company structured?
What sources of emissions are there in your company?
Which of these sources are real emissions hotspots?
How many emissions are generated each year?
Work your way through your processes, products and activities step by step – right through to Scope 3.
Because even if it is easier to collect data for Scope 1 and Scope 2, Scope 3 emissions from the upstream and downstream value chain account for up to 80% of a company’s total emissions!
Tools such as our Climate Hub and Supply Chain Hub make it easier for you to record all climate data accurately and clearly.

Überblick zu den einzelnen Scopes: Scope 1 umfasst direkte Emissionen eines Unternehmens, Scope 2 umfasst indirekte Emissionen eines Unternehmens und Scope 3 umfasst alle Emissionen, die in der Wertschöpfungskette eines Unternehmens entstehen.

By the way: If you want to know even more precisely, you can balance all of your company’s greenhouse gas emissions.
In addition to CO₂, a complete GHG balance sheet includes six other gases with greenhouse gas potential – including methane and nitrous oxide, for example.

3. set targets for the decarbonization strategy

The status quo is ticked off.
Now the journey can begin.
But – where are we actually going?
The next step is to set clear climate targets for your company.
Preferably in SMARTform, of course:

Specific
Measurable
Ambitious
Realistic
Scheduled

Be sure to involve your company’s stakeholders here – because setting targets over the heads of employees, which they ultimately have to implement, can quickly backfire.
Here is a short checklist for the goals of your climate strategy:

Our climate targets are science-based (support is provided, for example, by the SBTi sector guidelines)
Our climate targets support the 1.5° target of the Paris Climate Agreement
We have set a baseline year to benchmark our progress
We have agreed a clear timeframe for our climate targets

When planning your reduction targets, also differentiate between:

Long-term climate targets that go hand in hand with far-reaching structural changes in your company
Short-term climate targets with which your company can achieve initial success quickly
Absolute climate targets; i.e. quantitative targets to be achieved by time X
Relative climate targets; i.e. the CO₂ reduction depends on key figures such as the number of employees or production figures

4. plan measures to implement the climate strategy

You are aware of your company’s emissions and climate hotspots and have set yourself clear decarbonization targets. Unfortunately, targets alone do not slow down climate change.
So in step 4, it’s time to plan your strategy so that you can take action.
Here are four tips from our side:

Involve important stakeholders here again in order to find as many approaches and levers as possible.
External consultants are also worth considering – they can help you uncover hidden potential for reducing emissions.
Make sure that the measures are feasible.
No one is helped if you develop ambitious goals and radical measures that are unfortunately not compatible with reality.
Get a picture of the maturity levels of your stakeholders.
An example: In order to achieve the climate targets in the supply chain, suppliers should produce 100% with renewable energies.
Supplier A has had sustainability on its agenda for a long time and fulfills this requirement with ease.
Supplier B has not had much to do with sustainability so far, but wants to make the switch – your company can help here with training or support.

5. reduce emissions

If planned correctly, your climate strategy should work like a cycle: After the initial assessment with objectives and action planning, there is a “working phase” in which you let your measures take effect and pursue your goals.
After a year, you take stock and adjust your strategy to make it even more efficient.
The rule here is: good things take time.
If the decarbonization strategy is to have a real impact, it can run for ten years or longer in large companies with extensive processes and supply chains!

6. offset unavoidable emissions

Let’s be honest – CO₂ compensation is a controversial topic.
Some are in favor of it, others see it as greenwashing.
In principle, offsetting should really only be an option if you have fully exhausted all potential for reducing emissions.
If you decide to offset unavoidable emissions as part of your climate strategy, we would like to give you an important tip: Make use of reputable offsetting projects that

are tailored to your company and
whose effect is measurable.

The voluntary carbon market is not yet regulated by the state and is rather opaque.
Instead of legally binding criteria for validating carbon offsetting, there are only a number of private standards and registers with different quality criteria.
The result: major differences in quality within the climate protection projects on which the so-called CO₂ credits are based.
So take a close look.
In particular, Deutsche Umwelthilfe (DUH) has already successfully (and publicly!) sued several times against compensation through forest projects and reforestation, for example because the estimated forest area could not compensate for the amount of CO₂ emitted or the project did not run long enough to keep up with the lifetime of CO₂ in the atmosphere.

