This Friday, Margrethe Vestager will make an appearance in Berlin. Not, as usual, as Vice-President of the EU Commission, where she has just resigned until further notice. But as a candidate: Vestager is seeking the support of the German government for her bid to become President of the European Investment Bank (EIB).
Her fiercest rival, Nadia Calviño, had already visited Berlin last week. The Spanish economy minister is held in high esteem by both Chancellor Olaf Scholz and Finance Minister Christian Lindner. Both already know her from the meetings of the EU finance ministers, where her voice carries weight. The former Budget Director General’s expertise in the Commission is undisputed and makes up for some concerns about her Spanish origin, which certainly exist in Berlin government circles.
Vestager will therefore have to work hard to convince Scholz, Lindner and Habeck. She is in favor of gearing the EU’s house bank more toward riskier financing of high-tech projects. Calviño, on the other hand, is more in favor of the traditional approach of financing low-risk large-scale projects, such as infrastructure. State Secretary for Economic Affairs Sven Giegold had also conveyed wishes regarding the content. The coalition partners will probably also depend on the corresponding commitments of the candidates as to whom they will support.
The picture is still diffuse: Hardly any government has yet clearly signaled who it favors to succeed outgoing EIB President Werner Hoyer. Paris is also keeping a low profile. Belgian Finance Minister Vincent van Peteghem, as the current Chairman of the EIB’s Board of Directors, must now decide whether he feels the time is ripe to put the matter up for discussion at the informal Ecofin meeting in Santiago de Compostela at the end of next week.
What are the CO2 emissions for a seat on a bus, train or business class flight from Hamburg to Milan? So far, there have been many methods of calculating this, and the results vary widely. Providers of transport services are likely to pick the method that is most favorable to them for calculating emissions. This involves a lot of greenwashing, and the comparability of the data is low.
The Commission is now proposing a standardized framework to report greenhouse gas emissions from transportation services. Count Emission EU is what the framework is called. It is important to the Commission that the emissions are well-to-wheel emissions, meaning that the analysis also includes the processes required to provide the energy carrier. The proposal is part of the Greening Freight Package presented by the Commission on July 11.
The basis for the data is to be ISO 14083:2023. The standard is internationally accepted and therefore lends itself to mapping transports across EU country borders – also for combined transport (CT), which involves several modes of transport. The database that reports the emissions is to be located at the European Environment Agency (EEA). The EU agency is also to be responsible for checking the quality of the data provided by the transport service providers.
The transport sector accounted for 26 percent of all greenhouse gas emissions in the EU in 2020. This also includes emissions from shipping and international aviation. Road transport alone accounts for 20 percent of EU emissions. There are no plans to also cover emissions of air pollutants as well as emitted noise.
Participation in the reporting of CO2 emissions is voluntary. If a company decides to participate, it must be prepared to have its data and measurement systems verified. However, this obligation only applies to large companies. As the verification imposes further bureaucratic burdens, SMEs are not obliged to participate.
Markus Ferber (CSU), economic policy spokesman for the EPP Group, attaches importance to the fact that participation in Count Emissions EU is and remains voluntary for transport service providers: “Count Emissions EU must not provide the data basis for possibly banning certain transport services in more far-reaching regulatory steps.”
There is opposition to this from the combined transport industry association. Ralf-Charley Schultze from the organization International Union for Road-Rail Combined Transport (UIRR) refers to the pending legislative proposal of the Commission for combined transport: “The regulation of combined transport only makes sense if the emissions of the different modes of transport are objectively reported and thus comparable.”
For this, it is imperative that participation in Count Emissions EU is mandatory for providers, Schultze told Table.Media. Originally, the proposal on combined transport with the Greening Freight Package was to come in July.
Relief, but no all-clear: The debate about a possible withdrawal of the Open Society Foundation (OSF) of billionaire and patron George Soros has taken a new turn. In August, Alexander “Alex” Soros, the son of the founding father, had announced that the Soros Foundation’s work in Europe would be significantly scaled back.
This would have meant the end for many OSF employees, but also a severe blow for hitherto generously funded non-governmental organizations in the EU. The withdrawal would be an almost historic break with Soros’ commitment to civil society, which he began more than 30 years ago in his native Hungary.
The announcement comes at an inopportune time and endangers many projects, warned Alberto Alemanno, an EU expert from Paris who is himself involved in civil society. Now conservative and religious organizations could step into the gap.
