How does ESG affect business in your sector?

ESG is becoming increasingly important for companies and the European Union, shaping the regulatory, political and social framework.

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Going through this page you will find all the materials that aim to share the knowledge on how to effectively incorporate sustainable development (ESG) factors into your business strategy, increasing the competitiveness of your company.

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ESG (Environmental, Social, Corporate Governance)

includes environmental, social responsibility and corporate governance issues. All this together is a criterion for evaluating the sustainable development of enterprises.

Check out our materials to see how ESG affects your business.

%

of Private Equity funds

always check the companies they want to invest in terms of ESG risks and opportunities.¹

%

of banks in Poland

plan to transform credit risk management process, taking into account ESG factors in a quantitative way.²

%

of consumers

indicate that they are more likely to choose companies that are active in the social impact area. Diversity in the organization is not a topic that only pioneers take up, but becomes part of a broader discussion.³

ok.

companies in Poland

are currently covered by the non-financial reporting (ESG) obligation. Starting from 2025 this will be about 3,500 companies. This requirement will indirectly apply to organizations cooperating within the supply chain with the reporting companies.⁴

Sources:

1 Global Private Equity Responsible Investment Survey
2 Green Finance in Poland 2022 edition
3 PwC Consumer Intelligence Series
4 Estimated data according to the Central Statistical Office

Check our latest publications in the ESG area

How does ESG affect your business?

In order to provide a stimulus for real economic change, the European Union (EU) is focusing its actions on the financial sector, starting from redirecting funding towards sustainable business activity. For this reason, financial institutions will have to incorporate non-financial opportunities and risks into their investment and financing process. This necessitates a certain balancing of investment portfolios. Consequently, investors need relevant competencies and tools to assess companies from the perspective of ESG as well as access to comparable and reliable non-financial information, disclosed by companies in a consistent and comprehensive manner.

Behind the acronym ‘ESG’ there are a number of issues - not all of them will be equally relevant to every industry. For example, a financial services firm might be more focused on human capital and data security, while a food manufacturer might be more concerned with how it sources its raw materials.

The company's path to a sustainable strategy includes several important steps.

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A company’s path to sustainability includes several important steps. Each company must take into account the conditions in which it operates: the sector, the legal regulations, the structure of ownership, and the level of maturity in the area of climate, social responsibility, and corporate governance, combined with the expectations and requirements of stakeholders and investors as well as its own business goals.

Although not all companies are directly covered by the regulations, they might be indirectly obliged to implement them in order to maintain customers and market competitiveness, or to obtain bank financing. For example, there might be a requirement to disclose non-financial information for the reporting needs of their clients or due to participation in tenders.

Financial services sector
Private equity portfolio companies
Companies planning to launch an IPO/issue bonds
Global investors (after 2025 also smaller entities)
Listed companies

Organizations seeking financing from banks
Companies that care about the environment and the local community
Business transformation leaders
Companies looking to attract talents
Companies wishing to increase their competitiveness on the market (for example in tendering procesess)

Areas to consider when including ESG factors in the company's strategy

Market pressure and trends, including ownership requirements
Compliance – non-financial reporting
Compliance – tax and legal provisions
Capital raising and financing possibilities

Market pressure and trends, including ownership requirements

Integrating business strategy with sustainability/ESG strategy is a key step towards a company's long-term growth. Each of the three areas - E (environment), S (social responsibility), G (corporate governance) - brings a number of opportunities that, properly linked with business goals, can build the value of the company in the eyes of customers, employees, investors and other stakeholders. Other benefits related to the implementation of the ESG strategy are, for example: increased return on investment, increased employee motivation, obtaining subsidies for company development, or reduction of electricity costs.

The implementation of ESG objectives has an increasing impact on the conditions of bank financing.

Issues worth considering:

How should ESG goals be integrated into business strategies?
What sector benchmarks/trends should be identified in terms of ESG?
How to develop the solutions that foster long-term value creation in keeping with sustainable development?
How can resources be used effectively to boost the value of the company in the eyes of customers and investors?
How to carry out the energy transformation of the entire organization?
How can the majority owner’s ESG requirements be met?
How can a “net-zero” strategy be achieved?
How to sustainably manage company resources using technological tools and ERP systems?
How to obtain an EQUAL PAY Certificate?

