In a recent post by Position Green, the firm outlined how its technology can help to transform sustainability reporting in the EU.
The Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) are swiftly becoming a focal point for sustainability professionals across the European Union. The mandate for companies to align with these regulations requires a deep dive into the European Financial Reporting Advisory Group’s (EFRAG) guidelines, aiming to develop comprehensive processes that adhere to the new legislative framework.
Position Green steps in with a software solution purposefully engineered for the ESRS challenges, equipped with the acumen of seasoned sustainability advisors. Felicia Gustafson, leading Group Product Management at Position Green, and Olivia Krall, a distinguished Manager and Sustainability Advisor, delve into the software’s development process, highlighting the meticulous decisions made to ensure its effectiveness.
At the heart of the ESRS roadmap to success is the double materiality assessment feature of Position Green’s software. This critical functionality supports organizations in documenting their sustainability considerations and disclosure requirements. It facilitates a streamlined reporting setup, allowing for the seamless addition of identified material disclosures. Moreover, this feature is instrumental in gearing companies for the mandatory assurance process by providing essential documentation and traceability. The software’s capability to store double materiality assessment results simplifies the annual review and adjustment of material topics and disclosures.
The development of the software’s double materiality assessment functionality was guided by the ESRS 1 requirements and EFRAG’s guidelines. Position Green’s approach ensures compliance through mandatory input fields while offering flexibility with optional inputs derived from expert advice and best practices. This methodology underscores the software’s adaptability and its foundation in thorough sustainability expertise.
The double materiality assessment bifurcates into impact materiality and financial materiality, with the former drawing on frameworks like the UN Guiding Principles for Businesses and Human Rights and the OECD Guidelines for multinational enterprises. The impact materiality scoring hinges on the scale, scope, remediability, and likelihood of sustainability impacts, establishing a nuanced understanding of severity.
Conversely, the financial materiality scoring embedded within the software reflects Position Green’s advisory expertise, focusing on the financial impact’s size and its probability. This dual-materiality framework ensures that both sustainability and financial impacts are meticulously evaluated, providing a comprehensive tool for ESRS compliance.
Position Green’s software emerges as a pivotal resource for companies navigating the complex landscape of EU sustainability reporting. Its development, rooted in both regulatory requirements and practical expertise, offers a robust solution for achieving compliance and advancing corporate sustainability efforts.
Read the full post here.
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