7. optimize climate strategy – and communicate with pleasure!

We briefly touched on this a moment ago: The decarbonization strategy is not a one-off project.
Once it gets rolling, it will run for many, many years.
After all, we still have a long way to go with climate change.
And a lot can happen in those years.
Check progress regularly.
What is going according to plan, where is there a hitch, where is nothing happening at all?
Check whether you will achieve your goals within the agreed time frame.
Talk to your stakeholders about where there is still potential. And please evaluate honestly whether your current strategy is actually of any use to the stakeholder on whom everything ultimately depends: nature! Last but not least: mistakes are part of the process – just like celebrating successes.
Communicate your progress, but also openly admit where you may have misjudged.
Show what your company wants to achieve and where you want to make improvements. Transparency, honesty and commitment are the drivers of sustainable transformation!

Let’s find your way towards Net Zero

Alongside sustainability reporting, planning and implementing the climate strategy is one of the most time-consuming tasks.
Thousands of data points and emission factors from the entire value chain are included in the calculation of the carbon footprint.
Many of these are not directly available to you and must first be obtained.
If you want to carry out the calculation correctly (i.e. in line with international standards such as the GHG Protocol), you need insight and perseverance.
And then there are doubts like: Do our climate targets even make sense?
Are our measures having any effect?
Can I communicate this and that milestone for our product now, or will I be accused of greenwashing?

The first climate strategy in particular is a real challenge.
VERSO helps you to get started – and to implement your decarbonization plan safely in the long term.
Interested?
Then take a look at how we can support you with your climate strategy:

How VERSO helps

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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Es lohnt sich für Unternehmen, wenn sie eine Nachhaltigkeitsstrategie entwickeln.

30.04.2024

Guide: How do I develop an effective sustainability strategy for my company?

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LKW-Fahrer mit Klemmbrett – Symbolbild für die Dekarbonisierung der Lieferkette

02.12.2025

Decarbonizing the Supply Chain: How To Achieve Climate Goals Along the Supply Chain

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CSR, ESG oder Nachhaltigkeit: Wo liegen die Unterschiede? © yunus susanto, Getty Images via canva.com

29.01.2024

CSR, ESG, Sustainability – What’s the Difference?

CSR, ESG, sustainability: What may seem like the same thing at first glance actually differs. In this post, we clarify the difference between the terms “ESG,” “CSR,” and “Sustainability”!

In this article, we’re comparing apples to pears that, at first glance, all seem like apples – because it’s about the very similar terms “CSR,” “ESG,” and “Sustainability.” You’ll read what these terms actually mean and how they differ.

What does CSR mean?

You can think of “CSR” as a kind of moral and ethical foundation for a company’s sustainability strategy. CSR stands for “Corporate Social Responsibility.” And although the word “Social” is included, it doesn’t only refer to the social aspect of sustainability. CSR also encompasses environmental and governance issues. You may have come across the abbreviation “CR” – which stands for “Corporate Responsibility” and intentionally excludes “Social” to avoid confusion. CSR or CR is essentially the predecessor to ESG. Or, to put it with an English saying: CSR walked so that ESG could run. The EU Commission defined CSR as follows back in 2011:

“[A] concept that serves as a basis for companies to integrate social and environmental concerns into their business activities and their interactions with stakeholders on a voluntary basis.”

If we look at it closely, CSR primarily refers to a company’s awareness of the impact it has – whether actively or passively – on society or the environment. In terms of CSR, companies address their responsibility by taking qualitative actions that go beyond the legal minimum (e.g. CSRD, LkSG).

What does ESG mean?

“ESG” stands for “Environmental, Social, Governance.” Unlike CSR, ESG is a more pragmatic, detail-oriented approach to sustainability efforts. The term encompasses the impact of corporate strategies and practices on these three areas:

Environmental: Environmental criteria such as energy consumption, climate strategy, or resource management.
Social: Criteria related to stakeholders (beyond investors), such as working conditions along the supply chain, diversity, or the gender pay gap.
Governance: Criteria for ethical corporate governance, such as anti-corruption measures, whistleblower protection, or supplier selection.

