Extensive ESG reporting requirements take shape in Polish business. The EU’s Corporate Sustainability Reporting Directive (CSRD) sets a timeframe for implementation. For 2024, the report must be prepared by the largest players, currently subject to the NFRD. These are companies and companies listed on EU markets with at least 500 employees. For 2025, the report must be filed by companies with up to 250 employees, a total of €40 million in turnover and/or €20 million in total assets. And from January 2026, the obligation will also extend to small and medium-sized listed companies and other companies. We are, of course, talking about reports on their activities.
Let’s remember that those companies that will already be preparing reports can survey suppliers and inquire about the results of ESG activities. This obligation is only seemingly postponed for small and medium-sized companies. Without keeping up with the trend and requirements, smaller players may lose funding and business partners. The intent of non-financial reporting is to drive changes in strategy for companies – large, medium and small.
It is now changing the ways in which companies create their marketing and business strategies. This is because it forces the inclusion of pro-environmental, pro-social and economic governance values, which until now have been partially or wholly ignored (especially by small players).
Expectations of the environment - investors, business partners and customers
ESG is still wrongly understood as CSR, with which it has much in common. CSR, i.e. Corporate Social Duty, which numerous medium and huge ventures can gloat of, centers on social and charitable exercises. ESG, on the other hand, takes into consideration natural, social and administration components. CSR arrangement covers subjective exercises, and ESG covers quantitative exercises. ESG measures and analyzes the affect of trade and item operations on the environment.
You can drive out Nature with a pitchfork, but she keeps on comming back
Companies that want to be perceived as caring about the community and the environment must consider the listed elements in their operations:
Environment – Monitor impacts on nature and usage of natural resources, such as greenhouse gas emissions, energy consumption (especially from non-renewable sources), carbon footprint, water emissions, waste. Pro-environmental marketing activities that are not supported by data will be considered greenwashing (subject to a penalty of up to 200% of the benefits derived from the sale of a product labeled as eco).
Social responsibility – Relationships with employees, customers, investors, local communities. The basis of these activities is education and communication. In terms of reporting, on the other hand, support for diversity, equalization of opportunities for women and men, e.g. in terms of wage disparity, work life balance, observance of employee rights, enforcement of RODO and protection of personal data are reported.
Corporate governance – Refers to management actions and transparency of operations in terms of tax policy, anti-corruption, compensation and shareholder rights.
Already ESG reports are prepared in Poland by such companies as Lidl, Biedronka, Wedel, Ciech and investment funds, among others.
Sustainability opportunities and risks
Sustainability reports will be part of the business report. Pro-social, pro-environmental and economic governance aspects will create new value for companies. For businesses, investing in ESG is a strategic action. It’s not just about a better image and reputation, but also an opportunity to increase innovation, efficiency by looking for new solutions, services. It also opens up the possibility of taking advantage of better rates or discounts for environmentally friendly activities. When investing in ESG, remember that it is a long-term activity, and even a kind of commitment for future generations.
The eco-smash and reliability of ESG data
Preparing a reliable report on ESG activities requires preparation, collection of relevant data, investment of time and financial investment. The most work lies ahead for those who have not reported ESG at all. PwC’s 2022 research indicates that as many as 87% of respondents believe that corporate reports currently contain greenwashing elements. So they are more of a marketing reflection of vision and mission, or even an eco-lie. Climate Strategies Poland Foundation will list several different methods of greenwashing, including:
- Greencrowding, or using big numbers to emphasize environmentalism;
- Greenlighting, or highlighting one eco-friendly feature;
- Greenshifting, or shifting responsibility to the consumer;
- Greenlabeling, or labeling “bio,” “eco,” “natural for the environment” for products that are not green;
- Greenrinsing, i.e., changing ESG goals when previously set goals are unachievable;
The CSRD is changing the way companies create their business and marketing strategies. It thus opens the discussion of environmentally and socially responsible action to all market players.
