From 2024, all listed companies in the EU with +500 employees must report annually what negative and positive effects their activities have on ESG - environmental conditions, social responsibility and good corporate management.
In the following years, all EU companies with more than 250 employees and later on also small listed companies will be subject to the new ESG reporting requirements, the European Parliament decided in November 2022.
Environmental, Social and Governance, ESG, refers to the environmental, social and governance factors that also affect your company and which must develop global standards for corporate approaches to sustainable behaviour.
Acting decently and responsibly is good business. And in future, ESG will affect everything from company talent care and retention to market image and prestige and, ultimately, to the company's right to act and conduct business.
"The EU directive primarily targets larger companies but will affect virtually everyone because the large companies must obtain information from their sub-suppliers to report on the impacts in their value chains.
Therefore, we recommend all companies to get ready to adjust to the directive," the Head of Global Development and Sustainability at The Confederation of Danish Industry, Marie Gad, states.
Environmental, Social and Governance, ESG, refers to the environmental, social as
well as managerial factors that also affect your company. Photos: iStock
”The ESG visions are right because they aim to create similar conditions of competition in the EU and reward companies that work seriously with sustainability.
But things may have gone a little too fast, and still, the companies do not know to what extent they will need to report in the future," Marie Gad adds.
For office companies and their employees, it is probably primarily 'Social' and 'Governance' that might have substantial and immediate relevance.
The S refers to how the companies manage the relationship with their employees, G to how your employer handles the leadership and the decision-making processes in everyday work life.
ESG in your office company can be relevant in resorts such as equality, diversity and
inclusion, recruitment, retention and training, health and wellbeing, pay levels and
internal labour policies and practices.
ESG in your office company can be relevant in resorts such as equality, diversity and inclusion, recruitment, retention and training, health and well-being, pay levels and internal labour policies and practices.
Office companies can take social responsibility by offering a diverse and inclusive workplace, promoting professional development and growth, supporting employee well-being and practising clear transparent communication and ethical decision-making.
Steps of ESG
"Companies should look at this more as an opportunity for growth than a burden. There are large and smaller steps companies can take when trying to launch sustainability or ESG initiatives in the workplace.
This can range from running employee awareness campaigns or asking employees how to improve their sustainable working practices. Sharing ideas for green activities ensure employees feel engaged during the process," founder and CEO of the lifestyle insurance company YuLife, Sammy Robin, says.
Your company can take large and smaller steps when launching new sustainability
or ESG initiatives in the workplace.
These days, job seekers tend to choose a workplace that best aligns with their ethics and priorities, not just salary expectations. Workers are the lifeblood of any business, and a mismatch in company and employee values spells more trouble for businesses than they might realize.
ESG strategies are key to hiring and retention, which means that embracing sustainability initiatives could provide a win for all parties inside and outside the office," Sammy Robin points out. ●
Farrer.co.uk: ESG in the workplace: what is it and why is it important?
Forbes.com: The power of purpose - how ESG affects your company's talent
Greenbusinessbureau.com: How to create ESG goals for your business in 5 steps
Workdesign.com: Companies are moving to offices that align with their ESG goals