Transparency International also expressed concern: “An abrupt withdrawal from Europe at a time when populism is on the rise and the rule of law is under threat seems perverse and could undo much of the gains that have been made,” said TI Europe Director Michiel van Hulten.
But now Alex Soros is half backing down: “We will not leave Europe,” he declared in a guest article for Politico. Reports of a withdrawal, he said, are misleading. “We are not leaving. Europe remains of great strategic importance to OSF’s work,” Soros Junior said.
However, since the war in Ukraine, the political balance in Europe has shifted eastward. The future will no longer be decided in Paris and Berlin alone, but also in Kyiv, Warsaw and Prague.
The Soros Foundation intends to shift its priorities eastward accordingly. Work in Ukraine, Moldova and the Western Balkans is to continue. Aid for the twelve million-strong Roma communities in Europe is even to be expanded “dramatically.” Alex Soros also pledges his support for the Central European University (CEU), which Hungary’s right-wing head of government Viktor Orban has driven out of the country.
However, these oaths of allegiance, with which Soros apparently also reacted to protests by OSF employees and concerns of investors, could not dispel all doubts. According to Transparency International, the announcements must first be examined, and the situation remains unclear.
The EU Commission is also playing hard to get. It maintains an intensive exchange with the Soros Foundation. The authority’s transparency register lists meetings with Björn Seibert, the head of cabinet of Commission President Ursula von der Leyen, and with Commissioners Paolo Gentiloni and Věra Jourová. Vice President Margrethe Vestager met personally with Soros Senior in 2022. But when asked, the EU authority would not comment on the future of the cooperation.
The European Parliament expresses concern. “The withdrawal of the Open Society Foundations from large parts of Europe comes at a critical moment when we are witnessing a worrying shift to the right in some of our member states,” says Parliament Vice President Katarina Barley (SPD). The OSF has made a crucial contribution to supporting pro-European civil society in Europe over the years – for this reason alone, its departure is a loss.
“As a European Union, we must recognize and actively address emerging gaps,” Barley said. “It is our shared responsibility to keep alive and defend the values on which our Union was founded.”
Green MEP Daniel Freund, who used to work for “TI” himself and specializes in rule of law issues in Parliament, expressed similar views. He calls for more support for civil society from the EU Commission: “There is no question that the EU needs to spend more money on protecting democracy and the rule of law,” Freund said. The financial situation of civil society is likely to “deteriorate enormously” as a result of Open Society’s withdrawal. The EU Commission would therefore still have to expand its funding.
This could be difficult. After all, the EU budget has been exhausted; before the summer break, the head of the authorities, von der Leyen, demanded a substantial additional payment from the EU states. Moreover, a lot of money is at stake. In 2021, the Soros Foundation spent $209.4 million on projects in Europe and Central Asia, according to its own figures.
The Digital Market Act (DMA) has reached another milestone. There have been a few surprises in the designation of gatekeepers. For one thing, the Commission has only assigned gatekeeper functions to six companies instead of seven. For another, cloud services are not included. In addition, the Commission has launched several market investigations.
The six gatekeepers are Alphabet, Amazon, Apple, Bytedance, Meta and Microsoft. Samsung, contrary to expectations, is not among them. The designated companies are called gatekeepers because they offer central platform services through which business operators gain access to consumers in the EU. The DMA is intended to help create fair competitive conditions for all companies.
Major platform operators must now play by European rules, Internal Market Commissioner Thierry Breton said in a statement posted on X. “No online platform can behave as if it is too big to care,” he announced. “We will be very, very strong on enforcement.” In doing so, he countered fears that the commission might be overwhelmed by the task.
In total, the Commission identified 22 core platform services (CPS) from the six gatekeepers. The companies now have until March 2024 to ensure the obligations under the DMA for each of their designated CPSs. They already have to implement some things immediately, such as installing a compliance officer and notifying the Commission of planned mergers.
In parallel with the designation, the Commission has launched four market investigations. Apple and Microsoft had indicated in July that their services iMessage and Bing, respectively, Edge and Microsoft Advertising did not meet the thresholds of the DMA. The Commission is now looking into that. Under the DMA, companies have the opportunity to cogently rebut their designation. These quantitative investigations should be completed within five months.
In another market investigation, the Commission is examining whether Apple’s iPad operating system should be counted among the gatekeepers even though it does not meet the thresholds. This qualitative investigation may take up to twelve months.
