There’s a lot of talk about the challenges posed by European regulations surrounding sustainability reporting. This sometimes fuels resistance. But we should really shift our focus. Business leaders can no longer afford to ignore sustainability. The question is: how do you want to prepare your company for the future? Sustainability isn’t just the future; it also offers opportunities. However, this requires vision and courage. Sustainability reporting is merely a tool to prepare your organization for a future-oriented approach.
Integrating sustainability into your business model benefits the environment, society, and good governance. This is precisely what the Environmental, Social, and Governance (ESG) standards represent, which are clearly outlined in the new European regulations: the Corporate Sustainability Reporting Directive (CSRD). I am convinced that if companies carefully document, justify, and comply with their choices, there will be no obstacles. In fact, they can even benefit from it. Sustainability reporting can open the door to new business opportunities. However, this does require personal leadership from the top of the organization, and the courage to innovate.
CSRD is no excuse
Yes, complying with these rules takes time and effort. And yes, because these are new regulations, there is still a lot of uncertainty. But let’s not forget that it also took decades to develop a standard for financial reporting, and it is being further refined every year. Europe is now trying to achieve the same level of ESG reporting within a few years. However, this shouldn’t be a reason for leaders to sit idly by.
Getting started: recording and improving
We work with companies daily to monitor their impact and improve based on that. We often start with the business processes and materials that have the greatest impact. What do we look at then? Think of adjusting your energy mix or using different materials in your products. Investigate whether you can use more recycled materials or see if you can shorten transport distances by purchasing closer to home. Good reporting on why you make certain choices creates understanding and support. Accountants, too, will be flexible, especially in the initial years, with reporting that is transparent and fair. It’s all about openness; it’s certainly not a competition.
Avoid lawsuits from NGOs
What’s essential is that business leaders are willing to examine their own processes and activities. Let’s be honest: most companies know where the bottlenecks lie. Besides looking back, the CSRD also requires companies to look ahead: what steps will they take in the coming years? This is the real challenge. A lack of ambition and openness only leads to more resistance. Organizations like Friends of the Earth Netherlands (Milieudefensie) or Urgenda prefer not to pursue legal action. They want to accelerate progress toward a more sustainable economy and follow developments with great interest.
Kennedy’s words as inspiration
Let’s emphasize the challenge and be inspired by President Kennedy’s 1962 words about innovation: “We choose to go to the moon this decade
and do different things, not because they’re easy, but precisely because they’re hard.” This emphasizes personal leadership. We must acknowledge that we’re not yet perfect when it comes to ESG, but we must also have the courage to be transparent and take ambitious steps. “Choose to move towards sustainability.” Today, the need for renewal and innovation is even greater than in the 1960s. And if there’s one country in Europe that can lead this transition, it’s the Netherlands. Let’s get started!
Lenny van Klink
Co-founder Salacia Solutions
