The green envelope | NT

The green envelope

TON & teu

We know the blue envelope, but companies will also find a green envelope on their doormat in the near future. They must concretely demonstrate what their contribution is to sustainable change. The agreements from various Green Deals, at European and national level, will be tested by rules down to the individual company level. So be prepared for stricter reporting requirements.

Climate change is a major problem with ambitious goals to stop them. More than ever, we feel a responsibility to contribute to a better world. Two-thirds of Dutch consumers consider sustainable packaging important when buying fruit and vegetables, 68% say they make more conscious choices when buying online to limit returns. The logistics sector has a crucial position in terms of reducing emissions given its role in global transport. Companies are challenged by their environment, customers and staff to transform existing production and supply chains into sustainable chains through innovation, creativity and technology. Not an easy task; the road to sustainable change has many obstacles. Innovation processes are often long and expensive. And success is not guaranteed in advance.

Are we on the right track? Let’s just say that there is a hopeful start. The 17 Sustainable Development Goals (SDGs) introduced by the UN in 2015 were not without consequences. The SDGs have a global scope. According to a 2021 report by the UN Global Compact, 81% of companies report specifically on actions related to SDGs. And research conducted by PwC among Dutch listed companies reports that 93% mention the SDGs in their annual report. On the other hand, columnist Hans Stegeman recently cracked a critical note in FD about the number of SDGs and the grab bag for greenwashers. He has a point. The explicitly included SDG ambitions in the field of sustainable energy, reduction of CO2 emissions and proper working conditions require transparent insight. Valuable benchmarking is only possible if there is a clear report.

The pressure to report more comprehensively and consistently is increasing. The Environmental, Social and Governance (ESG) report is an example of this. Of the companies in the S & P500, 90% published a sustainability report in 2019, but only 29% gave a meaningful explanation. According to PwC, it shows that there is still a significant challenge in data processes, systems and internal organization to make the ESG information in environmental performance verifiable in the right way.

But it is crystal clear that it is not only the ESG reporting that will increasingly determine the work of CFOs. In Europe, for example, companies face the requirements of EU taxonomy and the introduction of the Corporate Sustainability Reporting Directive (CSRD), the obligation to report on the environmental and social impact of their business activities. As a financial sector, banks are also feeling that their role in the transition is highly required. Banks are responsible for emphatically transforming the financing portfolio on the theme of sustainability by financing transactions that are directly linked to EU taxonomy. The introduction of the CSRD, with the aim of supporting the transition to a sustainable economy, will start in 2024 for all listed companies. Then it’s the turn of the big companies in 2025. And probably in 2026 there will be a requirement for other small and medium-sized enterprises to report on sustainability goals.

This also allows logistics providers to profile themselves. Customers need this report and also want insight into sustainability ambitions, KPIs and progress. The same goes for the employees. Sustainability is the key word for the new Generation Z. They are looking for an employer with a strong profile in Corporate Social Responsibility. The green envelope in the form of sustainable reporting therefore comes. This is where ambition, transformation and realization meet.

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