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Sustainability as an Opportunity

One of the biggest challenges of our time is how to achieve sustainability. The Green Deal for Europe, Fit for 55, taxonomy, CSRD, carbon footprint, ESG and many other concepts are changing the business world and offering companies new prospects for development.

Take advantage of the opportunities arising from green legislation to get a head start and a competitive advantage. Doing business responsibly will also help you obtain better financing or new talent for your future growth.

Corporate sustainability is based on three pillars - ESG - i.e. the relationship to the environment, people and the way the company is managed. ESG significantly shapes corporate reputation

ESG

Sustainable business

ENVIROMENTAL ("E")

energy consumption
greenhouse gas emissions
protection of water resources
promoting biodiversity
pollution and waste management

SOCIAL ("S")

working conditions, non-discrimination and equal opportunities
health and safety at work
protection of human rights
protection of personal data
social relations
supplier-customer relations
product responsibility
local communities

GOVERNANCE ("G")

independence of the Board of Directors
independence of procedures for the prevention and detection of unethical and corrupt behaviour
audit and control processes
remuneration of stakeholders
shareholder rights
ethical conduct

European legislation

Europe has set itself the ultimate goal of being carbon neutral and sustainable by 2050. To meet this commitment, it has developed a roadmap for transforming the European economy, the Green Deal. The related legislation is still evolving. The Green Deal is intended to set a binding framework that will lead to a 55% reduction in EU greenhouse gas emissions by 2030 compared to 1990. This is the current Fit for 55 package, which introduces new rules in areas such as climate, energy and transport.

Finance plays a central role in the transition to carbon neutrality. In order to channel it into sustainable projects and companies, an assessment framework for sustainable activities called the EU Taxonomy has been developed. It classifies sustainable activities in 6 main areas.

It is already clear that companies that do not reflect the developments in the field of sustainability in Europe will cease to be competitive in the next few years, and not only in Europe. Decarbonisation and ensuring sustainable supply chains are key areas where companies should take concrete steps towards sustainability.

ESG

ESG is an assessment framework for three areas of corporate governance - it looks at how environmentally friendly a company is, how people are treated and how the company is managed.

In order for a company to understand and realise its full ESG potential, it is beneficial to set the right ESG strategy. This is a long-term plan of action to mitigate risks and move the company forward in sustainability to be competitive and attractive to investors, employees and customers.

We will work with you to develop and set an effective ESG strategy to reflect the uniqueness of your company and help you compete in the future. Complete our free ESG intake questionnaire to find out where your company stands in this area. The questionnaire can be found here.

As part of our ESG services, we have prepared a one-step process to help you effectively analyze your current state, detect strengths and areas for improvement.
All in a simple three-step process:

1. Entry questionnaire

Step 1 in the company's ESG orientation.

2. ESG questionnaire

Step 2 is to complete a more detailed questionnaire to identify ESG strengths and weaknesses, which will help you to effectively analyse the current situation and identify areas for improvement.

3. ESG analysis

Step 3 is a detailed analysis of your ESG strengths and weaknesses according to EFRAG standards and the identification of specific recommendations to help you develop a sustainable business.

Benefits of responsible business

Competitive advantages

For more than 50% of Czechs, corporate social responsibility can influence their purchasing decisions (Ipsos, 2020), up to 65% of Czechs are willing to pay extra for a socially responsible product.

Advantages on the labour market

Whether an employer behaves in a socially responsible way is important to 78% of people (Ipsps, 2019), with up to 94% of current university graduates

Supply chains

Large companies evaluate the sustainability of their subcontractors - preference for sustainable

Green financing

The banking sector must prioritise lending to sustainable companies

It is quite difficult for companies to follow the exact development of European legislation in the field of EU Taxonomy and corporate reporting. We will help you to find out where your company stands in this area and what are the most advantageous ways for you to align your business with the EUT classification.

ESG

Why care about the EU Taxonomy?

Similar classification systems are now being developed around the world. The aim is to create a common guide for investors and companies as to which activities can be considered sustainable and which cannot, based on technical screening criteria developed for each of the six EUT areas.

What economic activity is considered sustainable under EU Taxonomics?

Contributes significantly to one or more environmental objectives or is an intermediate or enabling activity

Mitigating climate change
Adaptation to climate change
Transition to a circular economy
Sustainable use and protection of water and marine resources
Prevention and reduction of pollution
Biodiversity and ecosystem protection and restoration

It does not cause substantial harm to any of the environmental objectives

Complies with the technical screening criteria in accordance with the Regulation

Adheres to minimum guarantees:

OECD guidelines
UN Guiding Principles on Business and Human Rights
ILO Declaration on Fundamental Rights and Principles at Work
the International Bill of Human Rights

A properly integrated annual report will show your shareholders and other stakeholders how your business model and strategy can add value for them.

ESG

ESG reporting

EU Regulation on the Taxonomy of Sustainable Activities effective from January 2022. Investors are thus obliged to disclose sustainability information under the SFDR and therefore require this data from their corporate clients as well. Based on the CSRD, large companies with more than 250 employees and a turnover of more than €50 million (approx. CZK 1.3 billion) will have to report their non-financial ESG data (how their operations affect the environment, what carbon footprint they produce or what impact they have on society) in addition to their traditional financial statements from 2024.

Large companies already require this data from their suppliers, and it is clear that in the future those SMEs that measure and document their ESG data, not just their business partners, will be favoured. In addition, preferential financing based on good ESG indicators will apply to all companies in the market.

Our ESG services

BDO experts have the knowledge and experience to help you develop or improve your ESG strategy, policy and reporting.

Training in sustainability, ESG and green legislation
ESG analysis including identification of ESG risks and opportunities for further development ESG rating and comparison with competitors
Setting up and improving processes subject to ESG reporting
Measurement of carbon footprint e.g. GHG Protocol methodology (scope 1 - 3) Preparation of report and action plan for carbon footprint reduction
Introduce non-financial reporting according to EU taxonomy, NFRD/CSRD or GRI Audit non-financial information and provide assurance to third parties on ESG
Advice on green finance