Although the mail services Gmail and Outlook, as well as the Samsung Internet browser, meet the thresholds of the DMA, the Commission did not classify these services as CPS. The operators Alphabet, Microsoft and Samsung had presented sufficiently reasoned arguments for doing so, the Commission said. Accordingly, it did not classify Samsung as a gatekeeper.
Reactions from the affected companies were mixed: “We accept our classification as gatekeepers” was said at Windows and Linkedin, said a Microsoft spokesperson. The company also welcomed the Commission’s decision to launch a market investigation into Bing, Edge and Microsoft Ads. Here, Microsoft is acting as a “challenger in the market,” they said. Google, Meta and Amazon said they were still reviewing the decision.
Tiktok, on the other hand, dismissed the classification as wrong. “We are disappointed that there was no market investigation prior to this decision and are reviewing our next steps.” Apple, in turn, pointed to security risks. The company said it feared the spread of computer viruses should users increasingly install applications from sources other than Apple’s own App Store.
Consumer advocates said the designation is an important step toward better functioning digital markets for consumers. “For too long it has been easy for tech giants to manipulate markets, to the detriment of consumers who have not had easy access to alternatives to big tech,” said Ursula Pachl, BEUC’s deputy director general. She said she expects the Commission to vigorously enforce the DMA. Consumers would also have the option in the future to collectively sue a company if it violates the rules. This is “a great development,” she said. vis
The European Sustainability Reporting Standards (ESRS) mark the beginning of a new era. These uniform Europe-wide reporting requirements are intended to and will significantly improve production and working conditions through greater transparency: Concrete specifications and better controls should help prevent human rights violations, corruption and greenwashing in the future. On July 31, 2023, the European Commission adopted the final delegated act after an extensive public feedback period.
After processing more than 600 comments, twelve finalized ESRS now remain, divided into two overarching standards on sustainability issues and ten topic-specific specifications on environmental, social and governance (“ESG”) issues. This is an important development, as companies have so far hardly had to document their commitment to ESG issues – unlike in the financial sector, for example. This is changing with the ESRS, which as part of the EU Corporate Sustainability Reporting Directive (CSRD) determine the sustainability reporting of over 50,000 companies.
To make it easier for companies to switch to functional reporting, the European Commission has made adjustments. This gives companies more time to submit particularly challenging information for the first time and to establish routines within complex supply chains. Finally, fair working conditions and more sustainable production require better agreements and clear coordination.
The EU Commission is making further concessions to companies: it has renegotiated the question of materiality for individual disclosure requirements and converted some mandatory disclosures into voluntary disclosures. In this way, too, it aims above all to reduce the burden on companies and facilitate initial application.
But when do the ESRS take effect? For companies that are already required to file non-financial reports, the 2024 financial year is binding. All others have an extra year. But that is no reason to rest on one’s laurels – rather, it is a matter of using the remaining time to review one’s own processes and put oneself in a well-prepared starting position.
1. Become active yourself for long-term change
There are good reasons to push ahead with one’s own sustainability efforts outside the ESRS as well. The standards should merely provide the final impetus to consistently implement the urgently needed improvements.
2. Reputation and brand benefits
Transparent, comprehensible sustainability reporting strengthens a company’s reputation and credibility immensely. Instead of empty green promises, what counts is actual commitment and valid figures. Companies that have an honest interest in reducing their own ecological footprint score points with customers, investors and the public.
3. Investor requirements and capital providers
ESG efforts are increasingly coming into focus for stakeholders. This is especially true for funders who consciously invest in companies that actively advance their sustainability performance. This means that companies that rely on investors or other capital providers cannot afford not to take ESG criteria into account in their actions.
3. Risk management
Thorough sustainability reporting is the best investment to avoid being surprised by impending risks. Those who keep an eye on their own resources and processes can identify and remedy legal conflicts as well as disruptions in the supply chain at an early stage. This saves costs, valuable man-hours and tedious readjustments.
4. Employee retention and motivation
In day-to-day business, one thing should never be underestimated: the importance of clear sustainability efforts for employee retention. In a time of a shortage of skilled workers and an awareness that fair working conditions lead to greater satisfaction and better results, a clear sustainability strategy weighs all the more heavily. This is because employees feel much more connected to a company whose values and goals they can identify with.
5. Innovation incentives
Those who analyze their own data in detail can identify open potentials and, in a second step, discover new ways in which the company can position itself more sustainably. The search for concrete approaches to implementation then often reveals new business models and innovations that help achieve sustainability goals more quickly and adapt to volatile market conditions.
