In this series, we are ‘driving’ through the world of ESG compliance. From understanding its importance to exploring its benefits and tackling challenges, we will help you navigate the evolving landscape of ESG sustainability regulations.
First stop: What is it and Why is it essential?
ESG explained
ESG stands for Environmental, Social, and Governance. These three pillars monitor and measure a company’s sustainability performance. ESG is a worldwide concept. What began in the early 2000s as Corporate Social Responsibility (CSR) has grown into a global movement, gaining significant traction among the largest companies in the world.
Breaking down the three pillars
Each pillar in ESG focuses on a different aspect, ensuring a comprehensive approach to evaluating a company’s impact.
- Environmental focuses on how companies address environmental issues like carbon emissions, waste management, and resource efficiency.
- Social examines how businesses impact employees, communities, and consumers, focusing on diversity, inclusion, and human rights.
- Governance looks at corporate leadership, ethical behaviour, and transparency in decision-making.
Europe’s ESG movement
While ESG has gained traction globally, it specifically gained momentum in Europe with the launch of the European Green Deal in 2019 and the Fit For 55 regulation package from the European Commission in 2021. These initiatives led to the creation of critical legislation, such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). These are no longer just policies on paper, but an integral part of compliance. They are shaping how businesses in Europe operate and compete.
ESG: it is here to stay
Despite ongoing debates about who needs to report under the CSRD or bear the compliance burden for the CSDDD, one thing is clear: these regulations are not temporary. ESG compliance has become a permanent fixture in the business landscape. It’s not just about meeting legal requirements anymore; it’s about embedding sustainability into the core of your business strategy.
A strategy for growth
At Connex, we see ESG compliance as more than just ticking boxes. With the requirement to comply with the CSRD by 2026, we face challenges and opportunities. Internally, this has encouraged the growth of our knowledge and capabilities. Externally, it positions us to create value, build trust, and strengthen a competitive edge. Businesses prioritising ESG compliance today position themselves for sustainable growth and long-term success.
Stay tuned for the next stops on our road to ESG compliance!