Evergreens Insights: Anne-Marie Loesch's advice on the challenges of sustainability

Can you explain what sustainability is and why it is crucial for businesses today?

Corporate sustainability means integrating environmental, social and governance (ESG) considerations into a given organisation's strategies, processes and overall management system. This includes reducing its environmental footprint, taking social issues into account (working conditions, diversity, impact on communities) and adopting responsible and transparent governance practices.

In recent years, companies have been operating in an environment marked by growing expectations and demands on the part of their customers, investors, employees and other stakeholders. They expect concrete commitments to limit the environmental impact of activities and generate a positive social impact. Under the European Green Deal, the EU has set itself ambitious climate targets for achieving net zero by 2050. To support this ecological transition, it has introduced a number of directives, including the Corporate Sustainability Reporting Directive (CSRD). The aim of this directive is to make companies more transparent about their ESG performance and to accelerate their transformation into more sustainable business models.

What are the primary objectives of this directive and how does it affect companies?

The Corporate Sustainability Reporting Directive (CSRD) is designed to improve companies' sustainability transparency and simplify access to the ESG data needed by banks, investors and other stakeholders. The aim is to make it easier to redirect capital towards sustainable investments, based on reliable, comparable and standardised information.

To achieve these objectives, the CSRD has introduced European Sustainability Reporting Standards (ESRS). These standards enable ESG data to be structured in a harmonised way across Europe, making it easier to draw comparisons between companies and sectors. The directive has also introduced an obligation to audit published information, in order to ensure its reliability and prevent “greenwashing”.

Initially, the CSRD was to concern more than 40.000 companies in Europe. However, with the draft Omnibus Directive, a significant reduction in the scope of direct application is envisaged and a postponement is planned. Despite this, many companies outside the direct scope of application will continue to be indirectly affected: they will receive requests for ESG information from their clients, business partners, banks or even major principals subject to the CSRD. For these out-of-scope companies, a voluntary set of standards called VSME (Voluntary Standards for non-listed SMEs) is currently being developed. The aim is to enable them to produce a single, streamlined ESG report, in response to the many requests currently being addressed to them, which are often time-consuming and costly in terms of resources.

In practical terms, how can companies implement sustainability initiatives that create value?

I think we need to see sustainability first and foremost as a lever for performance. For example, improving energy and waste management or investing in renewable energies can reduce dependence on fluctuating prices, while making significant savings – particularly since attractive public support programmes can accelerate the return on investment. This shows that it is possible to combine financial performance and climate protection.

From a social point of view, investing in training measures, well-being in the workplace or schemes to promote a better work-life balance can have a very positive effect on employee motivation and commitment, which in turn boosts the company's overall performance.

More broadly, sustainability can be seen as a lever for transformation, strengthening the competitiveness and resilience of organisations over the long term, while enabling them to adapt to a world undergoing profound change.

What steps do I need to take?

This depends on how much progress the company has already made with the issue. Some companies are already in contact with us, while others start by having initial discussions with their bank about sustainability. At the “House of Sustainability”, we are introducing information and awareness-raising sessions focused on sustainability issues, and we run training programmes with the “House of Training” on various topics, such as decarbonisation, the circular economy, sustainability reporting and sustainable innovation, as well as many others. Working alongside the Ministry of the Economy, we have funding programmes to support companies in their sustainability projects, to conduct analyses, for example, or invest in projects that improve their environmental footprint. In addition to what we provide ourselves, we can also direct companies to our partners in the ecosystem, so we are well placed to take on participants in the Spuerkeess 'Transition Enabler' programme and help them improve their ESG performance.

What advice would you give to companies on how to incorporate sustainability into their strategy?

First of all, I would advise companies to be curious and gain an understanding of their environmental, social and governance impacts. A practical first step could be to complete the “Transition Enabler” questionnaire, which is based on VSME standards and provides a standardised framework. This will enable the company to identify the most relevant levers for action, adapted both to the business sector and to each organisation's specific internal features. It's important to remember that a sustainable development approach is never a one-size-fits-all scheme to be applied across-the-board. Instead, it should be a tailor-made approach built around the specific challenges facing each company. I'd also say that once you have embarked on this path, you need to draw up a list of priorities. Don't get lost trying to do everything at once, but instead take action in areas where you can really make a difference. Finally, feel free to draw on existing tools, training, funding programmes, labels and guidance offered at national level to make concrete progress towards sustainability.