ESG is quantitatively oriented. For example, the ESRS, the framework for sustainability reporting under the CSRD, predominantly requires clear key figures.

At the core of ESG is the so-called “triple bottom line,” also known as the “3-pillar model of sustainability.” This approach posits that sustainable development is only possible when environmental, social, and economic sustainability goals are pursued equally.

And what is sustainability?

Let’s now address the final point in our distinction between ESG, CSR, and sustainability.

Sustainability, or “Sustainability” in English, is essentially an umbrella term for ESG and CSR. Without CSR and ESG, sustainability cannot exist.

Let’s take a brief journey to the Ore Mountains in the early 18th century. In the mining region, wood was such an important resource for fuel, construction, and ore smelting that it became increasingly scarce. Hans Carl von Carlowitz, who was, among other things, the head of the Upper Mining Office in Freiberg and responsible for timber supply, first formulated the definition of sustainability, stating that only as many trees should be cut from the forest as could grow back. By the 19th century, this definition became established in other areas as well.

Zooming out to the big picture, sustainability means that systems—regardless of their type—can only be stressed to the extent that they can withstand without damage. Resource usage should only occur within these limits.

Today, in 2024, we are all more aware than ever: Most of our systems have already reached their limits or are being used far beyond their capacities. Whether it’s overfishing or deforestation, mining rare earths or oil extraction, air pollution or human exploitation, we need to strengthen the concept of sustainability and act now to create a livable future for future generations.

Companies play the key role in sustainability, as enablers of consumer needs, facilitators of familiar conveniences and living standards. By becoming aware of their responsibility (CSR) and adjusting their business strategies and supply chains (ESG), they hold the key to sustainable transformation.

Conclusion: Is ESG or CSR more important?

To answer the often-asked question of whether ESG or CSR is more important: Both complement each other. However, ESG has today become the more common term for a comprehensive sustainability strategy.

CSR represents the fundamental idea necessary for the sustainable transformation of the economy: the awareness that companies bear responsibility and must act accordingly. ESG, on the other hand, provides the framework for targeted action. Thus, measurable and effective actions are derived from a sense of responsibility.

* This information is summarized editorial content and should not be considered legal advice. VERSO assumes no liability.

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23.04.2024

Why is sustainability important for companies?

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Nachhaltigkeit auf der Website kommunizieren

18.12.2023

Communicating sustainability on the website

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Pragmatic all-in-one solution for ESG reporting, climate and supply chain management
Individual advice from the VERSO experts
Developed with expertise from 12+ years of sustainability management
Trusted by 250+ customers

18.12.2023

How to communicate your sustainability on the website

Your company is sustainable – but do potential customers know that? In this article, you will find 6 tips for communicating your sustainability measures credibly on your website.

More and more consumers are specifically choosing companies based on sustainability aspects – and more and more companies have to pay close attention to ensuring that everything is above board in their supply chain since the LkSG came into force.

Sustainability is increasingly becoming an important criterion when making purchasing and partnership decisions. And what better way than your own website to inform potential customers and partners about your sustainability efforts? So it’s high time to put your company’s sustainability efforts in the spotlight.

But what’s the best way to do this?

6 tips for communicating sustainability credibly on the website

Tip 1: Transparency and measurable data

Facts, facts, facts: Solid figures are still the most credible. That’s why our first tip is to provide a detailed sustainability report on your website – e.g. as a separate page or as a downloadable PDF document. The report shows existing measures, but also describes what your company will implement in the future. In addition, show prominently and separately to the report what goals you have set yourself and what measures you intend to take to achieve them. Also state openly where there is still a need for action. From 2024, the CSRD will require around 15,000 companies to publish a sustainability report anyway. However, a voluntary report is also a good thing for all companies that want to clearly show: “We take sustainability seriously!”

Tip 2: Awards from independent bodies

Has your company been certified for sustainability measures? Then be sure to place the relevant seals and certificates on your website! External confirmation of your sustainability efforts increases credibility enormously. Important here:

Don’t hide your awards in a small section on a subpage that isn’t even linked in the menu.
Whether as a banner on the homepage or as a separate menu item: If you do good, it’s okay to show it!
Look for awards from recognized, independent bodies.
Certificates and seals that any company can simply buy with enough money harbor the risk of greenwashing.

