Briefing on the benefits of mandatory sustainability reporting by business – Part One
"The business case is won - how the benefits of mandatory sustainability reporting by business, really do outweigh the costs – Part One", 14 Sep 2021
As the European Union considers the new draft Corporate Sustainability Reporting Directive and associated sustainability standards, striking new evidence shows that the proposed legislation saves rather than costs money for business. In this two-part article, we analyse what this means for the ‘business case’ for companies to pursue sustainability and to report against this. In Part One, we present the new evidence, showing that not only the additional costs of the new legislation are “negligible” for companies but that it will actually lead to an average cost saving up to EUR 41,700 per company each year in streamlining requests for sustainability information to the business from other sources. In Part Two, we analyse why existing standard costs models have overstated the cost of business sustainability and understated its benefits, and present broader evidence which is now seen as overwhelmingly proving the link between better corporate sustainability performance and higher financial return. Not only does this provide a forceful case for passing the new EU legislation, but it concludes that a ‘tipping point’ has been reached whereby the ‘business case’ has been won.
The EU’s new draft Corporate Sustainability Reporting Directive (CSRD) seeks to extend the number of companies covered across Europe four-fold in comparison to existing rules and is instrumental in leveraging the opportunities for companies derived from the EU sustainable finance strategy and Green Deal.
However, it is the evidence accompanying publication of the draft law which may prove decisive in finally embedding a mindset across the business community, that good sustainability reporting is good business too...
See here for Part Two