ESG – sustainability advisory services

ESG stands for Environmental, Social and Corporate Governance, the 3 areas that reflect an organisation's impact and commitment to sustainability.

ESG is increasingly important to an organisation's clients, investors and employees. It affects both the value and competitiveness of a company and its image.

ESG is intended to help companies define and build strategies in such a way that, among other things, they minimise their negative impact on the natural environment and thus strive for sustainable development, respecting the interests of society and local communities as well as their own employees.

ESG reporting, i.e. non-financial reporting on corporate sustainability, is a new obligation under the provisions of the EU CSRD (Corporate Sustainability Reporting Directive).

ESG reports for 2024 will first be prepared in 2025 by public interest entities, i.e. Large entities or large consolidating entities of a large group that is a public interest entity if it exceeds the criterion at the balance sheet date:

• 500 employees on average during the financial year.

Then, in the following years, the new obligation is to gradually cover smaller and smaller companies. Reports for 2025 in 2026 will be prepared by theOther large entities which exceed two of the three criteria at the balance sheet date exceed two of the three criteria: i) employing more than 250 people, (ii) balance sheet total of EUR 25 million (iii) net sales revenues exceeding EUR 50 million. In 2027, non-financial reporting for 2026 will include, among others, quoted small and medium-sized enterprises, small and not very complex credit institutions and captive insurance. For accounting periods beginning before 1 January 2028, these undertakings may choose not to include a sustainability report in their management report. However, in that case, the enterprise shall briefly state in its management report the reason why a sustainability report has not been prepared.

The main objective of ESG reporting is to identify all non-financial risks and opportunities integral to a company's day-to-day operations.

However, ESG is not only about mandatory non-financial reporting, but also about strategic change. Implementing voluntarily an ESG strategy in an organisation as an integral part of the overall business strategy is important. This action can significantly improve a company's relationship with external partners, banks (especially with regard to obtaining financing or obtaining financing on preferential terms), attract talent, reduce risks, increase competitive advantage both domestically and internationally. Non-mandatory reporting may also be required by parent companies from groups of companies for mandatory reports produced by parent companies or groups of companies in general.

ESG reporting even for large companies can bea considerable challenge, especially when it comes to preparing a report for the first time. On the one hand, non-financial reporting is another obligation for business, while on the other hand, the area of sustainability is already recognised as a key area in achieving market competitiveness. It is therefore worth preparing well for the implementation of an ESG strategy and treating it as a step towards increasing the company's responsibility for its impact on the environment and surroundings.

We are part of the international Crowe network, one of the largest accounting and consulting networks in the world. We provide clients with professional audit, tax, advisory and consulting services. We have now added ESG consulting to our portfolio of services.

As part of our ESG advisory service, we will help your organisation with the following areas:

ESG audit

• analysing the ESG materiality for the organisation and their stakeholders
• reviewing your organisation's initiatives in terms of reporting on and pursuing sustainability
• assessing your ESG activities in terms of regulatory compliance
• auditing your business processes for compliance with your ESG strategy
• auditing non-financial reports

ESG strategy

• developing an ESG strategy
• preparing ESG documentation, including ESG policies
• aligning current practices and processes with ESG standards and requirements

ESG reporting

• identifying which data are to be collected and analysed in order to prepare for the non-financial reporting obligation
• preparing a description of the process of collecting non-financial data
• analysing the scope of reporting
• providing support in defining metrics to measure the effectiveness of ESG activities
• providing support in calculating the organisation's or product`s carbon footprint
• support in drafting non-financial reports

ESG training

• training of management and staff in sustainability awareness
• advising on ESG communication