Under the EU’s new Corporate Sustainability Reporting Directive (CSRD), thousands of companies will soon have to consider Environmental, Social, and Governance (ESG) issues for the first time. The EU always requires some companies to report their impact on the environment and society across many different fields -from carbon emissions to gender representation. The CSRD will require more detailed ESG reporting and substantially increase the number of companies that must comply with the rules. Only large companies will be affected at first. But by 2027, the rules will expand to include small and medium-sized enterprises (SMEs) -many of which have little understanding of ESG. And it’s not just the EU requiring more social and environmental transparency. While the UK has not enacted legislation parallel to the CSRD, the government has announced plans to follow the EU in regulating ESG ratings systems.
Data protection and ESG
Strong data protection and cybersecurity standards are an ESG “secret weapon.” Getting your organisation’s data and systems in order can have a significant positive impact on your ESG outcomes.
- Efficient data protection strategy means better data management, less data storage, and a lower carbon footprint.
- Data security can help ensure the integrity and confidentiality of your ESG reporting process.
- Protecting data about your customers, employees, and business partners helps reduce the risk of harm and improve stakeholder trust.
- Data protection requires you to manage your company’s affairs in a transparent, responsible, and accountable way.
Benefits of ESG
Reporting itself is not the goal of ESG initiatives; nor the CSRD itself, which is part of an effort to transform the EU into a “modern, resource-efficient and competitive economy with no net emissions of greenhouse gases.” As well as these benefits to wider society, taking ESG seriously can improve results for individual organisations.
- People care about their own environmental impact. Around 73% of “Gen Z” shoppers would be willing to pay a higher price for sustainable products, according to a 2022 First Insight survey.
- Diversity really can be a strength. The most diverse companies are 39% more likely to financially outperform the least diverse companies, according to a study conducted by McKinsey last year.
- Accountability matters. Companies certified under B-Corp, a social and environmental certification scheme, tend to achieve better rates of growth, employee retention, and investment, according to the certification provider’s own research.
As a B-Corp business, HewardMills understands the importance of good governance. We use our expertise to help our clients continuously improve as they grow. Get in touch to discuss how HewardMills can help you implement an efficient and sustainable data protection strategy.
