IT companies well advised to keep a close eye on developments in ESG legislation
10 November 2022 saw the European Parliament adopting a new draft Corporate Sustainability Reporting Directive (CSRD) that seeks to extend ESG reporting requirements to include all large enterprises and some SMEs.
Although it will be some time before the CSRD enters into force, it is already worth taking note of ESG business requirements as we are rapidly approaching a revolution that will affect even smaller companies, including those in the IT sector.
ESG factors in the IT sector
The ESG concept refers to environmental, social and corporate governance factors guiding sustainable business growth.
ESG is therefore a broad concept covering business not only in terms of ecology, but also its impact on local communities and employees, cyber security, data protection and equipment energy intensity.
Benefits of ESG for the IT sector
To improve their public perception, multiple companies have already started – either because of supply chain reporting requirements or voluntarily – to require business partners to provide business sustainability metrics.
This makes it imperative that even smaller entities start paying attention to ESG factors and collecting data on certain aspects of their business. Emerging top-down pressure from large companies and the advancement of legislative work on the CSRD indicate that this trend will not reverse, but rather accelerate.
But does complying with ESG requirements mean solely additional responsibilities for the IT sector, or are there also potential benefits for businesses who do so?
All this and more is discussed by Katarzyna Ziółkowska in her “How the EU’s CSRD will change ESG reporting requirements in 2024” article.
Date: 9 November 2022