6. Regulatory foresight
The ESG environment is extremely volatile, especially in terms of regulation. In order not to be surprised by changes in legislation, it is advisable to keep an eye on corresponding developments. One thing is certain: The ESRS will not be the last regulation that companies will face on the subject of sustainability. Those affected who are aware of all the requirements at an early stage will have more time to make the necessary adjustments and thus be among the pioneers.
7. Long-term value creation
The more deeply the ESG concept is anchored in a company’s own corporate strategy, the more all stakeholders benefit. This is because clear, fair conditions ensure value creation that is built on stability and resilience within the individual process steps. By aligning their business strategy in a sustainable way, companies positively change their own working conditions – an important basis for real future security.
At first glance, the ESRS represent a significant additional organizational and time effort for many companies. Depending on the initial situation, this may involve far-reaching changes along the production and supply chain. However, the standards also provide the necessary impetus to encourage companies to see sustainability as an integral part of their strategy and to prioritize it accordingly.
Nicolette Behncke is a partner in the sustainability consulting practice at PwC Germany and a founding member of the Integrated Reporting and Sustainable Management working group of the Schmalenbachgesellschaft für Betriebswirtschaft e.V.
This Friday, Margrethe Vestager will make an appearance in Berlin. Not, as usual, as Vice-President of the EU Commission, where she has just resigned until further notice. But as a candidate: Vestager is seeking the support of the German government for her bid to become President of the European Investment Bank (EIB).
Her fiercest rival, Nadia Calviño, had already visited Berlin last week. The Spanish economy minister is held in high esteem by both Chancellor Olaf Scholz and Finance Minister Christian Lindner. Both already know her from the meetings of the EU finance ministers, where her voice carries weight. The former Budget Director General’s expertise in the Commission is undisputed and makes up for some concerns about her Spanish origin, which certainly exist in Berlin government circles.
Vestager will therefore have to work hard to convince Scholz, Lindner and Habeck. She is in favor of gearing the EU’s house bank more toward riskier financing of high-tech projects. Calviño, on the other hand, is more in favor of the traditional approach of financing low-risk large-scale projects, such as infrastructure. State Secretary for Economic Affairs Sven Giegold had also conveyed wishes regarding the content. The coalition partners will probably also depend on the corresponding commitments of the candidates as to whom they will support.
The picture is still diffuse: Hardly any government has yet clearly signaled who it favors to succeed outgoing EIB President Werner Hoyer. Paris is also keeping a low profile. Belgian Finance Minister Vincent van Peteghem, as the current Chairman of the EIB’s Board of Directors, must now decide whether he feels the time is ripe to put the matter up for discussion at the informal Ecofin meeting in Santiago de Compostela at the end of next week.
What are the CO2 emissions for a seat on a bus, train or business class flight from Hamburg to Milan? So far, there have been many methods of calculating this, and the results vary widely. Providers of transport services are likely to pick the method that is most favorable to them for calculating emissions. This involves a lot of greenwashing, and the comparability of the data is low.
The Commission is now proposing a standardized framework to report greenhouse gas emissions from transportation services. Count Emission EU is what the framework is called. It is important to the Commission that the emissions are well-to-wheel emissions, meaning that the analysis also includes the processes required to provide the energy carrier. The proposal is part of the Greening Freight Package presented by the Commission on July 11.
The basis for the data is to be ISO 14083:2023. The standard is internationally accepted and therefore lends itself to mapping transports across EU country borders – also for combined transport (CT), which involves several modes of transport. The database that reports the emissions is to be located at the European Environment Agency (EEA). The EU agency is also to be responsible for checking the quality of the data provided by the transport service providers.
The transport sector accounted for 26 percent of all greenhouse gas emissions in the EU in 2020. This also includes emissions from shipping and international aviation. Road transport alone accounts for 20 percent of EU emissions. There are no plans to also cover emissions of air pollutants as well as emitted noise.
Participation in the reporting of CO2 emissions is voluntary. If a company decides to participate, it must be prepared to have its data and measurement systems verified. However, this obligation only applies to large companies. As the verification imposes further bureaucratic burdens, SMEs are not obliged to participate.
