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ESG in ON BOARD
The ESG acronym covers three areas – Environment, Social and Governance. It is a system of sustainable investment that aims to build our future responsibly. And what, for example, falls under these areas?
- Methods of transport
- Use of resources
- Ecological footprint
- Climate change
- Training and education
- Working conditions
- Care for employees
- Equal opportunities for all
- Transparent taxation
- Shareholders’ rights
- Risk Management
In contrast, the CSRD (Corporate Sustainability Reporting Directive) is an EU directive introducing reporting obligations for large companies. It uses all three areas of ESG. The CSRD will have to be included in, for example, the annual report. The aim is to share its actions and results in the area of corporate social responsibility.
When will the CSRD affect you?
European Commission adopts CSRD
- Companies with more than 250 employees
- EUR 40 million in turnover
- EUR 20 million in assets
SMEs and other businesses
We have prepared a glossary of other important terms that are good to know:
- Carbon offset: a carbon offset, i.e. a reduction in CO2 or other greenhouse gases to offset emissions generated elsewhere. It is measured in tonnes of carbon dioxide equivalent (CO2e).
- Circular economy: a systematic approach to economic development that aims to eliminate waste by focusing on reducing consumption.
- CSR (Corporate Social Responsibility): is a type of international self-regulation aimed at contributing to social goals of a philanthropic, activist or charitable nature.
- CSRD report: a regular (usually annual) report published by companies to share their CSR actions and results.
- EUI (Energy Use Intensity): a way of expressing the energy consumption of a building in relation to its size or other characteristics. One calculation of EUI is to divide the annual energy consumption of a building by its area.
- Greenwashing: a form of promoting a product, service or company as being more environmentally friendly than it actually is by false advertising.
- IPCC (International Panel on Climate Change): a body created by the United Nations to provide scientific assessments of climate change, its impacts and future risks, as well as proposals for mitigating impacts and disturbances.
- ROI (Return on Investment): the ratio between the net profit earned and the cost of the investment. It is used to evaluate the efficiency of an investment or to compare the efficiency of a group of investments.
- SFDR (Sustainable Finance Disclosure Regulations): the Sustainable Finance Disclosure Regulation, which introduced various disclosure requirements for financial market participants and financial advisers at entity, service and product level.