One of the most critical factors driving ESG disclosures is investor pressure. Investors want to understand how a company’s environmental and social performance impacts its financials and are increasingly making decisions based on ESG metrics. The public also has increased awareness of corporate ESG reporting, with more companies committing to transparent disclosure. As a result, the public expects companies to demonstrate their commitment to sustainability. There are seven ways that help the organization to become more sustainable.
The Corporate Sustainability Reporting Directive (CSRD) is a significant step forward for sustainability reporting in the European Union. It expands and amends existing EU requirements for corporate sustainability reporting, creating an ambitious set of draft standards that cover over 1,100 disclosures related to environmental, social, and governance topics. The Directive also requires companies to report to stakeholders beyond investors and includes non-EU-based companies if they generate substantial revenue and have employees (e.g., a subsidiary) in the EU.
In addition, not only will private companies need to consider ESG when structuring their operations and investments, but becoming compliant with SEC disclosure requirements will also be crucial for any company looking to go public. Companies that can provide a comprehensive and accurate list of climate-related risks in their registration statement will gain an edge over the competition when attracting investors.
resource: https://www.esgtoday.com/guest-post-seven-ways-esg-reporting-is-already-here/