Environmental, Social and Governance (ESG) reporting

The historic UN Paris climate agreement will be ten years old in 2025. The work of putting this intergovernmental agreement into action has become much more intensive in the past year. The government of Ireland has committed to reaching net zero emissions by 2050, with an interim goal of reducing harmful emissions by 51% by the year 2030. At the same time there is growing pressure on all companies to take responsibility for their social and governance practices reflected in consumer preferences, anti-greenwashing campaigns, employee engagement and investor activism.

Environmental, Social, and Governance (ESG) strategy and reporting are a holistic framework for assessing and taking control of an organisation's non-financial activities, and addressing these concerns in an open and transparent manner has become a political and social necessity.

In 2023, the European Union adopted a significant new piece of legislation, the Corporate Sustainability Reporting Directive (CSRD), which will compel most listed companies in the Union to disclose their ESG activities over the next three years and have these reports independently assured. Alongside CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), which is still in negotiation, will mandate large companies to align their corporate strategies with the Paris Agreement climate goals among other requirements. These and other legislative and regulatory initiatives will have a profound influence on the entire economy.

Many organisations not subject to mandatory reporting requirements like those discussed above are choosing to voluntarily set ESG strategies and disclose their ESG data. There is a wide range of frameworks available to assist those organisations in reporting in the most appropriate manner for their activities.

Those companies and organisations who view ESG as an opportunity to lead in their sector will thrive in this new business environment. While traditional financial reporting and auditing has developed over many decades, ESG reporting and assurance is a rapidly developing field requiring in-depth subject matter expertise and up-to-the-minute understanding of the key issues.

Crowe has been monitoring these developments closely and has been advising clients on their emerging obligations, assisting with setting out ESG strategies and developing ESG reporting systems. We have recently established an ESG Centre of Excellence which includes senior staff from across the firm, ensuring consistency and the highest standards in our advice and support for clients and a rigorous, tried and tested approach to all ESG assignments that arise whether through audit, advisory or tax.

If you would like to know more about how we can support your organisation with your ESG journey, please contact [email protected].