Sustainability Strategy and Reporting
It supports the process of preparing the company's sustainability reporting (EU Directive CSRD 12/2022 and Legislative Decree 254/2016) ensuring its governance in the various phasesTry KRC
The Sustainability Strategy and Reporting Module is one of the modules of the KRC® platform that supports the process of preparing the company's sustainability reporting (CSRD 12/2022) ensuring its governance, data reliability and accuracy, as well as transparency and verifiability/traceability of the different phases.
In particular, the module allows:
- the analysis of the internal and external context, in order to have an organizational and business map useful for identifying the material sustainability issues for the company;
- the analysis of double materiality on sustainability issues for the purposes of materiality assessment, through:
- the assessment of the sustainability risks (ESG) to which the company is exposed;
- the activation of an engagement process with stakeholders (survey) to assess the expected impacts of the company business with respect to the identified sustainability issues.
Results consolidation algorithms (configurable and parameterizable) guide the company in assigning priorities for material sustainability issues;
- the association of material sustainability topics with the information to be reported and related indicators. KRC® facilitates the collection of data according to the current reference standards and the subsequent reconciliation with the common European standards (currently being prepared by EFRAG);
- the production of sustainability reporting, understood as the set of context data, the assessment of dual materiality and the set of information for each identified material sustainability topic, based on the reprocessing of the data collected for the purposes of reporting on the various indicators of reference.
The Sustainability Strategy and Reporting Module can be interconnected with other modules of the KRC® platform, in order to benefit from assessments already carried out, such as the ERM-ESG module for the analysis of sustainability risks, the Strategic Objectives module for the of material sustainability topics and the Stakeholders Portal module for the stage of collecting materiality assessments from stakeholders on various sustainability topics.
Context definition of the organization
It allows the configuration of the internal and external context of the organization, including the legal-regulatory context on sustainability.
With reference to the internal context it is possible to configure:
- corporate governance elements (i.e. Legal Entity, Processes, Roles, procedural system, stakeholders)
- business elements (i.e. mission, values, business sector, business model, types of products offered and markets served)
- organizational elements (i.e. organization chart, number of employees, type of contract by macro-class).
With reference to the external context, it is possible to configure corporate partners and companies belonging to the value chain, as well as any other company directly connected to business operations. Specifically, for each of them it is possible to define, among other information, the type of relationship (e.g. suppliers, joint ventures), the type of activities performed (e.g. manufacturing, packaging), the geographical areas in which the activities are carried out.
With reference to the legislative-regulatory context on sustainability, it is possible to manage the legislation applicable to the reference sector and/or company, the sustainable development objectives of the United Nations 2030 Agenda, the reference libraries on the subject of indicators to be use for reporting (e.g. GRI, ESRS), and any other element useful for identifying economic, social or environmental issues relevant for the purpose of identifying and managing the sustainability issues to be submitted to the materiality analysis.
Definition of material sustainability issues
From the analysis of the internal, external and normative-regulatory context on sustainability, it is possible to derive an organizational and business map useful for identifying potentially material sustainability issues for the company.
The sustainability topics being analyzed can also be identified starting from the mapping of corporate risks which can be carried out through the KRC® platform (ERM-ESG module) or imported into the platform itself.
The platform allows the definition (or import) of a materiality questionnaire, facilitating, through special checklists that also take into account ESG risks, the assessment of the actual and potential impacts (positive and negative) of sustainability issues on the economy, environment and on people.
The materiality questionnaire, in addition to being completed by the company, will be submitted to the selected stakeholders, who will be able to access, again through the KRC® platform, a special Stakeholders Portal to complete it.
The double materiality assessment can be carried out through:
- the data collected through the aforementioned questionnaires, summarized thanks to the use of system-configurable criteria and algorithms (which must facilitate the assignment of priorities to the topics);
- the estimation of the economic-financial impact of the risks on company performance and on stakeholders (for this purpose the ERM-ESG module can be integrated)
The platform facilitates, through its functions, the dialogue between the CRO and the Sustainability Manager in the preparatory stages for the definition of the materiality matrix, guiding the process.
Based on the results of the materiality assessment, the company can associate different levels of priority, in line with the defined sustainability objectives and strategies.
