Where communication helps with sustainability reporting - and what ORCA's experts advise
If you have heard of the European Sustainability Reporting Standards (ESRS) knows that there is an enormous challenge ahead. Those who have avoided the issue so far will soon come to the realization - perhaps with some shock.
But let's take a step back. The origin of this novelty in non-financial reporting lies in the EU Directive "Corporate Sustainability Reporting Directive"(CSRD). And this directive sets out various milestones. For example, companies must identify their reportable sustainability areas by means of so-called double materiality assessment .
This means: Which parts of your own business model have an impact on people or the environment and/or harbor significant opportunities or risks in financial terms? In turn, reasons must also be given as to why an aspect is not material.
Back to the ESRS. It is now turning this CSRD directive into a specific standard. This fact alone is complicated enough. And as is usual in EU law, the member states must implement these requirements into national law within 18 months. The deadline for this is scheduled to end in July 2024, but it is already known that the German translation will remain very close to the ESRS.
In turn, this means that large and/or capital market-oriented companies must align their sustainability reporting with this European standard. Spoiler: The threshold is gradually being lowered so that small and medium-sized companies will soon have to follow suit. If only because they are suppliers and the larger companies will demand corresponding input for their reports.
Compared to current standards, which differ from country to country and industry to industry, the ESRS has two main objectives: Firstly, the reports should be similar to each other and therefore comparable. Secondly, the standard views “sustainability” as a multi-layered topic with numerous facets in the areas of environment, social affairs and corporate governance.
The result: around 1100 data points - i.e. disclosures - have to be made. Or at least be declared immaterial in the form of a double materiality assessment.
Sustainability (report) is not something to do on the side
Is your head spinning? Understandable, because this is a really extensive process. There is also a key challenge: as the ESRS is fresh and new, there have been more theoretical experts so far. We will now all (have to) gain practical experience together. At ORCA van Loon, we are convinced that “all of us” will be a mix of project managers, experts within the company and service providers such as process managers, auditors and technical and communication consultants.
This is perhaps where the biggest scare is hidden: there are many people involved, many resources and yet there is no 100% certainty as to what the end result will look like. Nevertheless, there is no need to panic. The ESRS offers enough guidance to familiarize yourself and work your way through it. At the same time, it also offers enough flexibility to integrate your own paths, decisions and measurements in a meaningful way. So your efforts so far are by no means in vain. And as is always the case: the second report will be much easier than the first, and in ten years it will all be routine anyway.
Our advice: don't underestimate the consequences, but keep a cool head. Because in addition to the obligation, the process also offers huge opportunities. By creating a report, you can put your business on an even more stable footing, identify weaknesses and opportunities and demonstrate progress in a comprehensible way.
I need help! How communication can support the process
Our ORCA sustainability team knows that day-to-day sustainability communication depends above all on stakeholder dialog according to internal and external stakeholder dialog.The topic thrives on developments, findings and figures tangible. without going into greenwashing All of this continues to be important before, during and after the mandatory “report”.
Nevertheless, communication remains the central driving element in the process. Communicators can therefore support your ESRS journey in three key areas in particular:
- With process control and sparring
Efficient project management is a key aspect of the successful implementation of the ESRS. This is where communication professionals can act as project managers, keeping an eye on the entire process and ensuring that all steps are implemented on time. From chairing team meetings to creating timelines and action plans to formulating findings, communication can play a key role in driving the process forward.
Communication professionals are then also valuable as sparring partners. Through targeted questions and moderated discussions, they will help to ensure that relevant topics are examined comprehensively and from different perspectives.
- Acting as an interface to stakeholders
Another central task of communication: the interface function. Communication takes over the orchestration as soon as contact is made with stakeholders: Be it through a workshop, a survey or an interview. This can include internal stakeholders such as employees and managers, but also external stakeholders such as suppliers, customers and investors.
On the one hand, the communications department communicates the relevant information in an understandable and target group-oriented way - on the other hand, it collects the relevant information. This includes regular updates on the progress of the ESRS implementation, presentation of background information and objectives as well as communication of the successes achieved.
- Turning knowledge into action
The great expertise of communication professionals lies in words and their strategic use. They can put the sustainability strategy they have found into appealing and comprehensible texts and communicate it to men and women. Communication also plays an active role in the implementation of the measures. It supports the various departments in implementing the planned steps and ensures that the measures are efficiently implemented and accepted.
ESRS is not a line, but a cycle that is repeated year after year and should ultimately lead to demonstrable success. That is why we at ORCA see this as a key task of communication.
Ultimately, however, corporate communications can and must provide comprehensive support services. Alongside other strategic and technical decision-makers, it therefore plays a key role in successfully shaping the ESRS process and achieving the company's sustainability goals.
English (UK) 
Deutsch 