Markus Ferber (CSU), economic policy spokesman for the EPP Group, attaches importance to the fact that participation in Count Emissions EU is and remains voluntary for transport service providers: “Count Emissions EU must not provide the data basis for possibly banning certain transport services in more far-reaching regulatory steps.”
There is opposition to this from the combined transport industry association. Ralf-Charley Schultze from the organization International Union for Road-Rail Combined Transport (UIRR) refers to the pending legislative proposal of the Commission for combined transport: “The regulation of combined transport only makes sense if the emissions of the different modes of transport are objectively reported and thus comparable.”
For this, it is imperative that participation in Count Emissions EU is mandatory for providers, Schultze told Table.Media. Originally, the proposal on combined transport with the Greening Freight Package was to come in July.
Relief, but no all-clear: The debate about a possible withdrawal of the Open Society Foundation (OSF) of billionaire and patron George Soros has taken a new turn. In August, Alexander “Alex” Soros, the son of the founding father, had announced that the Soros Foundation’s work in Europe would be significantly scaled back.
This would have meant the end for many OSF employees, but also a severe blow for hitherto generously funded non-governmental organizations in the EU. The withdrawal would be an almost historic break with Soros’ commitment to civil society, which he began more than 30 years ago in his native Hungary.
The announcement comes at an inopportune time and endangers many projects, warned Alberto Alemanno, an EU expert from Paris who is himself involved in civil society. Now conservative and religious organizations could step into the gap.
Transparency International also expressed concern: “An abrupt withdrawal from Europe at a time when populism is on the rise and the rule of law is under threat seems perverse and could undo much of the gains that have been made,” said TI Europe Director Michiel van Hulten.
But now Alex Soros is half backing down: “We will not leave Europe,” he declared in a guest article for Politico. Reports of a withdrawal, he said, are misleading. “We are not leaving. Europe remains of great strategic importance to OSF’s work,” Soros Junior said.
However, since the war in Ukraine, the political balance in Europe has shifted eastward. The future will no longer be decided in Paris and Berlin alone, but also in Kyiv, Warsaw and Prague.
The Soros Foundation intends to shift its priorities eastward accordingly. Work in Ukraine, Moldova and the Western Balkans is to continue. Aid for the twelve million-strong Roma communities in Europe is even to be expanded “dramatically.” Alex Soros also pledges his support for the Central European University (CEU), which Hungary’s right-wing head of government Viktor Orban has driven out of the country.
However, these oaths of allegiance, with which Soros apparently also reacted to protests by OSF employees and concerns of investors, could not dispel all doubts. According to Transparency International, the announcements must first be examined, and the situation remains unclear.
The EU Commission is also playing hard to get. It maintains an intensive exchange with the Soros Foundation. The authority’s transparency register lists meetings with Björn Seibert, the head of cabinet of Commission President Ursula von der Leyen, and with Commissioners Paolo Gentiloni and Věra Jourová. Vice President Margrethe Vestager met personally with Soros Senior in 2022. But when asked, the EU authority would not comment on the future of the cooperation.
The European Parliament expresses concern. “The withdrawal of the Open Society Foundations from large parts of Europe comes at a critical moment when we are witnessing a worrying shift to the right in some of our member states,” says Parliament Vice President Katarina Barley (SPD). The OSF has made a crucial contribution to supporting pro-European civil society in Europe over the years – for this reason alone, its departure is a loss.
“As a European Union, we must recognize and actively address emerging gaps,” Barley said. “It is our shared responsibility to keep alive and defend the values on which our Union was founded.”
Green MEP Daniel Freund, who used to work for “TI” himself and specializes in rule of law issues in Parliament, expressed similar views. He calls for more support for civil society from the EU Commission: “There is no question that the EU needs to spend more money on protecting democracy and the rule of law,” Freund said. The financial situation of civil society is likely to “deteriorate enormously” as a result of Open Society’s withdrawal. The EU Commission would therefore still have to expand its funding.
This could be difficult. After all, the EU budget has been exhausted; before the summer break, the head of the authorities, von der Leyen, demanded a substantial additional payment from the EU states. Moreover, a lot of money is at stake. In 2021, the Soros Foundation spent $209.4 million on projects in Europe and Central Asia, according to its own figures.
The Digital Market Act (DMA) has reached another milestone. There have been a few surprises in the designation of gatekeepers. For one thing, the Commission has only assigned gatekeeper functions to six companies instead of seven. For another, cloud services are not included. In addition, the Commission has launched several market investigations.
