As described, in the area covered by our NEXT concept, we find ourselves in tomorrow’s world, the world of future strategies. Since the publication of the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy Regulation (Article 8), every company has known what is in store for them in terms of mandatory sustainability reporting by no later than 2026. However, this does not mean that companies know how to fulfil these regulatory requirements. That is why we help our clients to meet the requirements while avoiding a negative impact on their earnings. The goal should be to integrate environmental (E), social (S) and governance (G) issues to ensure that profitability is optimised as quickly as possible. We strongly recommend taking a holistic approach in this context. Rather than merely integrating the three very different and sometimes contradictory E, S and G dimensions, we prefer an approach that understands and addresses sustainability in four dimensions.
A FOUR DIMENSIONAL APPROACH TO SUSTAINABILITY
Firstly, by taking a strategic and value-oriented perspective. This means that transformations driven by ESG considerations need new business and organisational models to boost resilience, economic performance and corporate value.
Secondly. This requires suitable technologies and partner networks that understand ESG topics as overarching business analytics issues, and therefore as data management tasks.
Thirdly. A data management and control system that is as standardised as possible also aids compliance with regulatory and reporting standards. However, the requirements of stakeholders and the capital market must also be satisfied.
Fourthly. In order to fulfil the three requirements outlined above, the issue of sustainability or ESG must be understood and addressed at the top management level. That is because these are classic governance and organisational issues. Specifically: the definition of internal processes, controls and structures to ensure fair conditions throughout the value chain.
So much for the management and control aspects of ESG issues. Now we need to address the substance. All essential ESG initiatives should have two key objectives. Firstly, the continuous improvement of the environmental balance in terms of climate change and climate protection. Secondly, achieving greater justice and social diversity.
Whatever you think about the detail of these goals (or the proposed ways to achieve them), we recommend that every company takes them seriously and tackles them head on. Here’s a quick overview of the associated benefits: