In an era of increasing social and environmental awareness, the concept of ESG (Environmental, Social, Governance) is gaining increasing importance and attention in the business world. Particularly important is the social (S) aspect, which covers a wide range of issues related to human resource management, talent acquisition and the creation of a responsible and sustainable working environment.
With new regulations such as the Corporate Sustainability Reporting Directive (CSRD), companies are required to report not only on their financial performance, but also on the impact they have on society and their workers. This shift requires employers to take a new approach to employment, equality, diversity and employee rights.
Let’s take a closer look at the social aspect of ESG, focusing on its impact on hiring policies and human resource management. What are the key areas to report on, what are the new standards and what challenges lie ahead for employers as both regulations and societal expectations change?
CSRD – The social driver of reporting
Reporting obligations will be imposed on certain groups of companies, but they will be phased in over time for each group. The final groups will not have to begin reporting until 2028.
Companies required to produce an ESG report will have to follow the European Sustainability Reporting Standards (ESRS). In the social area, employment issues will be covered by the ESRS S1 and ESRS S2 standards.
The ESRS S1 standard relates to the disclosure of the company’s material impact on its own workforce in areas such as
- Secure employment
- Working time
- Adequate wages
- Work-life balance
- Gender equality and equal pay for work of equal value
- Collective bargaining, including rate of workers covered by collective agreements
- Access to training and skills development
- Employment and inclusion of people with disabilities
- Workplace violence and harassment prevention measures and diversity
- Respect for human and labour rights
In contrast, ESRS S2 is concerned with disclosures that enable an understanding of the company’s impacts on value chain workers connected with the undertaking’s own operations and value chain, including through its products or services, as well as through its business relationships.
Reporting obligations under Polish law
In accordance with the CSRD, Member States were obliged to transpose its provisions into national law by 6 July 2024, but Poland has not yet adopted any legislation.
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