6.4 Support from External Specialists

Given the increasing regulatory requirements and the continued development of sustainability reporting, a structured and comprehensive approach is needed to ensure efficient compliance with existing and future disclosure obligations.

External specialists can support companies where the required expertise is not readily available internally. Over the longer term, this may reduce costs and effort while providing a robust basis for efficient and continuous stakeholder management.

Gap analysis

Companies should ensure that they remain up to date with changes in legislation. If a group decides to include sustainability reporting centrally in its annual report, the global report should reflect regional differences, including any differences in material topics. Where numerous local requirements must be considered, external support can be beneficial and more efficient in helping to ensure compliance.

Double materiality

Companies should assess which materiality requirements are relevant under the applicable reporting standards. While the ESRS require an assessment based on the concept of double materiality, the ISSB standards focus on sustainability-related risks and opportunities that are financially material. Irrespective of the regulatory framework, a structured materiality assessment supports the identification of relevant sustainability topics and provides the basis for focused reporting.

A double materiality assessment considers both the impacts of a company’s activities on the environment and society and the financial effects of sustainability matters on the company.
By contrast, a financial materiality assessment focuses exclusively on sustainability-related risks and opportunities that may affect the company’s financial position, business development or enterprise value. Irrespective of the approach selected, companies should establish a structured process for identifying and assessing relevant topics and appropriately involve both internal and external stakeholders.

Data

Data management and data quality are top priorities. Data completeness, data integrity and clear documentation of the underlying data are essential to ensure transparency and traceability. Sustainability reporting requires access to reliable, consistent and auditable data from different areas of the business, as well as a clear understanding of the underlying methodologies, assumptions and calculation logic. This applies to environmental metrics, such as greenhouse gas emissions, energy, water and waste data, as well as to social and governance-related information.

Reporting

Reporting requires sound planning and an appropriate governance framework. Robust non-financial reporting processes and controls are essential to ensure disclosures are materially correct. Companies should ensure that adequate resources are available for the reporting cycle and that processes and controls are capable of withstanding external assurance. This is particularly important when new legal requirements must be addressed within an already demanding reporting timetable.

Assurance

Under the CSRD, disclosed sustainability information is subject to external assurance. Requirements concerning the assurance and reliability of sustainability information are also gaining importance in other jurisdictions. Assurance by independent third parties enhances the credibility of reporting and strengthens the confidence of investors, customers, business partners and other stakeholders. Companies should therefore ensure that their reporting processes, controls and underlying data are documented in a transparent manner and designed to be auditable. Sustainability reporting should also be closely linked to corporate strategy and supported by clear governance structures, defined responsibilities and appropriate resources.