5 hints on how companies can get a grip on their reporting requirements

New sustainability reporting obligations such as the ESRS (European Sustainability Reporting Standards) are making members of management boards uneasy. However, many of the new regulations are based on existing ISO certifications and can be implemented relatively easily on the basis of future-oriented integrated management systems.

EU taxonomy, supply chain law, Corporate Sustainability Reporting Directive (CSRD), digital accessibility and the ESRS – many companies find it challenging to comply with all these reporting requirements and are searching for guidance. Axel Dick and Anneli Fischer, who are responsible for ESG at Quality Austria, recommend building on existing ISO management systems such as ISO 14001 environmental management, ISO 45001 occupational health and security or ISO 37301 (compliance management) and processes and give five tips on how to implement the ESRS.

“Obligatory reporting standards are necessary in order to create consistent quality at European level and to provide transparency and guidance for decision-makers. Companies that already work with integrated management systems and are certified have a clear advantage, as the planned reporting requirements are based on many existing ISO management systems ,” says Axel Dick, Head of Business Development Environment and Energy, ESG, Quality Austria.

“Sustainability is no longer a niche topic but is starting to become business as usual. Consumers are looking for orientation when it comes to product information, potential employees find responsible corporate governance increasingly important. Moreover, investors will more often take sustainability criteria into account in the future. Companies should therefore not only see reporting as a challenge, but also as a great opportunity. After all, interest groups such as investors or other potential cooperation partners will use sustainability reports to assess the image of a company and how prepared it is for future trends and challenges. Investment decisions will increasingly be based on these type of analyses,” says Anneli Fischer, Head of ESG at Quality Austria.

1) Creating interdisciplinary teams

Like most reporting obligations, the ESRS is interdisciplinary material. The experts at Quality Austria recommend forming project groups that cover different areas of the company and jointly develop objectives and, above all, timetables. In this way, different interests can be brought in and at the same time the results can be communicated back to the respective departments in a low-threshold manner.

2) Identifying gaps

Once the team has been determined, a gap analysis between the future requirements and the existing management system is recommended. Specific work packages can be derived from this. In addition, comprehensive internal analyses in combination with the creation of schedules identify internal competence gaps that should be closed in good time.

Quality Austria offers, for example, (in German language) the accredited course series “Sustainability and ESG Management” as well as special seminars on greenhouse gas balancing, the preparation of the double materiality analysis or in the field of circular economy. Find out more here!

3) Implementing the concept of dual significance

The principle of dual significance obliges companies to consider sustainability from two different perspectives and their interactions. A sustainability aspect fulfills the criteria of dual materiality if it is material from either the outside-in perspective, the inside-out perspective or both. The dual materiality analysis is carried out in three steps: 1) understanding the context; 2) identifying material topics and their impacts; 3) assessing materiality, which leads to the creation of a final list for sustainability reporting.

Here, ISO-certified companies can build on the required context analysis in ISO 9001 (quality management), ISO 14001 (environmental management), ISO 45001 (occupational health and safety management), ISO 37001 (anti-bribery management) and many others.

4) Align parameters (KPIs) and target definitions with ESRS

Already applied KPIs can be an important starting point for the ESRS. These should be compared with the stated targets and parameters in the ESRS and be adapted accordingly. At the same time, many ISO certifications already fulfill key aspects of new reporting obligations. A comparison prevents duplicate reporting.

5) Start trial run in 2025

No premiere takes place without a general rehearsal. The experts at Quality Austria recommend a trial run in 2025 before the reporting obligation for large corporations comes into force in 2026 and for listed SMEs in 2027.

“With all the preparatory steps for the ESRS, integrated management systems create a solid foundation for ESG and sustainability reporting. On their foundation, the ISO language world can be translated into the ESG language world and vice versa. This often leads to 'aha' moments for those responsible, who realize that they are already fulfilling many aspects of the new reporting requirements,” says Dick.