Where Did This Sustainability Reporting Come From?
It is not something new, of course. Some organisations have been preparing sustainability reports for years. But voluntarily…
Now enacted into law.
Two new standards raise the bar for sustainability reporting efforts:
- IFRS1 and IFRS2, published in June 2023 by the International Sustainability Standards Board (ISSB), which operates under International Financial Reporting Standards (IFRS).
- In Europe, the standards adopted by the European Commission in July 2023 (ESRS-European Sustainability Reporting Standards)
There was a demand for these standards. For clear, comprehensive and comparable sustainability reporting… The demand was coming from financial institutions. They are looking for comparable and verified information on sustainability-related risks, opportunities, impacts and strategies.
For what? To assess the long-term resilience of the company. To make investment decisions accordingly.
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I see the decision on general standards to create a common language and the enactment of these standards as positive developments.
These standards will undoubtedly affect the organisations in the value chain of the institutions subject to this law in our country and in Europe. Organisations that did not prepare sustainability reports before may have to prepare sustainability reports from now on.
However, in my opinion, there is one point that should be very careful:
The means must not override the ends. Reporting is a tool, after all…
What organisations really need to do is to take environmentally friendly steps and report these steps together with targets. Taking environmentally friendly steps requires a significant mental transformation, the creation of a culture of sustainability, the development of green skills and the employment of green professional groups.
Writing a report alone is not enough!