From ESG performances to sustainability reporting
Contemporary companies are called to face sustainability challenges on both operational and strategic levels, in order to activate strategies and business model innovation that can enable environmental restoration, social justice and a more resilient future for business profitability.
Organizations therefore need to integrate mechanisms to inform all stakeholders about the performance of their ESG strategies to enhance transparency about sustainability related risks and opportunities embedded in their current business model and future ambitions.
Elaborating a robust sustainability report, also known as ESG report or impact report, is an effective solution that can help satisfying stakeholders needs, building corporate ESG ratings and aligning the organization with the regulatory landscape trends about non-financial disclosures.
Sustainability reporting and the evolving landscape
The national and international institutions attention on sustainable development and climate change risks is dramatically growing and it lays behind multiple regulatory efforts that aim to integrate sustainability into business operations, including their reporting processes.
As stated by the European Commission back in 2011 with COM(2011)681, disclosing social and environmental information, including climate risk related details, can enable commitment with all stakeholders, help identifying sustainability risks and grow general public trust and awareness of businesses action towards sustainable development.
The EU has been active ever since and introduced in 2014 the 2014/95/EU Directive, also known as Non-Financial Reporting Directive (NFRD) which has been laying down the core regulations about sustainability reporting for a large number of companies.
Under the directive, large companies with more than 500 employees, including listed companies, banks, insurance companies and other public-interest entities are obliged to publish non-financial information about environmental aspects, employees welfare, human rights, diversity, anti-corruption and anti-bribery practices.
The NFRD has been widely implemented into national regulations across the EU, including the UK where the Directive has been transposed through The Companies, Partnerships and Groups (Accounts and Non-financial Reporting) Regulations 2016 (SI 2016/1245) integrating the existing Companies Act 2006 (s414CA and s414CB).
Both the EU and the UK are about to introduce new regulations that will update the former ones and will widen the number of companies that will be obliged to publish a sustainability report, together with a tighter focus on climate change related issues reporting.
The proposal for a Corporate Sustainability Reporting Directive (CSRD) will amend the NFRD requirements and will extend the scope to most of large and listed companies on regulated markets, will introduce EU sustainability reporting standards and will require the assurance of reported information. The CSRD has been presented by the European Commission and is expected to be enforced by 2023 for large companies, and 2026 for SMEs.
The UK government introduced the Companies Regulations 2021, also known as the Draft Regulations back in October 2021, which will amend the Companies Act 2006 and introduce mandatory climate-related financial disclosures by large UK registered companies and other public interest entities (PIEs). The Draft Regulations, which follows UK’s Net Zero Strategy, will be the first G20 regulation requiring climate-related financial reporting aligned with the Task Force on Climate-related Financial Disclosures (TCFD) guidelines.
Sustainability reporting with NUVA
NUVA supports organizations in complying with the non-financial disclosures requirements, providing solid guidance through the whole process in accordance with internationally recognized reporting frameworks such as the GRI Standards. Our offer includes the implementation of a stakeholder engagement and materiality assessment in line with AA1000 standards. We can also provide guidance with more specific reporting standards such as SASB, SECR (for energy related disclosures in the UK) and SBTI or TCFD for climate-related disclosures or the upcoming EU sustainability reporting standards developed by the European Financial Reporting Advisory Group (EFRAG).