Study of the Novel European Sustainability Reporting Standards (ESRS) – changes and impact on the case company
Koskelainen, Maria (2024)
Koskelainen, Maria
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024051512261
https://urn.fi/URN:NBN:fi:amk-2024051512261
Tiivistelmä
The main goal of this study is to review the new European Sustainability Reporting Standards (ESRS) mandated by the Corporate Sustainability Reporting Directive (CSRD) and answer the research question. The purpose of the study is to describe the main changes, challenges, and opportunities that have emerged with ESRS in the current sustainability reporting practices of the commissioning company. The structure, core topics, and requirements of the ESRS to be compared with the Global Reporting Initiative (GRI) used by the company. In addition, the study aims to identify the main strategic steps that contribute to the company's transition from one standard to another. In addition, the main benefits of ESRS for the company in question to be presented.
To control business impacts and improve sustainability reporting, the European Commission established the ESRS as an obligatory set of standards. The main goal of the new European Sustainability reporting standards is to enhance comparability and transparency in the sustainability reporting field from the year 2025. Over the past years, many companies have started to publish voluntary sustainability reports to reveal their environmental, social, and governance (ESG) performance. However, a lot of businesses have only used sustainability reports to present the positive aspects of their operations and have avoided addressing the negative ones. Consequently, companies often misrepresent their sustainability impacts, which leads to greenwashing. In the future, companies, such as the case company, will be required rather than encouraged to publish well-structured ESRS sustainability reports with requested information. The company might face several challenges, which include stringent reporting requirements and difficulties in data collection. Together with challenges, there are also upcoming opportunities. These include increasing accountability, engagement in different areas of sustainability, benchmarking, and the possibility of global expansion.
In order to answer the stated research question, the author focused on analyzing standards, related articles, and consultant publications, and conducting semi-structured interviews with specialists in the reporting field. The results of the analysis and interviews indicate that GRI may serve as a suitable stepping stone in the transition to ESRS, as 58% of the requirements are similar to ESRS. However, the affected company needs to prioritize early engagement to successfully shift to ESRS. Senior management involvement and a focus on data collection with double materiality assessments are essential first steps. In addition, to be able to report on time, it is crucial for a company to understand the importance of this topic and to invest resources in this area. By adopting these steps together with suitable strategies, businesses can navigate the complexities of ESRS reporting, and strengthen their internal and external collaboration and capabilities. Moreover, the implementation of ESRS not only promotes accountability and transparency among stakeholders but also lays the foundation for a more resilient and sustainable future in the business sector.
This thesis was commissioned by Sustera, previously called Raksystems, Green Building Services.
To control business impacts and improve sustainability reporting, the European Commission established the ESRS as an obligatory set of standards. The main goal of the new European Sustainability reporting standards is to enhance comparability and transparency in the sustainability reporting field from the year 2025. Over the past years, many companies have started to publish voluntary sustainability reports to reveal their environmental, social, and governance (ESG) performance. However, a lot of businesses have only used sustainability reports to present the positive aspects of their operations and have avoided addressing the negative ones. Consequently, companies often misrepresent their sustainability impacts, which leads to greenwashing. In the future, companies, such as the case company, will be required rather than encouraged to publish well-structured ESRS sustainability reports with requested information. The company might face several challenges, which include stringent reporting requirements and difficulties in data collection. Together with challenges, there are also upcoming opportunities. These include increasing accountability, engagement in different areas of sustainability, benchmarking, and the possibility of global expansion.
In order to answer the stated research question, the author focused on analyzing standards, related articles, and consultant publications, and conducting semi-structured interviews with specialists in the reporting field. The results of the analysis and interviews indicate that GRI may serve as a suitable stepping stone in the transition to ESRS, as 58% of the requirements are similar to ESRS. However, the affected company needs to prioritize early engagement to successfully shift to ESRS. Senior management involvement and a focus on data collection with double materiality assessments are essential first steps. In addition, to be able to report on time, it is crucial for a company to understand the importance of this topic and to invest resources in this area. By adopting these steps together with suitable strategies, businesses can navigate the complexities of ESRS reporting, and strengthen their internal and external collaboration and capabilities. Moreover, the implementation of ESRS not only promotes accountability and transparency among stakeholders but also lays the foundation for a more resilient and sustainable future in the business sector.
This thesis was commissioned by Sustera, previously called Raksystems, Green Building Services.