ESG - G in the spotlight
European legislation around sustainability reporting (CSRD) aims to share information about a company's ESG performance. ESG includes the 3 pillars "Environmental", "Social" and "Governance." Under ESG, companies can explain their environmental, people and good governance efforts.
In this article, we take a closer look at the governance (G) pillar, which consists of 6 themes:
- Company policies and culture
- Management of relationships with suppliers
- Prevention and detection of corruption and bribery
- Cases of corruption or bribery
- Political influence and lobbying activities
- Payment practices
When it comes to sustainability, attention is traditionally focused primarily on environmental (E) and social (S) topics, with governance (G) being the least highlighted. Yet a strong commitment to governance is critical within your ESG story. Governance is the linchpin to the E and S standards, as good governance allows your company to incorporate these other measures into your policy. So be sure to pay sufficient attention to governance, so that your sustainable foundations are strong enough to support all ESG measures.
Report on governance within your company
The 6 themes of governance can be divided into 2 categories:
- 3 themes relate to impact, risks and opportunities
- 3 themes relate to data and objectives
Below we would like to provide you with an outline with some examples on the 6 themes of governance you should report on in your sustainability report. The examples cited are not exhaustive.
Impact on the E and S pillars
As cited in the introduction to this article, the governance pillar is the foundation of your sustainability measures. Because of this, there are often cross-references to the E or S pillars. Below we zoom in on one of the topics within the governance pillar: 'management of supplier relationships'.
One of the main features of sustainability reporting according to CSRD is that you should report not only on your company's sustainable efforts, but also what happens prior to the production of your goods and after the production of your goods (the value chain).
So within the governance pillar you will also have to indicate on the basis of which (non-financial) criteria you cooperate with suppliers. For example, you will have to indicate whether your supplier selection takes environmental or social criteria into account and how you go about it.
The impact of disclosure of supplier selection criteria does not only directly affect large companies that are required to produce a sustainability report. It also affects smaller companies that supply large corporations. There is a real chance that in the coming years, SMEs will face questions from large customers about their commitment to environmental (E) and social (S) issues, as these customers are required to report on them.
How does Titeca Pro Accountants & Experts commit to governance in a sustainable way?
Titeca Pro Accountants & Experts deals with a large amount of confidential data on a daily basis. It is therefore of the utmost importance that we handle this data with the utmost care in order to secure it as well as possible. Therefore, in our double materiality analysis, data security emerges as very important.
Sustainable business goes hand in hand with cybersecurity. In what ways can we protect our digital workplace so that it can last forever? How can we maintain our continuity as an organization? In what way do we keep the door closed to outside malicious actors? These are questions that Gunther Kint, IT professional at Titeca Pro Accountants & Experts, considers this on a daily basis. "It is an illusion that only the largest companies are a target for hackers. Cybersecurity is everyone's business."
Are you like us all the way pro sustainability? Then check out our sustainability page or enroll now in our Titeca Pro Academy.
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