The material topics identified and prioritized can then be subjected to internal review and relative approval, also through specific workflows that the platform can make available.
The platform will suggest, on the basis of the prioritized material topics, the most appropriate disclosures in terms of reporting.
Sustainability data management
The platform allows you to manage, for each material sustainability topic selected as a material, all the aspects required by the reference standards.
Once the material topics have been identified and the priorities established, it is possible to associate the SDGs objectives and the respective targets. The applicable GRIs (comply or explain) and related disclosures are selected below. The platform provides an overall matrix selected on the material topics associated with the related GRI and Disclosures and/or other standards, with the goals and related targets and with the priority.
The platform allows you to feed the indicators envisaged by the specific standard information on sustainability issues through import functions from Excel files, from special data tables made available by applications present in the company or through manual entry.
In KRC® it is already possible to have transcoding tables of the ESRS vs GRI indicators, in order to facilitate the regulatory transition which will take effect starting from the reporting relating to the 2024 financial year.
The dashboard of indicators, for each disclosure associated with the material topic, allows the Sustainability Manager to define, where necessary, the actions to be taken to prevent or mitigate potential negative impacts and any other method of applying the precautionary principle.
For this purpose, the platform provides tools and functions to define and manage specific action plans, allowing to assign specific responsibilities for the implementation of these plans within predefined deadlines and to monitor the progress of the planned plans over time.
Upon completion of each plan, the system sends notifications aimed at promoting a reassessment of the impacts associated with the material topic.
The platform allows the production of management and operational reports compliant with the reference legislation, structured on dynamic data structured as follows:
- Descriptive parts of the organizational context, of the specific sector in which the company operates and regulatory updates.
- Dynamic parts that are automatically composed with the data and information managed in the module. Specifically, through the platform it is possible to have templates/documents illustrating the double materiality analysis, the trend of the indicators connected to the materiality issues and any other information required by the standard disclosures.
Corporate Sustainability Reporting Standard Directive
Sustainability Reporting Directive 12/2022
After approval by the European Council, the CSRD was published in the Official Journal of the European Union on 16 December 2022. The directive, which amends the existing legislation on sustainability reporting, will be applied starting from 1 January 2024.
Among the changes, the CSRD provides that the sustainability reporting obligations are applied to all large companies, as well as to listed SME starting from 2026, excluding only micro-enterprises.
The objective of transparency also requires companies to be in a position to provide reliable information which must be subject to review and independent certification processes. To this end, methods are envisaged to guarantee digital access to information on sustainability.
REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18 June 2020 establishing a framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088
The European taxonomy was adopted by the European Union with Regulation 2020/852 and is a classification system of economic activities that are sustainable from an environmental point of view. This classification determines which activities are considered sustainable and which are not. The Regulation defines 6 environmental objectives on which companies must have an impact. The objectives are:
- Climate change mitigation
- Adaptation to climate change
- Sustainable use and protection of water and marine resources
- Protection and restoration of biodiversity and ecosystems
- Pollution prevention and control
- Transition to a circular economy
The European Taxonomy, closely linked to the SFDR (Sustainable Finance Disclosure Regulation Regulation EU 2019/2088 of the European Parliament and of the Council of 27 November 2019 relating to disclosures on sustainability in the financial services sector), will allow investors to know fund the companies they want to invest in and their level of sustainability and social responsibility. It will also serve as a guide for companies that will be confronted with the SDG (Sustainable Development Goals) included in the 2030 agenda for the achievement of sustainable development.
The new ESRS European Sustainability Reporting Standard approved by EFRAG on 16 November 2022 is destined to become the sustainability reporting standard, in line with the new Corporate Sustainability Reporting Directive (CSRD). In Draft By the end of March 2 draft
The approach of the GRI standard, the reference methodology in Europe, new version in force since 01/01/2023, focuses on the economic, environmental and social impact of a company, and therefore on its contributions (positive or negative) to the Sustainable Development.
The SASB (Sustainability Accounting Standards Board) approach identifies five dimensions (environment, social capital, human capital, business model & innovation, leadership & governance) and breaks them down by relevance into 77 sub-sectors based on 26 variables. Therefore, in addition to the GRI criteria, the Sasb materiality map helps to enter many micro-sectors of activity.