Good information is necessary for reliable decision making.
Disclosures by financial and non-financials are essential to provide users of the information with an understanding of an organisation’s sustainability-related risks, opportunities and linkage to the business model and financials. Users of the information such as investors and customers benefit from being able to assess the risk management attributes and sustainability of an organisation, how it is implementing measures to achieve strategic goals, and therefore its long-term prospects. Good disclosures are furthermore necessary to counter greenwashing.
Organisations are required to meet a growing demand from stakeholders, shareholders, and regulators such as European Supervisory Authorities, US Securities & Exchange Commission and equivalent prudential authorities across jurisdictions from Asia-Pacific, Americas and Africa. Mandatory disclosures from certain organisations (e.g. listed companies, large companies) are accompanied by increasing market pressure for disclosure by all kinds of organisations from small to medium sized companies, to public bodies, NGO’s, and charities.
The collection of relevant, consistent and comparable data that is sufficiently granular, and the analysis of the collected data, remains a key challenge for many organisations. Drivers include customer expectations and the evolving frameworks on disclosures such as the European Union’s Sustainable Finance Strategy, the EU’s Sustainable Finance Disclosure Regulation (SFDR), Corporate Sustainability Disclosure Directive (CSRD), and Corporate Due-Diligence Directive (CDDD), as well as reporting requirements of the US Securities and Exchange Commission (SEC) and the International Sustainability Standards Board (ISSB).
As well as helping our Clients to stay updated on international policy, reporting standards and guidelines, ELS Europe helps organisations, including preparers and users, to generate, gather and process high quality sustainability-related information. We provide technical, legal and financial expertise helping to generate information that is unbiased, relevant, consistent, and comparable across material environmental, social, and governance objectives across the life-cycle of our Clients products and services. Moreover our solutions link outcomes and outputs to financial KPI’s, ensuring consistency in reporting and reducing administrative burden associated with the data management cycle.
Our solutions support the development of fit-for-purpose reporting systems, whether for high- or low-risk profile organisations, we help to navigate the digital technologies needed throughout the data life-cycle. We provide expertise for development or enhancement of internal data collection systems, data curation and validation methods, quality control and monitoring systems, internal method statements, knowledge exchange and stakeholder consultation, as well as product and service information. These elements are necessary for the implementation and monitoring of the transition to sustainable products and services along relevant timelines to meet key performance indicators, to comply with disclosure obligations, and reinforce trust through transparency and dialogue with key stakeholders.
ELS Europe provides leadership, strategic guidance and advice on a range of cross-sectoral projects. Examples of our work:
Development of EU Taxonomy Data Product
ELS Europe delivers solutions in support of a large multinational media company and data provider towards the development of EU Taxonomy Sustainable Finance Solutions, and other Environmental, Social and Governance (ESG) suite of data solutions. ELS Europe provides EU Taxonomy and sustainability-related research, technical expertise and data assessment necessary to evaluate estimated alignment of a Company’s products or services with the EU Taxonomy across economic sectors including Transport & Infrastructure, Energy, Manufacturing, Information & Communications Tech (ICT), Forestry, Water and Waste, Construction and Real Estate. Our expertise supports product development on the science-based technical screening criteria i.e. thresholds for demonstrating a substantial contribution to an environmental objective, no significant harm to all remaining objectives and achievement of minimum social safeguards of the EU Taxonomy. The cornerstone of the ELS Europe’s solution is to connect EU Taxonomy sustainability-related activities to company financial key performance targets of revenue, capital expenditure (CAPEX) and operational expenditure (OPEX).
European Financial Reporting and Advisory Group EFRAG
The CSRD requires all large companies and all companies with securities listed on EU regulated markets (except micro-companies), including insurers and pension funds, to regularly disclose information on societal, governance and environmental risks, opportunities and impacts. This includes, for example, the disclosure of transition plans for climate change mitigation, policies on climate change mitigation and adaptation, or potential financial effects from material physical and transition risk. The CSRD requires that the Commission takes into consideration technical advice from EFRAG when adopting delegated acts.
In line with the CSRD, ELS Europe Co-chaired the EFRAG project on reporting of sustainability-related risks and opportunities and linkage to the business model. The Green Deal, the Sustainable Finance Strategy and its regulations including the CSRD, the EU Taxonomy, and the SFDR framed this comprehensive study entitled: ‘Towards Sustainable Business: Good Practices in Business Model, Risks and Opportunities Reporting in the EU’. This collaborative publication has become a ‘go to’ reference for sustainability-related reporting by financial and non-financial international listed companies, and small to medium-sized enterprises (SME’s). The main report and supplementary document shares 37 examples of good or leading practices extracted from 27 companies with rationale as to why these are good practices as well as suggestions for improvement. The main report and its supplementary case studies are a key tool for those who want to make measurable and substantial efforts to improve the sustainability of their operations, products and services across environmental and social aspects, including intangibles.
CDP
ELS Europe was appointed by CDP (formerly Climate Disclosure Project) a non-governmental organization with institutional investor signatories with a combined value of US$96 trillion in assets. ELS Europe provided expertise to evaluate the level of alignment between CDP Disclosure questionnaires against the six environmental objectives of the EU Taxonomy: climate change mitigation, climate change adaptation, pollution prevention and control, circular economy, water resources and protection of ecosystems.
National Transport Company
ELS Europe’s Client was a national public transport provider, delivering attractive sustainable public transport.
ELS Europe has provided expertise across the group’s operating companies in respect of its overarching goals to meet national climate targets, agreed at EU level and furthermore to support the achievement of the U.N. Sustainable Development Goals. We reviewed EU Taxonomy eligible and aligned activities, evaluated sustainability strategy and disclosures, highlighting as relevant risks, opportunities, costs and benefits. ELS Europe shared findings through awareness and knowledge exchange sessions held at Board, Executive Suite, and management levels, refer to <Knowledge Exchange and Stakeholder Consultation<
