The disclosure of environmental, social and governance data, known as ESG reporting, aims to make a company's activities in these areas transparent. This not only increases clarity for investors, but also motivates other organizations to take similar measures.
ESG is a framework that helps companies measure and improve their sustainable business practices. It covers three main areas:
- Environmental: This includes factors such as CO₂ emissions, waste management, water usage, and resource utilization. These aspects are especially crucial in the face of the global climate crisis and rising regulatory requirements like the EU Taxonomy.
- Social: This area focuses on the company’s relationships with its employees, society, and customers, covering topics such as working conditions, human rights, and product safety.
- Governance: Governance addresses aspects of corporate management, including transparency, diversity in leadership, anti-corruption measures, and shareholder relations.
ESG factors are gaining importance across various sectors, not only as a benchmark for ethical investment but also as a key element in securing a company's long-term competitiveness.
For industrial companies, ESG is especially significant as compliance with ESG standards often directly impacts regulatory requirements like the Corporate Sustainability Reporting Directive (CSRD). This directive mandates that companies provide comprehensive reporting on their sustainability efforts and related emissions, including the challenging Scope 3 emissions. The Environmental aspect is particularly critical for industrial companies, as they frequently face substantial greenhouse gas emissions and resource efficiency challenges. Proper implementation of ESG standards can also provide competitive advantages by fostering transparency and positioning companies as leaders in sustainable practices.
