10 Good Reasons for Sustainability Reporting

Since 2017, large, capital market-oriented companies are required by German law to disclose non-financial aspects of their corporate activities. In November 2022, the EU adopted the Corporate Sustainability Reporting Directive (CSRD). It expands both the content to be reported and the group of companies subject to reporting requirements. Therefore, starting from 2027, listed small and medium-sized enterprises (SMEs) will also fall under this reporting obligation.  However, the preparation of a sustainability report is already worthwhile - even for SMEs. This blog entry shows how you too can benefit from preparing a sustainability report.

What are the advantages of preparing a sustainability report? 

The documentation of all company activities offers you numerous advantages. 

         
 
 
 
Company
  
 
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1. 
 
Inspiring the (re)design of in-house processes:
Small changes can save enormous costs, for example by reducing material and energy consumption. Risks can also be minimized, for example in occupational health and safety. 
  
 
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2. 
 
Strengthening your innovative capability:
Addressing and optimizing processes provides room for novelty and innovation. 
  
 
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3. 
 
Improving your corporate image:
The disclosure of your activities signals transparency to your stakeholders. Trust in your products and services is strengthened. 
  
         
 
  
 
Employees
 
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4.
 
Improving internal coordination and communication:
Transparent communication and process optimization increases the motivation and enhances the performance of your employees.
 
 
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5. 
 
Positioning the company as an attractive employer:
By addressing the issue of sustainability, you create trust in your company and your business model.
 
 
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6. 
 
Bonding of employees and new recruitment:
Involve your employees in your sustainability journey. This way they will bond with your company.
  
         
 
  
 
Customers
 
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7.
 
Promoting customer loyalty:
With a sustainability report, you show that you are addressing current trends and issues. In this way, you promote customer loyalty and strengthen your customers' trust in your products and services.
  
 
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8. 
 
Increasing your level of awareness:
With a sustainability report, you reach new customer segments that are accessible and sensitized to sustainability issues.
  
 
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9.
 
Increasing your sales:
By retaining existing customers and acquiring new ones, you increase your sales.
  
         
 
  
 
Society
  
 
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10.
 
Increasing the credibility of your corporate activities:
In a sustainability report, you can also present your regional commitment. In this way, you secure social recognition and acceptance.
 

 

     
 

Info-Box: Judicial Background

Since 2017 pursuant (non-financial declaration) to CSR-RUG (Richtlinie-Umsetzungsgesetz*) are capital market-oriented companies with

  • more than 500 employees and
  • total assets of more than 20 million euros or
  • a turnover of more than 40 million euros.

*full title (German): Gesetz zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen in ihren Lage- und Konzernberichten

Published in November 2022 by the EU, the Corporate Sustainability Reporting Directive (CSRD) envisages that small and medium-sized enterprises (SMEs) will also be subject to the reporting obligation from 2027 (for the reporting year 2026) onwards. This is because SMEs are of particular importance in the wake of climate change. By meeting global challenges on a regional level, climate protection targets become achievable. However, as stakeholder calls for transparency in sustainability grow louder, the number of SMEs reporting is already rising steadily.

The EU's 2020 Taxonomy Regulation is intended to strengthen sustainable investments. The disclosure of corresponding data, especially on sustainable products and services, in the form of a sustainability report is therefore also worthwhile from a financial perspective.

  
     

 

What happens next?

If you are interested in writing a sustainability report and need a helping hand from EurA, feel free to send an e-mail to us or click here for more information.

 

Author: Katharina Prontnicki
Dr Denise Ott

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Dr Denise Ott

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