Upcoming European rules on environmental, social and governance (ESG) reporting are expected to impact 50,000 companies. A new report by Payhawk shows the urgent need for finance teams to take action and understand the role they have to play.
The ESG reporting: Priorities for Finance Teams ebook by Payhawk, the company that gives control over spending with a single solution, outlines the critical role that finance professionals have in integrating ESG considerations into financial decision-making, risk management reporting, stakeholder engagement and best practice within their companies.
The release of the ebook comes as the Corporate Sustainability Reporting Directive (CSRD) takes effect, which updates existing rules and requires companies operating in the European Economic Area to publish data in 2025 from the 2024 financial year. The rules will initially target firms with over 500 employees, and ultimately could affect 50,000 companies[1]. The aim of the rules is to bring standardisation and transparency on how companies report their ESG metrics, much in the same way they report their financial results for the benefit of investors and other stakeholders.
“Traditionally finance teams have been focused on maximising profits and accurate reporting of their financials. These upcoming regulations represent a step change for the industry, and finance professionals will have to adapt to reporting on every activity and investment associated with ESG. That’s why we have created this ebook – to guide them on that journey,” said Hristo Borisov, CEO and Co-Founder of Payhawk.
The ebook outlines the importance and relevance of the upcoming ESG rules and how finance teams will have increased responsibilities in terms of risk management, delivering cost savings, improving access to capital, ensuring regulatory compliance, and managing stakeholder expectations.
“The ebook highlights the need for finance teams to have a plan and a timescale to meet these new requirements,” said Borisov. “Finance teams will need to evolve their function to achieve a high level of ESG reporting. Without the right tools in place, this task will be almost impossible,” Borisov added.
Corporate spending is critical to ESG reporting and many companies are relying on outdated systems that can’t answer key questions about the sustainability of suppliers or certain purchasing decisions, for example. ESG is an evolving field and the best action finance professionals can take is to make measuring and reporting as easy as possible with intelligent technology.
