FAQs

The biggest challenges related to ESG reporting are in data collection. Because the reporting scope is so broad, it’s common for the data to be housed in isolated data silos, making it hard to aggregate all the necessary information. The latest directives also enforce digital tagging of data to make it machine readable, something that necessitates specific software with iXBRL tagging functionality.

Because so much of ESG data is intwined with financial data, it’s common for sustainability reporting to be responsibility of the CFO, however this is not a firm rule. Some organizations may appoint an ESG executive to take charge of sustainability disclosures and other ESG initiatives, allowing them to have it as their sole focus. However your organization chooses to tackle it, it is important to remember that ESG is something that the whole company should be invested in.

Greenwashing is the act of using deceptive marketing to falsely present your organization’s values or actions to be more environmentally friendly. This is something that ESG reporting aims to curb, providing transparency into company practices.

As of the European Green deal, many countries across the world have demonstrated a commitment to be climate-neutral by 2050, also referred to as net zero. This is also inline with a wider cultural awareness of the effects of climate change, leading to greater consumer demand for more environmentally responsible companies. Robust ESG reporting is therefore important not only for regulatory compliance but can also make your company more attractive to investors and customers.

If your company is based in the EU, has significant operations in the region or is the parent company of a subsidiary in the region that meets the requirements then you are subject to CSRD.

In the past, ESG disclosures were done on a voluntary basis however the latest frameworks make reporting for in-scope companies compulsory.