ESG Advisory – Key Elements of Sustainable Development Strategies for Businesses

In an article published on (https://fleetmobility.pl/), we discussed the decarbonization of transport—a comprehensive effort to reduce the carbon footprint of vehicles, from individual cars to entire fleets. This initiative represents just one crucial element of a company’s broader strategy to address challenges such as climate change, social inequality, and the management of natural resources. Within a sustainability strategy, implementing actions aligned with climate policy has become a top priority.

Operating within the European Union means businesses must evaluate not only their financial profits but also how those profits are generated. This includes considering ESG (Environmental, Social, Governance) factors and their impact on company value. ESG-focused initiatives not only help businesses tackle sustainability challenges but also improve operational efficiency and reputation. As ESG advisory becomes a central element of corporate strategies, it addresses consumer and investor expectations while ensuring compliance with regulatory requirements.

Regulatory Context

The EU has established an ambitious climate policy aiming for climate neutrality by 2050. Legally binding commitments require member states to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. Compliance is critical, with decarbonization plans playing a key role in avoiding penalties.

In recent years, the EU has introduced regulations to enhance transparency and accountability in sustainability, including:

• CSRD (Corporate Sustainability Reporting Directive): Expands non-financial reporting obligations to a growing number of companies, covering both financial and sustainability impacts.
• ESRS (European Sustainability Reporting Standards): Provides detailed guidelines for CSRD-compliant reporting, posing challenges, especially for smaller firms.
• EU Taxonomy: Defines environmentally sustainable investments, influencing access to financing.

EU Funding for Sustainability

The EU’s 2021–2027 budget, alongside the NextGenerationEU recovery instrument, totals €2.018 trillion. This historic funding package addresses the economic and social impacts of COVID-19 while supporting a transition to a greener, more sustainable Europe. ESG advisory can help businesses access these funds by aligning actions with sustainability requirements.

Funding priorities include:

• Research and innovation
• Fair climate and digital transitions
• Preparation for future crises

Substantial financial support from the EU enhances corporate competitiveness on European markets by driving social and environmental responsibility.

External Pressure and Stakeholder Expectations

Businesses face increasing pressure from stakeholders demanding responsible actions toward society and the environment. Key groups include:

• Investors: ESG performance increasingly influences investment decisions, with insufficient transparency or actions risking withdrawal of capital.
• Customers: Particularly younger generations prioritize ethical business practices, rewarding sustainable companies with loyalty.
• Business Partners: Expect collaboration with socially responsible companies adhering to ethical and sustainable standards.

ESG advisory has become indispensable for companies seeking to navigate sustainability challenges and regulatory demands, such as CSRD and ESRS. Organizations that invest in climate policy, social responsibility, and transparent governance not only reduce regulatory risks but also gain competitive advantages. Amid growing pressure from investors, customers, business partners, and employees, actions like transport decarbonization are pivotal to long-term success.