The six gatekeepers are Alphabet, Amazon, Apple, Bytedance, Meta and Microsoft. Samsung, contrary to expectations, is not among them. The designated companies are called gatekeepers because they offer central platform services through which business operators gain access to consumers in the EU. The DMA is intended to help create fair competitive conditions for all companies.
Major platform operators must now play by European rules, Internal Market Commissioner Thierry Breton said in a statement posted on X. “No online platform can behave as if it is too big to care,” he announced. “We will be very, very strong on enforcement.” In doing so, he countered fears that the commission might be overwhelmed by the task.
In total, the Commission identified 22 core platform services (CPS) from the six gatekeepers. The companies now have until March 2024 to ensure the obligations under the DMA for each of their designated CPSs. They already have to implement some things immediately, such as installing a compliance officer and notifying the Commission of planned mergers.
In parallel with the designation, the Commission has launched four market investigations. Apple and Microsoft had indicated in July that their services iMessage and Bing, respectively, Edge and Microsoft Advertising did not meet the thresholds of the DMA. The Commission is now looking into that. Under the DMA, companies have the opportunity to cogently rebut their designation. These quantitative investigations should be completed within five months.
In another market investigation, the Commission is examining whether Apple’s iPad operating system should be counted among the gatekeepers even though it does not meet the thresholds. This qualitative investigation may take up to twelve months.
Although the mail services Gmail and Outlook, as well as the Samsung Internet browser, meet the thresholds of the DMA, the Commission did not classify these services as CPS. The operators Alphabet, Microsoft and Samsung had presented sufficiently reasoned arguments for doing so, the Commission said. Accordingly, it did not classify Samsung as a gatekeeper.
Reactions from the affected companies were mixed: “We accept our classification as gatekeepers” was said at Windows and Linkedin, said a Microsoft spokesperson. The company also welcomed the Commission’s decision to launch a market investigation into Bing, Edge and Microsoft Ads. Here, Microsoft is acting as a “challenger in the market,” they said. Google, Meta and Amazon said they were still reviewing the decision.
Tiktok, on the other hand, dismissed the classification as wrong. “We are disappointed that there was no market investigation prior to this decision and are reviewing our next steps.” Apple, in turn, pointed to security risks. The company said it feared the spread of computer viruses should users increasingly install applications from sources other than Apple’s own App Store.
Consumer advocates said the designation is an important step toward better functioning digital markets for consumers. “For too long it has been easy for tech giants to manipulate markets, to the detriment of consumers who have not had easy access to alternatives to big tech,” said Ursula Pachl, BEUC’s deputy director general. She said she expects the Commission to vigorously enforce the DMA. Consumers would also have the option in the future to collectively sue a company if it violates the rules. This is “a great development,” she said. vis
The European Sustainability Reporting Standards (ESRS) mark the beginning of a new era. These uniform Europe-wide reporting requirements are intended to and will significantly improve production and working conditions through greater transparency: Concrete specifications and better controls should help prevent human rights violations, corruption and greenwashing in the future. On July 31, 2023, the European Commission adopted the final delegated act after an extensive public feedback period.
After processing more than 600 comments, twelve finalized ESRS now remain, divided into two overarching standards on sustainability issues and ten topic-specific specifications on environmental, social and governance (“ESG”) issues. This is an important development, as companies have so far hardly had to document their commitment to ESG issues – unlike in the financial sector, for example. This is changing with the ESRS, which as part of the EU Corporate Sustainability Reporting Directive (CSRD) determine the sustainability reporting of over 50,000 companies.
To make it easier for companies to switch to functional reporting, the European Commission has made adjustments. This gives companies more time to submit particularly challenging information for the first time and to establish routines within complex supply chains. Finally, fair working conditions and more sustainable production require better agreements and clear coordination.
The EU Commission is making further concessions to companies: it has renegotiated the question of materiality for individual disclosure requirements and converted some mandatory disclosures into voluntary disclosures. In this way, too, it aims above all to reduce the burden on companies and facilitate initial application.
But when do the ESRS take effect? For companies that are already required to file non-financial reports, the 2024 financial year is binding. All others have an extra year. But that is no reason to rest on one’s laurels – rather, it is a matter of using the remaining time to review one’s own processes and put oneself in a well-prepared starting position.
1. Become active yourself for long-term change
There are good reasons to push ahead with one’s own sustainability efforts outside the ESRS as well. The standards should merely provide the final impetus to consistently implement the urgently needed improvements.