Speaking of greenwashing: you can find out how to avoid the most common stumbling blocks in the article “The five biggest greenwashing traps and how to avoid them”.

Tip 3: Present cooperations

Where do you source your raw materials or goods? Which companies do you work with – and how sustainable are they? Do you cooperate with environmental, animal welfare or human rights organizations with which your company creates impact beyond its own backyard? What projects is your company involved in? These are all interesting points that you should definitely not sweep under the carpet! Show how you are getting involved and actively shaping the change towards sustainability through your responsibility. But be careful not to fall into any greenwashing traps here either.

Tip 4: Show commitment

Was the fact that you planted a flowering meadow next to the company headquarters in 2020 the latest news in terms of sustainability? Hopefully not! If you really want to communicate your company’s sustainability credibly, you should plan for the long term – ideally on the basis of a holistic sustainability strategy. In any case, describe what your company has already achieved. List how sustainability is currently practiced. For example, through a healthy working environment for your employees or fair pay in your own supply chain. After all, sustainability is not just about the environment. But also show what you are planning for the future. Present long-term sustainability goals with clear milestones on your website. Make sustainability an integral part of your company’s purpose statement. Share progress reports. Continuity and commitment are still the best way to show that sustainability was more than just a short-term marketing measure for you.

Tip 5: Be honest

Honesty lasts the longest. This also applies to sustainability communication. No company is 100% sustainable – so don’t try to pull sustainability measures out of the air. Present your previous measures and successes, but also admit openly and honestly where there may still be a problem. This will not make you look bad – on the contrary! It shows that your company is seriously thinking about sustainability.

Tip 6: Demonstrate sustainability with a sustainable website

Last but not least, a point that is easy to forget at first glance: if you want to emphasize the sustainability of your company, you should definitely take a close look at your website! Tools such as the Website Carbon Calculator will calculate the CO2 footprint of your website in no time at all.

Is your website more of a global average? Then look out for specialists in green web design to exploit the full sustainability potential of your site.

Until then, some simple tips like these will help you to make your website more sustainable without any design or coding knowledge:

Reduce file sizes (images and videos).
Check whether your site is powered by coal – you can do this very quickly using the Green Web Foundation tool, for example. If not, switch to a web hosting provider with transparently traceable green electricity.
Design your website to be barrier-free in order to also do justice to social sustainability – a first step here would be descriptive texts for images, for example.
Take the plunge and declutter so that outdated content and superfluous tools don’t continue to waste energy for no reason.

We wish you every success – and are happy to help if you need support with your sustainability communication!

Holistic sustainability consulting

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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23.04.2024

Why is sustainability important for companies?

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Meeresschildkröte, die durch Plastikmüll schwimmt: Mit der neuen EU-Richtlinie gegen Greenwashing sollen solche Bilder seltener werden

26.03.2024

Green Claims Directive: EU takes action against greenwashing

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Wander-Wegweiser als Symbolbild für den Vergleich verschiedener Nachhaltigkeits-Standards

10.08.2022

Sustainability report: What standards are there?

The new CSRD reporting obligation means that around 15,000 companies in Germany are required to report. What is the right standard for your CSR report? To make it easier for you to choose, we present the most important standards. You will also find a factsheet at the end of this blog post showing you which standard is suitable for which company.

UN Global Compact: Suitable for beginners, only minimum requirements

The United Nations Global Compact, or UNGC for short, was founded by Georg Kell in 2000 on the initiative of former United Nations Secretary-General Kofi Annan. The aim was and is to shape globalization in a fair, environmentally and socially responsible way. The UNGC is the world’s largest and most important initiative for sustainable and responsible corporate governance. Over 19,000 companies and organizations have signed it – including more than 800 in Germany. The framework formulates ten social and ecological principles in the areas of human rights, labour, environmental protection and anti-corruption, to which the participating companies and organizations are committed. In addition, the UN Global Compact is based on the 17Sustainable Development Goals (SDGs) of the United Nations.

