Sustainability reporting has become a mainstream challenge for facilities management over the past few years, in demand from clients and colleagues alike. It will become even more fundamental as we move closer to net-zero deadlines and new Environmental, Social and Governance (ESG) reporting regulations following on from COP26, where it was high on the agenda.
There are clear indications that the real estate sector will remain a prime target for global policy action. Many existing properties are rated as not “future-proof” and will successively fall behind when competing for clients and investors in the medium to longer-term future.
There appears to be a mistrust of data – companies ‘marking their own homework’ where they could manipulate or abuse the data they provide. The global view is that there is a need for change. As such, the regulatory landscape has rapidly moved on from a simple disclosure requirement to one more of behaviour and performance, leaving companies with disclosure gaps at a distinct disadvantage.
Corporate Sustainability Due Diligence (CSSD) for example, which was unveiled by the European Commission in February 2023, states that Companies are obligated to perform due diligence to promote sustainable development and facilitate the transition of economies towards sustainability. This will involve identifying, preventing, and mitigating any adverse impacts on human rights and the environment.
European regulation Corporate Sustainability Reporting Directive (CSRD) require greater levels of disclosure on the impact of a company’s activities on people and the planet, including any sustainability risks they are then exposed to. Areas for reporting will include environmental protection; social responsibility and the treatment of employees; respect for human rights; anti-corruption and bribery; as well as the diversity on the company board. On top of this, reporting will have to be certified by an accredited and independent auditor.
We are also we are seeing a consolidation in the global reporting landscape with the release of the International Sustainability Standards Board (ISSB) and EU Sustainability Reporting Standards (ESRS), anticipated by the end of June 2023.
The ESRS will set mandatory disclosure requirements under the EU CSRD raising the importance of the Global Reporting Initiative processes and content when disclosing and will apply to c.50,000 companies’ annual reports from 2024.
The ISSB will be the comprehensive global baseline for high-quality sustainability disclosure standards moving from disclosure to action and behaviour changes. It will provide sector-specific criteria and will demand robust data and disclosure to verified standards. Creating a fair and consistent reporting framework. We keep a close eye on developments.
Watch our very own Heather Turner, Sustainability Analyst, explain the changes in more detail at our recent SFMI webinar.
At our 2023 SFMI Programme, Regulatory and Criteria webinar, we asked attendees how confident they were that their current process fits with the new reporting requirements. Only 27% were confident, leaving 73% either don’t yet know or unconfident and with a lot of work still to do.
The SFMI’s programme of assessments can help meet the reporting requirements. To find out how we can help your organisation