2. Reputation and brand benefits
Transparent, comprehensible sustainability reporting strengthens a company’s reputation and credibility immensely. Instead of empty green promises, what counts is actual commitment and valid figures. Companies that have an honest interest in reducing their own ecological footprint score points with customers, investors and the public.
3. Investor requirements and capital providers
ESG efforts are increasingly coming into focus for stakeholders. This is especially true for funders who consciously invest in companies that actively advance their sustainability performance. This means that companies that rely on investors or other capital providers cannot afford not to take ESG criteria into account in their actions.
3. Risk management
Thorough sustainability reporting is the best investment to avoid being surprised by impending risks. Those who keep an eye on their own resources and processes can identify and remedy legal conflicts as well as disruptions in the supply chain at an early stage. This saves costs, valuable man-hours and tedious readjustments.
4. Employee retention and motivation
In day-to-day business, one thing should never be underestimated: the importance of clear sustainability efforts for employee retention. In a time of a shortage of skilled workers and an awareness that fair working conditions lead to greater satisfaction and better results, a clear sustainability strategy weighs all the more heavily. This is because employees feel much more connected to a company whose values and goals they can identify with.
5. Innovation incentives
Those who analyze their own data in detail can identify open potentials and, in a second step, discover new ways in which the company can position itself more sustainably. The search for concrete approaches to implementation then often reveals new business models and innovations that help achieve sustainability goals more quickly and adapt to volatile market conditions.
6. Regulatory foresight
The ESG environment is extremely volatile, especially in terms of regulation. In order not to be surprised by changes in legislation, it is advisable to keep an eye on corresponding developments. One thing is certain: The ESRS will not be the last regulation that companies will face on the subject of sustainability. Those affected who are aware of all the requirements at an early stage will have more time to make the necessary adjustments and thus be among the pioneers.
7. Long-term value creation
The more deeply the ESG concept is anchored in a company’s own corporate strategy, the more all stakeholders benefit. This is because clear, fair conditions ensure value creation that is built on stability and resilience within the individual process steps. By aligning their business strategy in a sustainable way, companies positively change their own working conditions – an important basis for real future security.
At first glance, the ESRS represent a significant additional organizational and time effort for many companies. Depending on the initial situation, this may involve far-reaching changes along the production and supply chain. However, the standards also provide the necessary impetus to encourage companies to see sustainability as an integral part of their strategy and to prioritize it accordingly.
Nicolette Behncke is a partner in the sustainability consulting practice at PwC Germany and a founding member of the Integrated Reporting and Sustainable Management working group of the Schmalenbachgesellschaft für Betriebswirtschaft e.V.
Commission wants to digitize social systems
The Commission wants to improve cross-border access to social benefits in the EU through more digitization. Trade Commissioner Valdis Dombrovskis said at a press conference yesterday that many people still have to physically visit authorities in other countries to prove their insurance coverage. Paper applications are also often still needed, he said. That creates costs and effort for employees and companies, Drombrovskis said. “Access to social benefits is still not smooth and seamless in all cases,” he attested.
The EU actually set out years ago to simplify Europe-wide access to pension entitlements, posting certificates and social benefits and created the EESSI system (Electronic Exchange of Social Security Information) for this purpose. Social security organizations in Europe are supposed to communicate digitally via this infrastructure. But even today, this only works to a limited extent.
Above all, member states are called upon
Dombrovskis is therefore urging member states to make more speed in implementing EESSI. By the end of 2024, the system should become “fully operational” across Europe and make paper documents unnecessary, Dombrovskis said. The commission also wants to establish the European Social Security Passport (ESSPASS). This is intended to complement the EESSI system because it is aimed directly at citizens.
A second test phase is currently underway for the social security passport, which includes a certificate of posting and the European health insurance card. Here, too, the Commission is appealing to the member states to ensure that as many as possible participate in the test. Currently, only twelve countries are participating. In the future, the Commission envisages integrating the social security passport into the digital wallet so that it can be used to provide uncomplicated identification to labor inspection authorities or health insurance companies.
The whole thing will help reduce errors as well as prevent fraud, Dombrovskis stressed. Companies would also benefit if they could offer their services abroad more easily. In addition, the Commission yesterday presented its concept for a disability card that would be valid throughout Europe. With this card, people with disabilities would be able to benefit from all nationally applicable advantages, such as discounts on local public transport or assistance services on trains. lei