Reporting non-financial information shows how sustainable companies - Raben Group among others - work to reduce their negative impact on the environment and enhance the positive one, and at the same time how this is perceived by partners. An ESG report can be an important tool for communicating with a wide range of stakeholder groups, but to do so, it should meet several conditions.
Thanks to the EU Non-financial Disclosure Reporting Directive (NFRD), which had been in force for several years, which was then replaced by the Corporate Sustainability Reporting Directive (CSRD) in January 2023, the group of entities required to disclose non-financial data will soon expand significantly. In the past, such reports were prepared by companies voluntarily, on their own initiative. Currently, this is an obligation for large public-interest companies with more than 500 employees. In 2026 (reporting for 2025), they will be joined by large companies, including Raben Group, which meet two of the three criteria: they have more than 250 employees, they have achieved either EUR 40 million in net revenue or EUR 20 million in balance sheet total. In the following year, small and medium-sized listed companies with at least 10 employees will also have to report. Across Europe, it is estimated that the number of entities publishing such a report will increase from around 11,000 (as at 2023) to at least 40,000. In Poland, these are around 150 and 3,500 companies respectively, so also a significant jump. More than 100 companies in the transport and logistics sector may be affected.
Advantage with experience
Reporting has a long tradition in Raben Group. The 2024 report will be the tenth in our history, so we really have a lot of experience in this field. Over the past decade, the scope of our reporting has evolved not only geographically - fifteen markets instead of one - but also in terms of the type of data. CSR, SDG, ESG - the acronyms that give structure to successive reports are changing, but we are still guided by one goal: the reliability of the information and its relevance to stakeholders' needs.
Nevertheless, producing such a report is a big challenge even for us. The first step is to collect data scattered across the entire Group, the companies operating in fifteen European countries. The report integrates all key areas and thus involves very different units in the organisation. Input is needed from those responsible for water and energy consumption, waste, risk management or, last but not least, employee issues. In addition, new reporting in line with the CSRD means for us the modification of our approach and addressing the requirements arising from the new standard. That is why we have already started working on this. According to the new directive, the selection of reporting topics should be based on the criterion of the so-called double materiality. The company must identify its impact on people and the environment, and assess whether it is material or not - here the value chain, i.e. suppliers, among others, must also be taken into account. At the same time, the selected topics must reflect the expectations of the report recipients, including banks, insurers and customers. As a company with many years of experience and already established, implemented procedures, we still have an easier task ahead of us than companies starting from scratch. On the other hand, nearly 1,000 days is still plenty of time to prepare solidly for it.
Under the microscope of banks and insurers
A very interesting development is the change in the target group of our report. Initially, they were mainly our customers, of which - as a logistics company - we have a very large number in our portfolio. They were and still are interested in how we approach social and environmental issues, and with the development of reporting as a process came elements of corporate governance. Later on, the report's readers included financing institutions who want to know Raben Group's exposure to various risks, and, at the same time, what progress is being made in meeting sustainability goals, including those related to our Sustainability Linked Loan. The Global Risk Report 2023, published by the World Economic Forum, confirms that climate change will generate key risks facing the global economy in the coming years. Extreme weather events and their social and economic consequences are bound to affect the global supply chain and, consequently, the functioning of our industry.
Not surprisingly, this issue is also receiving increased attention from insurers. They, in turn, seek to assess the risk based on information on how we manage the aforementioned area of strategic importance, which, although dealing with non-financial issues, can weigh on the financial health of the company. Finally, we as Raben Group have a keen interest in how and how strongly we interact with the social and natural environment. Both we and our stakeholders have a growing understanding of climate change and its impact on societies. Out of this awareness comes the desire to monitor one's performance and improve it where possible and necessary, and then share the results with others. At the moment there is no better tool for this than the report.
The shorter, the better
However, not every report will do the job well. It is not enough to simply aggregate data and information that is important to key audiences - it still needs to be presented appropriately. It is therefore important to adapt both the content - information and language - and the form of the report to the readers. With this in mind, it is possible to develop a more attractive, multimedia and interactive report or a traditional, conservative one. Importantly, the entry into force of the new directive and the approximation of the sustainability report formula to the financial report will also have an impact on the layout. Therefore, when working on the report, it is advisable to already start exchanging experiences with those responsible for communicating with key stakeholders, primarily customers, investors, shareholders, whose perspective may be of great importance for the final shape of the report.
At the same time, it must be remembered at all times that the content and quality of the information is crucial, as the sustainability report will be subject to a mandatory independent audit in accordance with the directive. There are still many entities - including Polish ones - that need to learn how to communicate information concisely and transparently. The publication The Global ESG Monitor 2022, which summarises the non-financial reports of companies listed on the 10 largest stock market indices (also including the WIG 20), shows that our domestic companies are inferior to global ones in terms of the quality of their disclosures, while they are far ahead in terms of the length of their reports. Meanwhile, the huge number of pages filled with content often makes it difficult to access the most important information and even discourages people from reaching for the report.
Finally, it is worth emphasising that a report is never an end in itself. Rather, it is the latest stop on the company's journey towards a more sustainable model for its business. There are several points along the way: the development of a strategy backed up by the setting of goals and the formulation of commitments that point the way forward, the implementation of concrete actions and initiatives, and only finally the reporting of results.
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