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Reporting ESG

ESG reporting addresses the environmental, social and governance aspects of companies. It stems from the broader doctrine of sustainability, which is the idea that economic goals should be achieved ethically and with respect for the environment and the community in which the company operates.

ESG reporting obligations are gradually covering more groups of companies, from the largest to the smallest. Regardless of the regulations, the SME sector should already be taking an interest in the topic of sustainability. Small companies wishing to be suppliers to large entities, will face ESG compliance.

We invite you to learn about the most important ESG reporting issues and functionalities in Comarch ERP systems that allow organizations to better address sustainability issues.

Why companies should think in terms of ESG

Legal requirements and basis

Legal requirements and basis

The legal basis imposing mandatory sustainability reporting is the EU's CSRD (Corporate Sustainability Reporting Directive), published in 2023, which expands the scope of the NFRD (Non-Financial Reporting Directive).

The document standardizes reporting requirements, in terms of sustainability, defines the group of entities covered by the reporting obligation, and defines a taxonomy for publishing ESG data - as in the case of financial data.

Currently, the 150 largest companies listed on the Warsaw Stock Exchange are obliged to report sustainability - ESG. Companies in the SME sector, with more than 10 employees, will be obliged to perform non-financial reporting as early as 2026, which means that about 90% of small and medium-sized companies will be subject to the obligation.

ESG reporting obligation under the CSRD directive

ESG reporting obligation under the CSRD directive

Requirements of EU competitions and tenders

Requirements of EU competitions and tenders

Sustainability of planned activities is also a requirement of EU funds for 2021-2027. All business calls that have already appeared require at least neutral environmental impact and reference to social and corporate governance issues. The more sustainability in planned investments, the greater the chance of obtaining funding.

It therefore becomes important to choose suppliers of goods, services or technologies that respect environmental and other ESG areas. The solutions they offer will help achieve environmental indicators such as reduced energy consumption, resource efficiency and waste reduction. 

Sustainability is also an important element of public tenders. Depending on the subject matter, public orders take into account corporate social responsibility or environmental issues such as reducing greenhouse gas emissions, limiting water consumption, reducing waste and saving energy.

Access to finance

Access to finance

With the growing importance of ESG reporting, many financial institutions, such as banks, investment funds and individual investors, are beginning to pay more attention to sustainability criteria. Companies that demonstrate commitment to ESG areas may attract more attention from investors interested in long-term growth and corporate social responsibility.

Companies that conduct operations in accordance with an ESG strategy often present a higher level of transparency in their operations and management. This, in turn, builds trust among investors, who want to be sure that their capital is invested in companies that operate in line with ethical values and care about environmental protection and social interests.

ESG as a source of competitive advantage

ESG as a source of competitive advantage

For large organizations, ESG criteria are becoming increasingly important in making investment decisions. These entities are reorganizing the model and terms of cooperation with suppliers or subcontractors. All processes in the supply chain are being redefined, and one of the priorities, when selecting business partners, is for these entities to provide detailed information on the origin of their products, carbon footprint emissions or other documents on the sustainability measures taken.

Economic benefits

Economic benefits

Improving processes at various levels of the organization translates directly into increased operational efficiency, including significant cost reductions in the consumption of resources such as electricity, water, raw materials required for production, or the amount of paper used in document circulation.

Investing in ESG strategies can also help companies minimize risks in areas such as health and safety, or tendering and financial activities. By effectively recording, managing and eliminating all undesirable events, it is possible to create a safe work environment, reduce downtime and thus maximize the productivity of individual units.

Positive brand image

Positive brand image

Effective management of processes related to the environment, society and corporate governance affects the building of a positive corporate image and strengthens brand recognition. This translates into greater trust from business partners and increased loyalty from customers and other stakeholders.

The benefit of such a responsible approach to ESG issues is also the integration of employees around shared values and the development of their additional competencies. Greater employee commitment and identification with the company is built.

Energy efficiency

  • Optimization of forklift trips
  • More efficient production planning resulting in fewer changeovers
  • Energy savings resulting from optimal use of server space
  • Ability to handle sales processes using a lightweight, less energy-consuming infrastructure

Reducing printing and paper consumption 

  • Digitization of documents and processes, with electronic documents instead of paper (invoices, purchase orders, requisitions, delegations and vacation requests)
  • Digitization of archiving processes and management of document repositories
  • Electronic information circulation - subscription to digital reports
  • Digital control of the production process

Optimization of resource and waste management 

  • Mobility - operation of all processes in one device (smartphone or tablet)
  • Reduction of equipment consumption - ability to share collectors
  • Use of goods rotation analysis, including ABC-XYZ categories, for optimal purchase planning
  • Production reporting, catching deviations
  • Less hardware through the use of a cloud ERP system

Reduced greenhouse gas emissions

  • Optimization of sales representative/mobile service technician trips resulting in lower fuel consumption
  • Digitization of processes, fewer business trips
  • Optimization of transportation - fewer visits to stores, collective transportation via couriers
  • Digitization of processes, reduction in delivery of paper documents by customers

Corporate governance, ethics standards

  • Ability to create a supplier/contractor vetting process  
  • Reporting on workforce structure (age/gender), employee turnover
  • Salary reporting

Employment/health and safety 

  • Route management - impact on worker safety
  • Verification of employee authorizations, affecting job security
  • Access to employee information (contracts/pay slips/procedures/easy contact)
  • Work time planning (work time schedules)
  • Management of examinations, employee training system

Energy efficiency

  • Optimization of forklift trips
  • More efficient production planning resulting in fewer changeovers
  • Energy savings resulting from optimal use of server space
  • Ability to handle sales processes using a lightweight, less energy-consuming infrastructure

Reducing printing and paper consumption 

  • Digitization of documents and processes, with electronic documents instead of paper (invoices, purchase orders, requisitions, delegations and vacation requests)
  • Digitization of archiving processes and management of document repositories
  • Electronic information circulation - subscription to digital reports
  • Digital control of the production process

Corporate governance, ethics standards

  • Reporting salaries
  • Structuring and controlling data collection processes related to the detection of violations and irregularities

Example use of data for reporting ESG activities

Comarch ERP systems are comprehensive solutions for companies that not only support day-to-day operations, but also help implement sustainable development strategies.

Raportowanie zużycia mediów

Reporting utility consumption

Reporting waste generated from production operations

Reporting waste generated from production operations

Reporting trips, routes, distances, fleet structure

Reporting trips, routes, distances, fleet structure

Reporting employment structure

Reporting employment structure

Tools for non-financial reporting

Comarch, as a leader in handling reports in xbrl format, is preparing to handle non-financial reports using the format and tagging in accordance with planned EU requirements.

ESG reporting and conducting activities in this area is becoming an indispensable, increasingly required part of managing organizations in Europe. It is worth remembering the numerous financial, social and governance benefits that ESG brings. Given these, it is a good idea to take an interest in the subject, and to take steps toward sustainability by reducing negative environmental impacts, improving equity and social responsibility, and good governance practices.

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