Only a tiny fraction of Czechs know what the acronym ESG means. About a fifth of the Czech population has heard the words Environment, Social and Governance, which are essential for the sustainable development of companies, organizations and society as a whole. This is according to the latest Ipsos survey for the Social Responsibility Association. Awareness of ESG is slightly better among companies, but there is also room for improvement.
Three-quarters of companies know the concept of ESG, less than half of companies have identified ESG as an important topic. And only a quarter of them have specific plans to achieve carbon neutrality, for example. Awareness of the importance and importance of ESG among the public and companies is intended to improve the newly emerging ESG Rating. For the first time ever, it will comprehensively evaluate which domestic companies are really thinking about their impact on the environment and monitor social values honestly and transparently. The ranking is being prepared for the Association of Social Responsibility by the world-renowned business university program CEMS from the University of Economics in Prague.
“Our common goal is to make it easier for organizations to implement individual ESG criteria into their strategies. Educate Czech society in all areas affected by non-financial reporting, and at the same time acquaint it with examples of good practice of companies that are actively involved in sustainability, ”explains Lucie Mádlová, founder and director of the Association of Social Responsibility.
Registration in the ranking will last until the end of June. This year, the ESG Rating is a new strategic category of the SDGs Awards, a prestigious sustainability award that the Association of Social Responsibility is organizing for the sixth time this year.
Who do ESG reports cover?
Publicly traded companies with more than 500 employees must report on sustainability and social responsibility activities under the 2014 NFRD. However, a new European Corporate Social Responsibility Directive (CSRD) has been prepared to order non-financial results to be reported to all publicly traded companies and all companies with more than 250 employees and a turnover of at least 40 million euros or assets of more than 20 million euros, even those that are not publicly traded. The new directive also provides for the introduction of reporting for small and medium-sized enterprises in the longer term. In addition, the new directive will introduce stricter rules for the audit of non-financial information.
When the obligation to issue the first report under this directive will be introduced is still under negotiation. According to the original proposal, the year should be 2024, with the results achieved in 2023, but discussions are currently taking place at the level of the European institutions, which are considering a postponement.
“Although at first glance it may seem that even a delayed date provides enough time, more responsible companies are trying to prepare well in advance. Setting credible and achievable ESG strategies and goals, collecting relevant data, setting up processes, ESG reporting, or evaluating EU taxonomy requirements is not a matter of weeks or months, ”adds Alice Machová, EY Czech Republic’s Managing Partner.
“Non-financial reports are already produced mainly by companies with an overlap into Western markets, because ESG values are required by local customers and investors. Therefore, the companies we compile ESG Rating will measure both companies for which non-financial reporting is already mandatory and those for which it will be mandatory, ”explains Ladislav Tyll, academic head of the CEMS program, which prepares the first Czech ESG Rating for the CSR Association. methodology.
The main criterion is honesty and transparency
“The goal of the rankings and directives is not to praise organizations that claim to be absolutely green and socially responsible, but to appreciate especially those companies that communicate honestly and transparently about their environmental impacts and societal values,” says Tyll.
Lucie Mádlová from the Association of Social Responsibility adds that the planned rating is intended to positively motivate companies across sizes to publish non-financial data according to ESG criteria. “We want to show that collecting non-financial data will clearly pay off for the company in the long run, as they can serve to make the operation of the company as such more efficient,” concludes Mádlová.
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