Compliance – non-financial reporting

Shareholders and investors are placing growing emphasis on the importance of long-term, sustainable business models, which are measured by ESG reports that address environmental, social, and corporate governance issues. If companies do not publish high quality non-financial reports, they may soon face valuation problems as well as difficulties finding sources of financing and reaching out to investors and customers.

From the financial sector and capital markets all the way to all businesses regardless of the sector, non-financial reporting will be subject to strictly defined regulations and standards. Every company will be required to define and report on key risks and performance indicators in the area of ESG.

Issues worth considering:

How to prepare for CSRD and CSDD reporting?
How should technology be used to streamline the process of non-financial reporting?
How should KPIs related to the organization’s environmental and social impacts be defined and used?
How to map ESG benefits, opportunities and risks? (non-financial becoming financial)
How to set up a comprehensive process of collecting and analyzing ESG data?
How to respond on an ongoing basis to the needs of various stakeholders?
How to meet the majority owner’s requirements in the area of ESG?
How to measure, reduce, and report on an organization’s carbon footprint?
Is it possible to prepare a good quality non-financial report without implementing an ESG strategy?

Compliance – tax and legal provisions

The first aspect of ESG that our clients actually notice are the new regulations - national and EU. Entrepreneurs hear about the Green (R)evolution and above all want to have a sense of security and awareness that they are and will be compliant with broadly understood environmental requirements.

Issues worth considering:

How to effectively implement national and international ESG regulations in day-to-day tasks?
How to ensure compliance with the EU provisions on the SCIP database (a database of products containing hazardous substances) and PCN (a database of hazardous substances)?
How to be compliant with the concept of Extended Producer Responsibility ("ROP") and keep up to date with its subsequent elements entering the Polish legal system in the future?
How will electronic invoicing affect my business?
What legal support in the area of ESG will be needed?
Are there any possibilities to reduce liabilities due to new food and environmental taxes (sugar tax, capacity fee, deposit fee)?
How to run a business and make investment decisions in accordance with the taxonomy?
How to avoid the pitfalls of greenwashing and how to prepare for possible inspections in this area?

Capital raising and financing possibilities

Looking at the direction of regulatory changes and initiatives undertaken at the European Union level, it is clear that companies operating in accordance with sustainable development and ESG requirements will be rewarded, which will directly translate into opportunities to raise capital and financing. These regulations include, among others:

European Green Deal - action plan adopted by the European Commission: sustainable development strategy for the European Union;
NetZero - Climate-neutral Europe by 2050 - limiting global warming;
European Union budget 2021-2027 - close to 30% of funds allocated to 'green' transformation and digitalisation initiatives and investments.
Climate action support plan from the financial services sector. Regulation (EU) 2019/2088 has been in force since March 10, 2021. It obliges financial investors to report on the degree of sustainability of their investment portfolios. Moreover, financial institutions must consider non-financial risks and opportunities in their investment and financing process. Therefore, they need tools to assess ESG companies, as well as access to comparable and reliable non-financial information disclosed by companies in a consistent manner.

Companies that will not have regulated environmental, social or corporate governance issues in their operations - regardless of whether they are obliged to publish a non-financial report or not - may have difficulties or lose the opportunity to obtain financing for their development. Those organizations that choose to follow the path of sustainable development will have wider access to capital and more opportunities for funding.

Issues worth considering:

How to prepare for the capital raising process?
How to adjust the long-term investment plan to the possibility of obtaining external support in the form of grants, concessions or other preferences?
How to obtain public funding (including EU funding)?
How to diversify sources of financing by raising funds under the issue of ESG bonds?
How to invest in ESG-compliant entities?
How to verify sustainability performance in the investment preparation process (ESG Due Diligence)?

We help you in understanding the challenges of sustainability and implementing solutions to increase your company's competitiveness.

We offer comprehensive advice, e.g. in the areas of building a sustainable development/ESG strategy, non-financial reporting, project financing, tax and legal aspects of sustainability, implementation of technology and data security, building a sustainable supply chain and achieving the goal of climate neutrality.

Check how we can help