One of the biggest problems that revolve around the world of ESG (Environmental, Social and Governance, in its acronym in English) is the dispersion of regulations and lack of specificity of the criteria that make the development of sustainability plans and policies in companies extremely difficult.
Starting in 2025, the new CSRD (Corporate Sustainability Reporting Directive) regulations will begin to apply and was discussed at the table How ESG regulation faces 2025 within the framework of the IV ESG Forum held by elEconomista.es. The symposium included the participation of specialists in the field such as Pablo Bascones, partner responsible for Sustainability and Climate Change at PwC; Andrea González, director of Spainsif; Sonsoles Santamaría, general business director of Tressis and Verónica Sanz, expert in sustainability certification.
The credibility and confidence of investors in the sustainability criteria has been one of the points on which experts have emphasized with greater emphasis. As they have pointed out, in recent years There has been an increase in interest and demand for these products from customers, but the lack of clarity around regulation has also produced distrust.. In this sense, for demand to continue increasing, from Pwc, Pablo Bascones points out that it is essential to “clarify the rules.” For her part, Andrea González believes that the conversation has not yet reached that point: “We have not reached the part of the conversation in which the customer distrusts the products offered to him. First, we must be able to show that product. Game by game we have to show the product before the client makes demands according to their expectations.
From Tressis they expected that with the entry into force of the green MiFID we would experience a boom of demand in financial products but this has not happened, due to the complexity of the test, and that is even causing a certain rejection. However, according to Sonsoles Santamaría, “when the client says that he has no preferences, it is because he does not know how to choose, not because he does not want to. With the help of the advisor and with education in the nuances of these sustainable products, the introduction of this type of products in portfolios is increasing.; “We see a gradual increase in sustainability in portfolios thanks to the advisor’s conversation with the client.” For her part, Verónica Sanz argues that “to increase interest and meet investors’ expectations, these sustainability criteria must truly be met.” .
The CSRD will come into force during 2025 and progressively, with the aim of achieving greater standardization of all these criteria. Thus, the largest companies will be the ones that begin applying this new law in their reports next year and will be the first to face the obstacles that the standard may generate.
Bascones explains that with this new law there will be new techniques for verifying information on sustainability and a more complex process of homogeneity of all this data. “The first companies are prepared for the first report, but for the following years they have to solve the problems gaps that internal control systems and tools be identified and implemented,” he explains. For Sanz the biggest challenge of this new law will be the volume and he believes that in this first report “companies will save the furniture.”
Managers such as Spainsif and Tressis emphasize that The biggest challenge for CSRD will be seen at the lowest part of the value chainwhen medium and small companies also have to report and do not have sufficient means to face this process.
In this sense, Santamaría asks “to give it a spin, so as not to leave anyone out” and for there to be greater interoperability of the standards, also taking into account interest groups when legislating. For his part, González demands public sustainability labels for voluntary use for products.
#SMEs #face #biggest #challenges #ESG #laws