DNK: Good introduction, easy to use, for German-speaking countries

The German Sustainability Code (DNK) was introduced in 2011. The aim is for companies to provide information about their sustainability performance and thus create comparability. Around 800 companies have now published a DNK declaration. The standard comprises 20 criteria that must be reported on. They are divided into the subject areas of strategy, process management, environmental issues and society. When reporting, companies can select either the GRI (Global Reporting Initiative) or EFFAS (European Federation of Financial Analysts Societes) performance indicator set.

GRI: Most established internationally, high effort

The Global Reporting Initiative (GRI) is a foundation that was established in 1997. The GRI guidelines are considered the most important standard for sustainability reports worldwide. The aim of the global standards is to make sustainability reports more comparable through uniform requirements. The guidelines are continuously developed in a dialogue process with companies and civil society organizations. Companies that prepare their sustainability report in accordance with the GRI standards must provide extensive information about the company, the management approach and economic, ecological and social standards. The Global Reporting Initiative has now updated its standards once again. The latest changes apply to all reports published from January 1, 2023.

SDG: Framework with the 17 UN Sustainable Development Goals

The member states of the United Nations adopted the 2030 Agenda for Sustainable Development in September 2015. It includes the 17 UN Sustainable Development Goals, or SDGs for short, which cover all three dimensions of sustainability: Environmental, social and economic. The global goals are to be achieved by all countries by 2030 in order to make the world fairer, healthier, more peaceful and more social. The SDG framework serves as a guide for companies that want to report on their sustainability performance. Guidelines such as the Global Reporting Initiative (GRI) and the UN Global Compact are available to help companies implement the 17 Sustainable Development Goals and the sub-goals in their supply chains. Both guidelines propose indicators and key figures for measuring the sustainability performance of companies for the individual SDGs.

ISSB: global standard for capital market-oriented companies, under development

The International Financial Reporting Standards Foundation is currently developing global standards for the sustainability report of capital market-oriented companies. To this end, the non-profit IFRS Foundation established the International Sustainability Standards Board (ISSB) in Frankfurt. The future standard has great potential to become the leading international framework. The aim of the ISSB is to define minimum standards for credible, transparent and comparable reporting in the area of ESG criteria (environmental, social and governance). For example, companies should specify which key figures they use to measure and monitor sustainability-related risks and opportunities and which strategy they intend to use to manage them.

ESRS: uniform European standard, being developed as part of the CSRD

As part of the new CSRD (Corporate Sustainability Reporting Directive) reporting obligation, a uniform standard is also being introduced. This should make the reports more meaningful and comparable. However, this also increases the amount of work involved. The European Financial Reporting Advisory Group, EFRAG for short, has been tasked with drawing up the European Sustainability Reporting Standards (ESRS). All information on the ESRS can be found in our factsheet.

Factsheet: ESRS

ISO 14001: good standard for environmental management

ISO 14001 is a globally recognized standard for environmental management systems that was published in 1996. The aim of the international standard is for companies to improve their environmental performance and achieve environmental targets. Around 300,000 companies worldwide are certified to ISO 14001 – around 8,000 of them in Germany. The environmental management system is based on four pillars: the planning of environmental targets, the implementation of the defined measures, monitoring and improvement.

ISO 26000: Guidelines for socially responsible behavior

ISO 26000 was published in 2010 and is a guideline that defines socially responsible behavior. As the standard does not provide for certification, it is not as widely used as ISO 14001, for example. The standard formulates numerous recommendations for action on core issues of social responsibility. These include the environment, human rights, employee rights, customer rights and society.

EMAS: more complex standard for environmental management

The Eco-Management and Audit Scheme, EMAS for short, was developed by the European Union and introduced in Germany in 1995. It is a joint system of environmental management and environmental auditing. The aim is to help companies that want to improve their environmental performance. In Europe, around 4000 organizations are registered under EMAS – over 1100 of them are from Germany. Companies must publish an environmental statement in which they disclose, among other things, their impact on the environment, their environmental performance and their environmental objectives. Employees must be involved in this process. EMAS covers the contents of ISO 14001 and goes even further.

