Sustainability – a lot of work, but also a great opportunity

Sustainability is one of the major topics of our time and increasingly affects businesses. More and more stakeholders are in need of a wide range of information on the topic too. There is an uptick in banks including these values in their risk analysis and therefore in loan assessment too. Private customers want to know whether products or services are produced or offered according to certain sustainability standards. Industrial customers, in turn, need data such as emissions information to calculate h their products. (New) employees, if they have the choice, are more likely to choose a "sustainable" company as an employer for a similar job offer.

It’s clear that stakeholders have a variety of needs regarding information on sustainability. Most companies try and meet this need by publishing a sustainability report. There are recognised standards such as the German Sustainability Code (DNK) or the Global Reporting Initiative (GRI), but apart from large, capital-market-oriented companies with an average of more than 500 employees, companies have not been required to provide sustainability information. Moreover, they did not have to adhere to any standard but could publish their sustainability report in alignment with a standard or entirely without a standard. As a result, there are many sustainability reports, but they are very difficult for stakeholders to compare.

This is now changing: Since 2023, the Corporate Sustainability Reporting Directive (CSRD) along with the European Sustainability Reporting Standards (ESRS) have gradually become mandatory for more and more companies. The following table (Own representation based on: Directive - 2022/2464 - EN - CSRD Directive - EUR-Lex (europa.eu))outlines the implementation periods.

Finacial Year	Reporting Year	Companies	Criteria (two out of three met)
2024	2025	Limited liability, capital-market-oriented companies with more than 500 employees (on average)	Balance sheet ≥ €25 million Revenue ≥ €50 million Ø 250 employees
2025	2026	Limited liability companies, credit institutions and insurance companies	Balance sheet ≥ €25 million Revenue ≥ €50 million Ø 250 employees
2026	2027	Listed SMEs, small and non-complex credit institutions, in-house insurance companies	Balance sheet > €450.000 Revenue > €900.000 Ø > 10 employees
2028	2029	Non-EU companies	Net revenue > €150 million within the EU At least one EU branch or subsidiary present

More and more small and medium-sized enterprises will also have to produce sustainability reports. This is partly because of their position within the supply chain, as large (obligated) companies have to report along their entire value chain, they therefore need data from their suppliers. A further push factor is because of the increased interest of stakeholders in sustainability information, as mentioned previously.

The ESRS are intended to ensure that obligated companies publish comparable and transparent sustainability information, which is then again audited by an auditor. The standards are based on the "trinity" of sustainability: environment, social, and economic. So far, the EU has published twelve sector-independent standards: two general, five environmental, four social, and one governance standard. In total, there are more than 1,200 data points, that is questions that companies need to answer. Whether a company has to provide information on a standard depends on its materiality. This is determined in advance through a materiality analysis. A topic is considered material if the impacts of the company’s operations on the sustainability topic (inside-out perspective) or the financial impacts of the sustainability topics on the company’s operations (outside-in perspective) are deemed significant.

The reporting process makes change inevitable. The intensive engagement with the various sustainability topics within sustainability reporting can lead to adjustments necessary being made within the company. In order to get all employees on board with such changes, it is worthwhile sensitising employees to the topic of sustainability:

• What is sustainability beyond turning out the lights and separating the rubbish?
• Is sustainability more than just CO₂ and climate protection?
• What is ecological sustainability?
• What is social sustainability?
• What is economic sustainability?
• Why does sustainability concern each one of us?
• What concrete steps can we take at a company level to be more sustainable?

Raising awareness among employees on the topic of sustainability need not be another headache. It can be done through on-site workshops, however, these are usually very time-consuming and costly. Therefore, the DSN GROUP and the auditing firm Clostermann & Jasper Partnerschaft mbB have teamed up to develop suitable eLearning courses for you. The result is four modules that answer the above questions and provide a solid foundation in understanding sustainability.

Compared to a workshop, eLearning courses offer the significant advantage that all company employees can acquire the learning content at their own pace and at a time that suits them. This way, you can quickly achieve a uniform level of knowledge in your company on the most important topics and questions of sustainability.

Use the topic of sustainability, regardless of reporting obligations, as an opportunity to initiate optimise and modernise processes within your company and to be part of a positive development for everyone.