ESG Reporting in Denmark
- 4 minute read
- ESG
ESG Highlights 👉
Despite not being directly required to report on ESG, small companies will likely be required to report due to a trickle-down effect in supply chains.
Unlike former voluntary CSR reports or sustainability reports, ESG reports must be endorsed by your accountant.
ESG reporting is likely to play a larger role in valuation in the future – financial as well as brand-wise.
Determining materiality is essential, as the significance of issues varies between industries depending on risks and opportunities in the sector.
What is the EU Corporate Sustainability Reporting Directive?
The European Union has decided that large companies must regularly report on their non-financial activities’ impact and social and environmental risks. This will help investors, civil society organizations, consumers and other stakeholders evaluate the sustainability performance of specific companies. The CSRD is part of the European Green Deal.
It is noteworthy that ESG reports, sustainability reports, and CSR reports are often used synonymously, although they are not the same.
When is ESG reporting required for companies in Denmark?
In Denmark, required ESG reporting will begin from 1 January 2024. And it is important to note that the subject companies might have to request smaller suppliers to provide insights into their activities for transparency.
So, even if you are not required to report now, you might be met with demands from your value chain.
Failure to meet requirements is punishable by fines or injunctions. And in the worst cases, it can end in compulsory dissolution of the company.
Deadlines for implementation of ESG reporting:
1 January 2024: Publicly listed companies (Class D) with +500 employees.
1 January 2025: Publicly listed (class D) and not-listed (Class C) companies with +250 employees.
1 January 2026: Small publicly listed companies with less than 250 employees.
It is also important to note that special requirements apply for groups located outside the EU but do business within the EU.
Moreover, businesses are required to report on ESG in their value chain, including suppliers, business connections, and services.
When is a specific ESG issue considered material?
Materiality is the principle stating that you must define which social and environmental issues matter most to your business and stakeholders. And no, it does not mean that you can cherry-pick the issues that are closest to your heart or might seem “easier”.
A specific ESG issue is considered material only if it has a significant financial impact on the company. In that sense, material ESG issues are the governance, sustainability, or societal factors that can affect the financial condition or performance of operation of the businesses within your sector.
3 good reasons to start reporting on ESGs today.
Futureproofing your business.
The demands will come at some point. So, why not see this as a “practice round”, so you know exactly what to do once you are required to report – directly or indirectly?
At mighty admins, we recommend that you get started on your ESG reporting right away, even if you are not required to. In that way, you are prepared if clients come knocking.
A starting point for taking action.
Greenwashing and cherry-picking of SDGs have been a hot topic for a while now. And even for well-meaning businesses, identifying how and where to improve is difficult.
Correct ESG reporting is not just about opting for a company canteen with organic food. It is about documenting on the issues that are tightly connected to your business activities, and using that as a foundation for introducing more sustainable and responsible initiatives.
Stakeholder perception and valuation.
Proper ESG reporting signifies that you are a responsible and transparent business that focuses on future proofing. And this is pretty attractive for most stakeholders! So, why not think of it as a long-term investment with very holistic benefits?
- Align with customer values for improved loyalty.
- Become a great partner for larger companies that have to request ESG data from their value chain.
- Send a signal to potential investors that you are future-proofed and have your documentation in place for a potential due diligence process.
- A more positive public perception of you, as you show transparency and responsibility.
At mighty admins, we can assist you with:
GAP Analysis and double materiality assessment by ESRS requirements.
Definition, calculation, and reporting of scope 1-3 CO2 emission.
Endorsement of ESG reports.
Guidance on SMV:Grøn and SMV:Grønne Kompetencer applications for financing your ESG journey.
… And much more!
Check how we can help you with ESG reporting and strategy here.
