ESG, standing for Environmental, Social, and Governance, represents three non-financial parameters for evaluating companies required by EU law.
The new EU directive on corporate sustainability reporting (abbreviated as CSRD) introduces detailed reporting requirements, according to which companies are or will be obligated to report on sustainability issues. Companies in the European Union will face new requirements for disclosing information about their activities in these key areas.
It should be emphasized that transparency in ESG areas is not entirely new: many companies were previously subject to regulations in areas such as environmental protection, labor law, or issues related to corporate governance and anti-money laundering. However, the novelty lies in the integration of these regulations into a unified reporting system, which until now was often treated as a voluntary element of companies’ strategies aimed at building a positive image. Currently, for many companies operating in the European Union, ESG reporting is transforming from an optional activity into a legally required obligation.
ESG reporting is becoming a key tool for assessing the development potential of companies, focusing on three main areas: impact on the climate and environment, impact of operations on society, including safety and human rights, and in terms of ethics and corporate management. These non-financial aspects of company activity complement traditional financial indicators, showing whether a company not only achieves good economic results but also operates in accordance with the principles of sustainable development.
Observing the market and dynamically evolving regulations in ESG, it becomes clear that the future of business is definitely heading towards greater transparency and environmental and social responsibility. For companies, regardless of their size and sector of activity, it becomes crucial not only to track and adapt to these trends but also to actively use ESG principles as a strategic tool. Integrating sustainable development into business strategies not only minimizes risks but also opens up new opportunities for growth, innovation, and building a stronger market position.
As a law firm, we are ready to support our clients in understanding and implementing ESG requirements, helping to navigate through the changing legal and market landscape. We believe that commitment to sustainable development and responsible management is not just an obligation but, above all, an opportunity to build lasting value and competitive advantage in the market. We invite you to cooperate with us to shape the future of business in the spirit of sustainable development.
