Balkan Services offers services to prepare and set up a structured ESG* reporting organisation. With the new European regulations in the field of sustainability, for many companies non-financial reporting is being equated in importance and burden with financial reporting. Producing a report is the final step of a longer and multi-faceted process.
The path in this process, done correctly, should bring clarity, reduce stress in the organization, align understandings, and set ESG engagement levels across the team in a way that builds on and improves current organizational processes without changing them in any substantive way.
We conduct trainings and workshops to familiarize the team with the ESG terminology, regulations regarding non-financial reporting, best practices, and trends in the sector in which the company operates. The goal is to achieve a common understanding within the team about ESG, clarity for management on how ESG impacts the company and as well as selection of an optimal ESG management approach.
We organize a process to assess material topics as required by the CSRD and ESRS standards.
The assessment of the material topics is a key process for any company that has ESG reporting obligations and wishes to manage its environmental and social impacts more effectively. Based on the assessed material topics, the business identifies areas for targeting and reporting on sustainability matters. On the one hand, this ensures compliance with regulations. On the other, it defines the company's ESG focus and provides clarity on where management and reporting resources should be invested.
We assist the business in developing a comprehensive ESG strategy based on the identified material topics, the company's business strategy, the regulatory framework and market trends. The strategy includes setting ESG goals, defining key performance indicators and monitoring, and developing a plan with activities to support the sustainability agenda.
After materiality assessment process and ESG target setting, we determine the key reporting indicators and the level of detail of information that companies should collect and present in their non-financial report under the European Sustainability Reporting Standards (ESRS). Based on this step, companies have more clarity and can undertake specific activities to create an effective organization for collecting the required data, including identifying what additional customizations and enhancements are needed for the existing data management systems.
Create content for the non-financial report that includes the information available in the enterprise, expressed in quantitative and qualitative data, analyses, and graphs in an appropriate structure and logical connectivity. We fully comply with the reporting standards to produce sustainability statements which are ready to be provided to the auditing company.
We organise the EU Taxonomy assessment process, which includes induction training for the team, eligibility assessment, guidelines on how to achieve alignment, and the preparation of a declaration, which is an integral part of the non-financial reporting. The process involves the provision of information by representatives of management and the company's finance and accounting department.
*ESG
ESG is an umbrella term that refers to the 'environmental', 'social', and 'governance' aspects of a company's activities implemented through policies, standards, practices and initiatives. The measurement of individual ESG indicators is a form of tracking and analysing the development of corporate sustainability for the company.
Sustainability is a fundamental aspect of the business management process that is developed to varying degrees and in different aspects by companies. Societal expectations, tightening international and local legislation, increased investor scrutiny and heightened consumer demands require a new approach to managing sustainability issues. Individual stakeholders are demanding more engagement and transparency on how business manages its impacts on the three key areas of sustainability - environment (E), social (S) and corporate governance (G). Current regulations impose the need for formalisation and documentation of processes that concern the sustainability of companies.
**CSRD
CSRD stands for Corporate Sustainability Reporting Directive. The CSRD builds on the existing Non-Financial Reporting Directive (NFRD) by creating a host of additional sustainability reporting requirements and expanding the scope of obligated reporting entities. The goal is to improve the quality of available sustainability information, the accessibility of this information to investors and different stakeholders, and to help Europe develop a more sustainable economy.
***ESRS
The CSRD imposes the first 12 European Sustainability Reporting Standards (ESRS). The standards aim to improve the transparency of environmental, social, and corporate governance (ESG) reporting. Under ESRS, the information to be disclosed by companies is quantitative and qualitative in nature and includes:
- a description of processes for identifying and assessing material impacts, risks, and opportunities;
- policies, actions, and objectives related to the areas of impact;
- key indicators that represent the results of the implementation of management policies, as well as progress towards the commitments made by companies in each of the three ESG areas.
The initiative will increase the rigour and transparency of non-financial reporting to match th as of the financial reporting. Being mandatory for use and application for companies in scope, the ESRS standards create a process for embedding sustainability at the core of business processes and reporting.
****EU Taxonomy
The EU taxonomy is a key tool for EU to direct investments toward environmentally sustainable economic activities, in line with the objectives of the European Green Deal.
The EU taxonomy is a classification system that provides a description of technical criteria for individual economic activities. By meeting these criteria, companies demonstrate that the relevant business activities and investments are environmentally sustainable and contribute to at least one of the six environmental objectives of the EU Taxonomy.
