In 2024, environmental, social, and governance (ESG) reporting will bear the impact of new regulations worldwide, particularly in the European Union (EU). More pertinently, it’s becoming a priority for investors and consumers, pushing enterprises and small businesses to rethink their carbon footprint. 

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Consider this: The 2023 KPMG CEO Outlook survey found that 45% of CEOs prioritise ESG and believe it’s important for improving financial performance. It’s also (painfully) clear that ESG regulations are a key element in the global efforts to uphold the Paris Agreement and achieve climate targets.  

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In this article, we’ll zero in on ESG trends and regulations in 2024, focusing on Europe. We’ll also list key events scheduled to take place where ESG leadership and innovators come together to discuss solutions. 

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The question is, will you be affected by ESG regulations? Let’s find out! 

New ESG reporting regulations in 2024 in the EU 

The EU's Corporate Sustainability Reporting Directive (CSRD) is set to go into effect at the start of 2024. It’s the most comprehensive (and stringent, yikes) corporate reporting regulation that will bring sweeping changes to how companies report their emissions. 

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The EU has also introduced the European Sustainability Reporting Standards (ESRS), a new framework for ESG reporting for companies affected by the CSRD. It comprises 12 standards, two generalised, five related to environmental impact, four covering social impact and one on governance. With CSRD and ESRS, the EU aims to bring more transparency (and more initialisms) in ESG reporting and target a broader base of businesses operating in the block. 

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Here’s a large number to put things into perspective: 50,000. 

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That’s the estimated number of targeted businesses in the region that will be affected by the new regulations, which is more far-reaching than its predecessor directive.

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The new ESG reporting regulations essentially make value chain emissions necessary. The CSRD conditions also apply to international companies with subsidies registered in the EU countries. Put bluntly, there’s no escaping these regulations (no matter what interdimensional portal you try to conjure). 

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Although the directive will go into effect in stages, 2024 marks the beginning of the change businesses must adapt to regarding ESG reporting. The reporting requirements will indirectly bring companies in and outside Europe under the umbrella for more accurate and transparent carbon accounting. 

5 key trends in ESG reporting 2024

The field of ESG, in general, is going through a renaissance. Here are the emerging trends in ESG that will impact reporting in 2024:

ESG reporting for smaller companies

With more stringent regulations going into effect in 2024 in several regions and more in the works, more businesses are expected to be required to report their emissions, social impact and governing practices. 

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For instance, CSRD in the EU doesn’t yet target small businesses, but it’s under consideration for the future. Even if small businesses aren’t targeted directly by directives, they may have to calculate and report their carbon footprint if they do business with corporations with mandatory reporting requirements. 

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In short, smaller B2B companies are more likely than ever to be directly and indirectly required to report their ESG data in 2024. 

ESG to become an integral part of finance

For years, ESG has been seen as merely a requirement by corporate leadership, especially finance leaders. However, with the changing attitudes of investors and more scrutiny on financed emissions, ESG targets are likely to become an essential component of financial strategies. 

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Besides, there’s evidence that incorporating sustainable and fair practices can lead to better financial performance and new opportunities to expand to different consumer bases and markets. Who doesn’t like the sound of $$$? 

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By 2024, ESG will essentially become a domain of finance leadership in big corporations worldwide, particularly in the EU and North America. 

Greenwashing under the microscope

With more transparent reporting requirements, companies may no longer be able to hide their real emissions behind greenwashing campaigns. 

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The EU, again, is leading the charge in battling greenwashing, banning it by introducing new legislation to target companies that make false sustainability claims. 

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Companies found guilty of misreporting and greenwashing can face fines worth millions. A subsidy of Deutsche Bank was fined $19 million in the US in 2023. So, what was acceptable (questionably so), in the last few years is slated to become a serious financial liability. 

More value chain transparency

Companies in the West may have made commendable advances in reducing their carbon footprint, but have fallen short in targeting their emissions down the supply and value chains. Either due to the complexity or sheer ignorance, Scope 3 (as per GHG Protocol) emissions have been vastly underreported. 

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However, that’s about to change.

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Regulations, such as the CSRD, now mandate Scope 3 emissions, which will pass the burden of collecting ESG data down the supply chain. In other words, suppliers will have to begin collecting and reporting ESG data beginning in 2024 if they already don’t. 

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Data accuracy is a different question, though, which may require some work. However, the International Sustainability Standards Board (ISSB) has introduced a better framework for Scope 3 reporting to make the supply chain more transparent. 

Investment in ESG management

With ESG reporting and initiatives becoming integral to businesses in regions like North America and Europe, corporations are inclined to invest more in ESG-related operations. 

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They’re likely to have dedicated personnel for ESG management, who are in charge of developing environmental and social policies and overseeing mandatory ESG reporting according to applicable standards. 

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In 2024 and beyond, more companies will hire ESG managers and analysts. Smaller companies may designate existing managers to oversee ESG policies and reporting, but whichever route is taken, their primary responsibility will be understanding the regulations and ensuring compliance. No small task! 

ESG conferences to look out for in 2024

Many organisations will host ESG events to offer opportunities for investors, business leaders, and climate advocates to discuss developments in ESG standards and initiatives. 

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No matter where you are, you can likely attend an ESG conference. Here are just a handful of events scheduled for 2024:

• World ESG Summit - February (Saudi Arabia)
• Responsible Business USA - March (New York)
• ESG Focus: Sustainable Investment Strategy Summit - March (London)
• Sustainability Week US - June (New York)
• Responsible Business Europe - June (London)
• Aspen ESG Summit - July (Aspen, Colorado)
• Sustainable Investment Europe - September (London)
• Verge 24 - October (San Jose, California)
• ESG Summit Europe - October (Madrid, Spain)
• Green Summit Denmark - TBA (Denmark)

Preparing for the changes

2024 looks set to bring big changes to ESG in many parts of the world. Businesses in the EU and greater Europe must comply with new regulations and become more transparent with their reporting, and tougher regulations mean a greater need for more accurate carbon accounting and energy consumption, vital to ESG reporting. 

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If your company wants to get a step ahead – and stay there – get accurate data in your reporting. comundo’s solution gives you just that. It’s not based on estimates but hard data that ensures your business satisfies shareholders and reports accurate data to the authorities. More importantly, it empowers you to make the right decisions for efficiency.