Late last year, the Official Journal of the European Union announced EU Directive 2022/2464, a significant milestone in the journey towards greater transparency and responsibility in corporate sustainability reporting practices.
Bluechip Technologies have extensive experience in Data Management and Enterprise Performance Management (EPM), and are well placed to take an authoritative and well-researched look at the future of Corporate Sustainability Reporting.
Issued by the European Parliament and Council of the EU, it marked a significant milestone in the journey towards greater transparency and responsibility in corporate practices.
Here at Bluechip Technologies, we have extensive experience in data management and Enterprise Performance Management (EPM), and so are well placed to take an authoritative and well-researched look at the future of Corporate Sustainability Reporting.
The adjacent though leadership paper gives a comprehensive and in-depth report, and below we have summarised some of our topline findings…
Background: The EU’s Bold Move
So why is this coming into effect?
EU law now mandates that all large companies and listed entities, excluding micro-enterprises, disclose comprehensive information on their perception of social and environmental risks and opportunities.
Additionally, from 2024 (with reports published from 2025), companies must report on the impact of their operations on people and the environment.
Approximately 50,000 companies will be required to adhere to the European Sustainability Reporting Standards (ESRS).
Understanding ESG
Environmental, Social, and Governance (ESG) principles go beyond just environmental commitments and carbon neutrality. ESG, according to Investopedia, represents “a set of standards for a company’s behaviour used by socially conscious investors to screen potential investments”.
The African Perspective
While the EU is at the forefront of ESG reporting, African countries are also embarking on this journey.
Working within the African continent, here at Bluechip we expect that in time ESG reporting requirements and standards will extend to the region.
Nigeria, for example, as the largest economy in Sub-Saharan Africa, is of particular interest as it currently in the process of aligning its goals with ESG principles, with ambitious targets like ‘Net Zero’ by 2050-2070 outlined in the 2021 Climate Change Act. Many of Nigeria’s largest companies are already making strides in ESG reporting. For instance, Dangote Cement, MTN Nigeria, Airtel Africa, BUA Cement, Nestle Nigeria, and others have publicly articulated their ESG strategies.
What is The Role of Supply Chains?
As larger companies commit to ESG reporting, they are increasingly extending these expectations to their supply chains. This means that suppliers will need to embrace ESG commitments, policies, and reporting standards to continue partnering with major corporations.
Challenges and the Way Forward
Accuracy, consistency, and transparency is paramount. While ESG reporting is gaining momentum, the challenge lies in accurate data collection, collation, and reporting. The data sets needed for ESG reporting are extensive and diverse, covering everything from climate change to human rights.
What is The Role of Enterprise Performance Management (EPM)?
Enterprise Performance Management solutions, such as Oracle Fusion Cloud EPM, can play a pivotal role in ESG reporting. These systems can help integrate financial and non-financial data, providing accurate insights and aiding in the planning and management of ESG practices.
Conclusion
Bluechip Technologies is equipped to help organizations meet the growing demands of ESG reporting by creating ‘a single source of the truth’, integrating disparate data sources, and implementing robust data governance policies to enable accurate Sustainability reporting.
As ESG reporting continues to evolve, businesses and countries must adapt to meet new standards and expectations. The journey toward sustainability, transparency, and accountability is just the beginning, and organizations that proactively embrace these principles today will be better prepared for the future.
Our paper, ‘Environmental, Social and Governance Reporting – An African Dimension’ is downloadable here.
To find out more and see how Bluechip Technologies can help you navigate this path, contact us.
