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Low quality ESG reporting is a major business risk for companies
On the one hand, the climate crisis, greater ecological awareness and the growing importance of an ethical organizational culture. On the other, the development of sustainable finance and a dynamically changing regulatory environment, with the CSRD directive and sustainability reporting standards (ESRS) at the forefront. There is no doubt that social and political pressure is enormous, and the world today expects radical transformation from business.
It seems that sustainable development should be one of the most important priorities of every company. However, only 28% of organizations surveyed by ARC Rynek i Opinia on behalf of LeasingTeam Group agree with this thesis. The group decided to look at the landscape of activities conducted in the ESG area by companies employing more than 50 people in Poland.
– More and more companies are realizing that ESG-compliant activities are no longer just an addition, but an integral part of the business strategy. It is no different in LeasingTeam Group, which is why, observing changes in this area, together with one of our brands TalentPoint, we initiated a study aimed at understanding how companies in Poland approach the implementation of activities in the area of sustainable development. We directed the study to a kind of a hotbed of changes in organizations, i.e. HR departments, company owners and people directly responsible for the area of ESG and CSR – says Iga Pazio, Marketing & PR Director LeasingTeam Group.
Much depends on the size of the company and the scale of its operations.
The report shows that although nearly half of companies (49%) admit that sustainable development is important to them, they do not consider it a priority area, and one in five treats environmental and social issues as a sideline. Interestingly, there is a clear correlation between the size of the company and the level of involvement in the ESG area. The greatest conviction about the need to prioritize these issues is in companies employing more than 500 people (37%), and the least in organizations employing 51 to 100 people (23%).
– We believe that achieving business goals can be effectively and successfully combined with care for people and the environment, and that ethical organizational culture and promoting the right attitudes should be the foundation for running any business. This also applies to the services and solutions that we introduce to the market. ESG is one of the key strategic directions for all our companies and we want to support our clients in these activities as well – says Andżelika Majewska, Vice President of LeasingTeam Group. – We are convinced that companies that join the green transformation process early enough will have a huge opportunity to build a competitive advantage in relations with clients and investors – she adds.
The fact that ESG is not a priority for most companies does not mean that no action is taken in this area. Every second company surveyed does so to a greater or lesser extent, and every fourth company has a separate strategy. This should come as no surprise, as it is mainly companies with an international reach that have such a document. What may be surprising is the fact that as many as 19% of entrepreneurs declare directly that they do not plan to start such actions because they do not feel the need.
Budget is a barrier, but a paradigm shift is visible
The biggest challenge for companies entering the path of sustainable development is budget constraints, indicated by as many as 58% of respondents. Slightly fewer, 53%, pointed to the low level of employee engagement, and every second company admits that it does not have the awareness and appropriate knowledge to implement ESG principles. Other obstacles include lack of time (48% of indications) and a clear policy or action plan (45%). The respondents blame this state of affairs on the management staff, who are not sufficiently involved in activities related to sustainable development in their companies (40% of indications).
– It is clear that there are no written strategies or indicators yet, that this is the initial period of broadening the business spectrum. For years – and in Poland much longer than in other European countries – it was emphasized that business should focus only on maximizing profits, and all these "CSRs" are just unnecessary costs. When CSR finally changed to ESG, it turned out that business is people, that it is natural to maximize positive impact and reduce negative impact in all areas important from the point of view of the quality of our lives. Only 1% of respondents believe that companies' activities supporting the idea of sustainable development have no noticeable impact on the company and employees. This is clear evidence of a paradigm shift in business taking place here and now – comments Bolesław Rok, professor of management at the Leon Koźmiński Academy.
The fact that 87% of survey participants are aware that sustainable development activities reduce the harmful impact of business on the environment is encouraging. On average, three out of four companies also believe that ESG improves relationships with customers, suppliers and partners (77%), increases employee engagement and efficiency (76%) and attracts talent that is better suited to the organizational culture (73%).
The study was conducted using the CATI and CAWI methods on a representative group of 515 companies employing at least 50 employees. It was carried out on June 24 – July 19, 2024 by the research agency ARC Rynek i Opinia on behalf of LeasingTeam Group. The substantive partner of the report is Great Digital, and the institutional patron is the Responsible Business Forum.