Sustainability is a word that seems to come across all the time and everywhere these days, in very different contexts. In business, sustainability means the responsibility of companies and other organizations for the effects of their own operations on society, stakeholders and the environment. Responsible operations are ethical, well-managed activities that produce both economic and social good; it supports sustainable development, causes as little environmental harm as possible and respects human rights.
Many smaller companies and private entrepreneurs find the subject difficult and hard to approach. However, you shouldn’t let terms like ESG and CSRD discourage you, but bravely familiarize yourself with the topic, because sustainability reporting is already relevant for those small companies that operate in the supply chains of larger companies, who are already obliged by sustainability reporting. In order for large operators to be able to carry out their own reporting, reporting is needed from the entire value chain, and thus the obligation moves down the chain, even to small operators!
Terms
ESG refers to the perspective from which the organization’s effects on the environment, society and governance are evaluated. The term comes from the English words Environment, Social and Governance. CSRD is an abbreviation of the name of the EU directive Corporate Sustainability Reporting Directive, which obliges companies to report on their sustainability in accordance with ESG principles.
Sustainability report
The sustainability report tells about the sustainability status of the company. It needs to be attached as part of the activity report, to be registered together with the financial statements to the Finnish Patent and Registration Board. The EU sustainability reporting directive, or CSRD, obliges companies to report on sustainability. All stock-listed and large companies (more than 250 employees and either a turnover of more than 40 million euros or a balance sheet of more than 20 million euros) are already obliged to report on their responsibility situation in 2024. In the future, starting from 2027, reporting will also apply to small companies.
Sustainability program
The sustainability program is a voluntary program that guides the company’s sustainability work. In order to promote and implement sustainable development and responsible operations, the company itself sets its own goals, plans, measures and metrics. With the help of the sustainability program, sustainability is brought into the company’s everyday practical work and the company’s personnel are encouraged to act responsibly.
Act now!
Companies of all sizes should now start thinking about how they intend to carry out sustainability reporting. If sustainability issues have not yet been included in everyday activities, it is good to start by creating a sustainability program; define the goals for sustainable operating methods for your company and the metrics to use for monitoring the achievement. Checkfin has just published an online training How to create sustainability program (available in Finnish). You will get instructions and tips for making your own sustainability program from this short, compact 30 minute training.
Good luck for the sustainability work!
