The acronym ‘ESG’ stands for ‘Environment, Social, Governance’ and is primarily used in the (international) financial world. It covers issues like CO2 emissions, exploitation, tax evasion, and corruption. These are matters impacting the society in which a company operates, but they aren’t directly or clearly reflected in financial annual reports. ESG reporting focuses on ‘non-financial’ figures, indicating a company’s long-term vision or management, and its sustainability. Reporting on sub-areas such as CO2, circular economy, safety, or child labor can be part of it.
Specific legislation aimed at ESG reporting already exists. The Corporate Sustainability Reporting Directive mandates all large companies to report non-financial performances from 2023 and undergo independent audits. This applies to companies with 250 or more employees and a turnover of over 40 million, or a balance sheet total of more than 20 million euros. It’s expected that such legislation will soon apply to smaller organizations as well.
Smartbooks already offers the capability to collect and report relevant ESG data.