24 % of companies are still struggling with the ESG concept, although at the same time increasing numbers admit that they have already developed their sustainability strategy. Almost half of companies (44 % – 45 %) have already had to report on their carbon footprint and sustainability to their counterparties, which shows what a significant change has taken place in this area (compared to less than 24 % in the previous survey[1]). What is the 2024 ESG summary? Let’s take a look.
Implementation of the CSRD – well done, though a bit too late
We end the year with the delayed implementation of the Corporate Sustainability Reporting Directive (CSRD). The Act amending the Accounting Act, the Act on Statutory Auditors, Audit Firms and Public Supervision and certain other acts is now in its final legislative stage. The implementation of the EU Directive introduces mandatory ESG reporting, including information on how a company’s activities affect such issues as:
- Environmental
- Social
- Corporate governance
It should also be remembered that the regulation introducing the first set of European Sustainability Reporting Standards came into force on 1 January 2024 and is being applied.
Greenwashing on the inspection radar
For more than a year, the Office of Competition and Consumer Protection (UOKiK) has been carrying out ten proceedings in greenwashing cases in advertising and communication that may have misled the public by suggesting, for example, a positive impact on the environment.
There have also been a number of greenwashing rulings this year. These include a ruling by the Danish Supreme Court in the case of a meat producer accused of misleading consumers by labelling its pork as ‘more climate-friendly than it appears’, which triggered reactions from consumer organisations. Another was the Amsterdam court ruling in the KLM airline case concerning slogans used in the ‘Fly Responsibly’ campaign such as: “Be a hero, fly CO2ZERO” and “CO2 neutral”.
The carrier referred to its use of greener fuels and its contribution to reforestation. However, the court found that the claims of ‘responsible flying’ were too general and unjustifiably implied that travelling with these particular airlines was environmentally friendly.
A brief overview of the important EU 2024 regulations
On 18 February, a regulation introducing a closed-loop economy for the EU battery sector entered into force. Ultimately, it will introduce requirements for, among other things, calculating the carbon footprint of these products, and will impose targets on manufacturers for the collection of used batteries and lithium recovery, as well as minimum levels of recycled content used in their production.
On 18 July 2024, the EU Ecodesign for Sustainable Products Regulation (ESPR) was adopted, which set new requirements for sustainable products placed on the EU market.
The Regulation on the Restoration of Ecosystems and Biologically Diverse and Resilient Nature in EU Terrestrial and Marine Areas came into force a month later. The EU Deforestation Regulation is gradually being introduced – something we have reported on regularly this year.
Keeping up with the constantly changing regulatory environment around ESG in 2024 has not been easy and there are many indications that next year will be equally challenging in this respect.
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[1] 2024 ESG Report “Opportunities and Risks”, Polish ESG Association
