Sustainability Report to assess ESG performance

Corporate sustainability, which includes economic, environmental and social aspects, is crucial to ensure the balanced long-term development of companies. In recent years, the regulatory requirements for sustainability reporting have steadily increased, and further changes are expected in the future. The aim of the sustainability report is to enable organisations to assess and improve their sustainable practices, identifying areas where positive changes can be made. In addition, it provides transparent and reliable information for stakeholders, such as investors, customers, employees and local communities, who wish to assess an organisation's overall impact.

Information on sustainability based on the ESG criteria represent the three pillars of communication that companies should disseminate, following the principles of Corporate Social Responsibility. In summary, the company must demonstrate the ability to achieve positive financial results, reduce negative impacts on the environment and improve the social impact on stakeholders, in order to ensure a balanced and sustainable development. For this reason, regulations have been introduced over time that have established reporting obligations. One of the starting points of this approach was the amendment of Article 2428 of the Civil Code - paragraph 2 by the Legislative Decree No. 32/2007.

The regulations stipulate that as from 2008, the annual report must include financial indicators and, if relevant, also non-financial indicators relating to the company's specific activity, including information on the environment and personnel (Article 2428(2) of the Civil Code). However, the depth of information required varies depending on the size of the company. Indeed, if the amended version of Article 2428 led larger companies to spread the need to collect and process data on environmental and social impact, it was with the Legislative Decree No. 254/2016 (transposing Directive No. 95/2014) that made corporate sustainability the subject of operational insights also for SMEs. This change was also supported by the European Union, which decided to extend the reporting obligations on sustainability and biodiversity protection to these companies as well.

As of 2017, public interest entities (under Article 16(1) of Legislative Decree No. 39/2010) with an average number of employees exceeding 500 and total assets exceeding 20 million or total revenues exceeding 40 million, must prepare a specific document or include non-financial information in the management report. This information, known as a Non-Financial Statement (DNF), must include various aspects, including: use of energy and water resources; emissions of greenhouse gases and air pollutants; impact on the environment; health and safety; social aspects; and the fight against corruption. To be considered that in December 2022, further changes were made with the adoption of the directive No. 2464/2022, known as CSRD, which will be in force in Italy from 2024. Furthermore, as of 2024, the CSRD will no longer be used and all information will have to be specified in the annual report.

The accountant can play an important role in supporting companies in the preparation of the sustainability report, providing expertise and advice on data collection, impact assessment and reporting of relevant information. In particular, the accountant can: analyse and interpret financial and non-financial data to identify relevant aspects to be communicated; assess the adequacy of the company's data collection systems and propose improvements; ensure compliance with sustainability regulations and guidelines; collaborate with other professionals, such as environmental or social experts, to obtain a complete and accurate view of the company's performance; and help identify opportunities for improvement and develop strategies to achieve sustainability goals.

The main objective is to consolidate the culture of sustainability among professionals and to communicate the urgency of the ecological transition process. The sustainability report not only provides a detailed overview of the organisation's activities, but also highlights the impact of these activities on the environment and society. Every product will have to be assessed in terms of sustainability according to ESG (Environmental, Social, and Governance) principles.There is a need for qualified personnel; small companies may need external consultants, while large companies may invest resources in internal staff training.

Another fundamental factor linked to the figure of the accountant is that of ensuring the transparency and reliability of the information provided in the sustainability report. Indeed, the accountant plays an important role in supporting companies in the preparation of sustainability reports, ensuring the correct communication of financial, environmental and social information. It also helps ensure compliance with applicable regulations and can provide strategic advice to improve a company's sustainability performance. In this context, 3Bee supports companies in achieving ESG (Environmental, Social, and Governance) targets with tangible and measurable regeneration projects.

Banks, which were equipped in terms of sustainability before companies, have changed their relationship with companies from a personal approach based on relationships to a more aseptic approach based on numbers. Today, banks assess the ESG performance of companies and require not only financial reports, but also sustainability reports. However, it must be emphasised that the ESG analysis of companies is not only a matter of regulatory compliance, but also of financing opportunities. Companies that demonstrate a genuine commitment to sustainability may enjoy better financing conditions and more interest from investors.

For professional firms to support businesses, it will be important to focus on strategic and administrative consulting, as well as financial consulting. It will be crucial to develop specific skills to accompany companies on a path of genuine awareness and sustainability, avoiding greenwashing. The commitment of companies will depend on their size, but it is important to focus on internal resources, external skills and new professional figures. Sustainability involves everyone and requires specific skills, 3Bee, thanks to its technological approach, accompanies companies on a path towards biodiversity that allows them to achieve a tangible and measurable impact.

Article by Angelina Tortora