TCFD: Recommendations to the financial sector and capital market-oriented companies

In 2017, the Task Force on Climate-related Financial Disclosures (TCFD), founded on the initiative of the G20 countries, drew up recommendations for voluntary and consistent reporting on the effects of climate change. The recommendations are aimed at the financial sector and capital market-oriented companies. Over 1000 companies worldwide have committed to implementing them. The aim is to provide companies and investors with decision-relevant information on material climate-related financial risks and opportunities. According to the recommendations, information should be provided on governance, strategy, risk management, key figures and targets.

We help you with your sustainability report

The first sustainability report is a challenge, not everything will go smoothly straight away. It is important that you take the first steps and continue to develop with the relevant standards. We will accompany you on this path. We help you to set up a sustainability strategy and with reporting. With our CSR management software , you can collect all relevant sustainability data quickly and clearly. And with our training courses, you can gain new input and become a CSR professional.

Any questions? Please write to us.

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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Gespiegelte Blätter – Symbolbild für die doppelte Wesentlichkeit

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What does double materiality mean?

The EU has introduced the CSRD (Corporate Sustainability Reporting Directive). 15,000 companies in Germany must now prepare sustainability reports. Their content is determined by the principle of materiality. The introduction of the CSRD enshrines dual materiality. Read what’s behind it.

Definition: Was bedeutet doppelte Wesentlichkeit?

Double materiality means: it must be stated
how sustainability aspects affect the company (outside-in perspective)
AND
how the company affects society and the environment (inside-out perspective). The dual materiality will change the materiality principle used in Germany in particular and lead to significantly more information being relevant to reporting and CSR reports becoming more meaningful as a result. In future, companies will have to state both perspectives – independently of each other – in the sustainability report. Previously, both aspects had to be fulfilled at the same time. In the case of the outside-in perspective (“financial materiality”), disclosures must be made that are necessary for an understanding of the company’s business performance, results or position. Particularly in the world of finance, this perspective is often the only one considered today and referred to as “ESG” or “ESG-related risks” – in other words, only the risk perspective is considered from a sustainability perspective. With the inside-out perspective (“environmental and social materiality”), information must be provided that is necessary for an understanding of the impact of business activities on sustainability aspects. In short, it must be explained: What impact does my company have on the planet and society?

Infografik: Erklärung doppelte Wesentlichkeit der CSRD

The outside-in perspective

Many companies have so far focused on the outside-in perspective, as it represents a form of risk management. This field will also be covered in the future. The information is primarily aimed at investors. From the outside-in perspective, companies must disclose the following information:

How do external developments affect the business model, strategy and sales, among other things? External developments include unexpected weather events, for example, but also stricter regulatory requirements.
Industry-specific topics also play a role: Are there sustainability aspects that have already been identified by competitors, customers or suppliers?
What are the main risks for the company, a product or a service? And how are they managed or mitigated?

The inside-out perspective

The inside-out perspective significantly broadens the view. Contact persons are not only investors, but also employees, consumers and environmental and social organizations. From the inside-out perspective, companies must disclose how their activities affect society and the environment. The impact of products, services and business relationships (including the supply chain) should also be mentioned here. Information is required on, among other things

Environmental issues:

Climate impact
Prevention and reduction of environmental pollution
Environmental impact of energy use
Biodiversity

Social:

Health and safety in the workplace
Diversity and equal treatment
Human rights
Social commitment

Governance:

Management and control processes
Combating corruption and bribery

The goal of dual materiality

With the introduction of the new CSR reporting obligation CSRD, the European Union wants to increase the scope of sustainability disclosures. This will make CSR reports more meaningful and comparable. The impact of the sustainability report will also be increased because the dual materiality contributes to a shift from a shareholder perspective to a stakeholder perspective. The CSR report is aimed at investors, but also at employees, customers and society.

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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1. recognize the challenge: Tackling the climate strategy with the right motivation

2. create a CO₂ balance sheet or GHG balance sheet: The basis of your climate strategy

3. set targets for the decarbonization strategy

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6. offset unavoidable emissions

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* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

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Tip 4: Show commitment

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Sustainability report: What standards are there?

UN Global Compact: Suitable for beginners, only minimum requirements

SFDR – the standard for the financial sector

DNK: Good introduction, easy to use, for German-speaking countries

GRI: Most established internationally, high effort

SDG: Framework with the 17 UN Sustainable Development Goals

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Which standard for which company?

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* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.