ESG reporting trends unpacked: What you need to know to get ahead

Shifting from compliance to strategic ESG reporting

ESG reporting is evolving from a regulatory task into a powerful tool for driving innovation and competitiveness. Companies that recognize this shift can position themselves for long-term success. Although there may be short-term challenges, such as the costs associated with data collection and assessments, embracing ESG reporting as a strategic opportunity can help companies future-proof their operations.

For organizations with decentralized structures, aligning sustainability reporting with the company’s values across different locations can be difficult, but it is essential. This involves empowering local teams to take charge of sustainability efforts while ensuring they have the guidance needed to meet broader organizational goals.

Companies that build a solid internal understanding of the purpose behind ESG reporting will be better equipped to use it as a tool for long-term success.

Rising importance of double materiality in shaping business outcomes

Double Materiality Assessments (DMA) are becoming a central focus for companies striving to meet CSRD requirements. These assessments are key to identifying both risks and opportunities that impact the company’s future.

Conducting a thorough DMA allows organizations to uncover vulnerabilities in their business models and identify areas for growth and innovation. It also enables companies to align their ESG efforts with both regulatory requirements and business objectives.

Companies are increasingly finding that a properly executed DMA not only strengthens transparency and resilience but also helps integrate sustainability into their core operations. This trend highlights the growing recognition of ESG reporting as a tool that goes beyond compliance and drives real value creation.

“If your double materiality assessment is superficial, you miss the real opportunities for growth and innovation.”

Ted Paulus, Senior Director at Position Green

The push for interoperability amid global standards

As global ESG frameworks like GRI and IFRS increasingly overlap, some companies are navigating multiple reporting requirements.Companies must streamline data collection processes to avoid double reporting and ensure efficiency. The overlapping of these frameworks means businesses need to consolidate their ESG data into one system that can adapt to different standards, such as the ESRS.

Treating ESG data with the same rigor as financial data helps simplify compliance while empowering companies to use this data strategically. By reducing inefficiencies and ensuring reporting consistency, businesses can drive better decision-making and enhance long-term value creation.

Emphasis on pragmatic value chain mapping

Value chain mapping has become a critical aspect of effective ESG reporting, particularly for companies with complex, multi-tiered supply networks. Engaging stakeholders across the supply chain is essential to ensure responsible practices are followed at every level. IT solutions play a crucial role in managing the complexity of these networks by helping companies track and analyze data.

However, the key to successful value chain mapping lies in focusing on the “why” behind these efforts. Companies that align their value chain initiatives with their broader purpose and go beyond compliance will drive real impact. This requires clear communication about the importance of ESG reporting throughout the organization, ensuring that all departments are united in their approach.

Challenges in the future of ESG Reporting

While ESG reporting presents significant opportunities, it also poses challenges, particularly for companies with non-EU-based suppliers. The stringent requirements of EU legislation can create barriers for smaller suppliers outside the region, potentially disrupting global supply chains.

Addressing these challenges requires a mix of regulatory adjustments and enhanced support for impacted suppliers. Additionally, there is a growing concern that identifying multiple material topics during a DMA could be seen as a risk by investors.

However, transparency is key—disclosing material topics is better than concealing potential issues. By framing these topics as opportunities for growth and resilience, companies can manage investor expectations and demonstrate how their ESG efforts contribute to long-term value creation.

Position Act 2024: ESG reporting trends unpacked: What you need to know to get ahead

At our annual community event, Position Act, Julia Staunig (Position Green), Ted Paulus (Position Green), Sandy Schrøder (Reitan Retail) and Stine Kirstein Junge (UNDP Nordic Representation Office) participated in a panel to discuss ESG reporting trends. In case you missed it, get the recording sent your email and find out more ESG reporting trends according to the experts.