The sustainability report
ESG Compliance supports obligated companies (and those participating on a voluntary basis) in sustainability reporting and in the preparation of the related financial statements, as required by Legislative Decree No. 125 of 6th September 2024, which transposed Directive 2022/2464/EU of 14th December 2022, the Corporate Sustainability Reporting Directive, into Italian Law.Consultancy services in the preparation and/or evaluation of sustainability reports, integrated with corporate strategy and promoting corporate competitiveness in the market, enable the definition of a sustainability plan with the identification of related qualitative and quantitative goals.
Why produce a sustainability report?
1. Regulatory constraint
In Italy, Legislative Decree No. 125/2024, which transposed the Corporate Sustainability Reporting Directive, requires companies of a certain size to prepare sustainability reports and allows companies that are not required to do so to prepare them on a voluntary basis. Companies required to prepare sustainability reports must necessarily improve their performance not only within the corporate ecosystem (value chain), but also from a supply chain perspective. This will indirectly induce all companies (even those not required to do so) operating in the supply chain of the required companies to align their business processes with sustainability criteria.
2. Measure your sustainability levels (If you can't measure it, you can't improve it)
The drafting of the sustainability report is only the final step in a complex analysis process involving a multitude of often extremely diverse corporate aspects, whose primary goal is to measure the organisation's health in terms of sustainability..The sustainability report, therefore, together with all the activities involved in its preparation, acts on two temporal levels: - it provides an immediate snapshot of the main characteristics of the company's governance (relationship with stakeholders and business model adopted) and how all aspects are in line with the criteria set out in EU and national legislation and international soft law; - it clarifies to the company, from a forward-looking perspective, the best path to follow in order to optimise its sustainability rating.
3. Strengthening and characterising one's presence on the market
Drawing up a sustainability report for a company means understanding its state of health in terms of sustainability, assess the degree of effectiveness of measures to improve eco-friendly and socio-sustainable performance and, in a last step, understand its positioning on the market.Drawing up a sustainability report means having implemented a series of measures that improve the company as a whole, making it more resilient, giving it greater distinction in the market and, ultimately, making it more competitive.
4. Creditworthiness
The European Banking Authority's Guidelines (Loan Origination and Monitoring) on credit management and monitoring have included ESG factors in the risk assessment for granting credit to micro, SME and large enterprises, with the aim of ensuring that ESG risks are adequately considered in a transparent manner in the credit granting process. Bigger the organisation's sustainability, higher the chances to obtain credit access..
5. Other forms of access to credit
Organisations that tangibly demonstrate their sustainability – and, in this sense, the preparation of sustainability reports is the main disclosure tool – can raise funds from the market by issuing green, social and sustainable bonds, directing the financial flows collected towards the implementation of sustainable projects that can, in turn, increase the value of the organisation itself.
6. Award criteria in tenders with the Public Administration and tenders with private entities
Contracting authorities provide incentives, through the awarding of additional points, to companies that stand out for their implementation of eco-sustainable and circular business processes, for the absence of discriminatory policies and conduct in the last three years, and for the adoption of work-life balance programmes and tools and innovative forms of work organisation. Failure to disclose a sustainability report (where mandatory) could, for example, result in ineligibility for the tender; conversely, submitting a sustainability report on a voluntary basis could result in a reward. The sustainability report is therefore an effective tool, on the one hand, for verifying compliance with the criteria set out in European and national legislation on sustainability and, on the other, for obtaining rewards in public tenders and competitions that require the submission of this document.
7. Fight to greenwashing
As mentioned, the drafting of the sustainability report is the final step in a complex analysis process structured around a series of consulting activities designed to identify an organisation's strengths and weaknesses, indicating the best possible path towards continuous improvement. This is achieved through the implementation of specific company procedures which, among other things, mitigate, for the organisation, therisk of engaging in greenwashing, which is now heavily penalised and has serious economic and reputational consequences for the company , also in light of the regulatory provisions of Directive 2024/825/EU of 28th February 2024 (Greenwashing Directive).
Transformation into a Benefit Corporation
Consultancy activities for
- establishment of a benefit corporation
- transformation of an already existing firm in a benefit corporation
- assessment to determine the impact of the organisation to convert into a benefit corporation: if successful, the assessment leads to the company being certified as a benefit corporation
- reorganisation of the corporate structure and business objectives with a view to pursuing the common good and complying with the obligations imposed by the relevant legislation, including with regard to the preparation of detailed reports on benefit activities
- supporting the control body in its internal auditing activities, ensuring that the administrative body pursues the corporate purpose in accordance with the obligations of the benefit regulations
- identification, including through outsourcing, of the responsible party to whom functions and tasks can be entrusted in order to achieve the objectives of common benefit
- legal assistance and advice in the event of administrative fines imposed by the Italian Competition Authority for misleading use of the term benefit corporation due to failure to comply with the obligations imposed by the relevant legislation (unfair competition, unfair commercial practices, etc.)
Sustainable investments and
creditworthiness
Consultancy services for micro-enterprises, SMEs and large enterprises to assess and mitigate ESG risks in relation to projects for which financing is sought from credit institutions.
Sustainable investments and
green bonds
Evaluation of the actual sustainability of projects financed by green bonds, in order to protect the company from reputational risk and prevent it from engaging in greenwashing.
Responsible management of the supply chain (sustainability supply chain management)
Use of blockchain technology to notarise steps, materials, places and people responsible for a segment of the company's supply chain, in order to enable total traceability of the supply chain in a transparent, unalterable, public, extremely secure and verifiable manner by users, and ultimately certify the entire chain as sustainable.
ESG Rating and Circularity Rating
Evaluation and monitoring of the sustainability level of companies, using state-of-the-art application software and a digital platform developed in-house, in order to determine the ESG rating, which leads to the qualification of the company as sustainable.
Tax consultancy
Support for businesses in identifying opportunities and/or incentives provided by tax support measures related to the allocation of Next Generation EU funds for sustainability.
Legal advice
Legal advice in the event of sanctions by Consob and in civil proceedings before the competent Court of Appeal.
Business crises and ESG factors
Monitoring of corporate alert systems, as part of business crisis risk prevention activities, in order to intervene promptly at the first signs, when the company still retains its value.
Company evaluation in the ESG world
Assessment of companies in relation to their impact on environmental, social and governance issues, with a view to creating a tool that complements traditional ratings and assesses a company's creditworthiness.