From 2025, legal guidelines will require certain companies to prepare a sustainability report. Sustainability expert Daniel Reichert, head of the T&O Group's Lean & Green department, explains why companies should address the issue of sustainability in advance and what the benefits are for companies.
A sustainability report is an additional burden and a bureaucratic monster, especially for small companies.
Yes, the legislator was aware of that. That's why only companies with at least 250 employees, a net turnover of at least 50 million euros or a balance sheet total of at least 25 million euros are affected.
Despite this, smaller companies have also caused a stir because of such a report.
The so-called trickle-down effect describes the fact that nowadays even smaller companies have to keep up with larger ones. Due to growing demand, customers are forcing them to comply with the reporting obligation even without a legal requirement. More companies therefore see themselves under pressure. Added to this is the Supply Chain Act, which also demands more transparency in the sustainability of supply chains.
So is the green path the savior?
The list of advantages of a sustainability report is long. If customers ask about specific measures, for example, there are clear answers. Furthermore, those responsible demonstrate that they have already dealt with the topic, know their own weaknesses and strengths and are planning for the future. All of this has a positive effect on their public image.
An additional bonus: Sustainability is playing an increasingly important role for financiers and lenders - if you live it and can prove it, it's easier to get a bank loan.
Nevertheless, many entrepreneurs are put off by the jungle of sustainability.
Just get started! Start taking the first small steps as early as possible. This guarantees a head start in terms of knowledge before a legal obligation suddenly appears on the doorstep. A first, uncomplicated start would be to take part in a workshop, for example.
Let's assume I am one of those required to report. What do I have to do?
The European Sustainability Reporting Standards (ESRS) as part of the Corporate Sustainability Reporting Directive (CSRD) determine what companies have to include in a sustainability report. The starting signal is given with a materiality analysis: a close observation of the company structures reveals which opportunities and risks arise in relation to sustainability and which areas have the greatest impact on the environment and people. The analysis clarifies which data the report must cover. CSRD and ESRS require social sustainability in addition to key topics such as climate friendliness, protection of ecosystems and resource-conserving management. What measures does the company use to implement internal safety? How important is the quota for women or diversity? In short: sustainability means more than just being environmentally friendly.
What personnel costs does a company have to reckon with?
Governance structures provide the necessary support for the sustainability report. Internal or external auditors of measures, data collection and evaluation ensure the realization and measurement of progress. It is important not to delegate tasks to individual people, but to have permanent managers. A large network of contacts in different areas helps to coordinate sustainability efficiently.
But are the costs really worth the return?
Unfortunately, companies often still drastically underestimate climate risks. It is often only the preparation of the report that provides the impetus to deal with possible climate damage and how to combat it. Many companies do not even realize that their own departments could be affected in the future.
And then less sustainable products come from China at a fraction of the price.
Some companies question their entire business model after an analysis. If they source a large proportion of their imports from China, for example, they have to work out any negative effects, future risks and make appropriate adjustments. Most companies grow with their tasks. Many companies initially shy away from the effort and costs and only want to cover essential points. However, this usually changes very quickly. After a while, companies take a liking to the method, want to learn more and more and incorporate the topic of sustainability into their corporate DNA.
