ESG: environmental, social
and corporate governance
What is ESG?
Sustainability, corporate social responsibility, green investments, CSR, ESG – this topic has had many names in modern history. But recently organisations, institutions and the media have increasingly used the acronym ESG, which clearly defines the essence of the topic.
Sustainability means business impact management in the following areas:
- E – environment
- S – social
- G – governance
So let’s talk about ESG. Most will rush to capitalise on the value of ESG and sustainability in general –
to access funding on better terms, or to use this opportunity to build their reputations. ESG offers a significant opportunity to create a more resilient business.
Regulation
The European Commission has already agreed that all companies operating in the EU will have to report their ESG non-financial indicators from 2025.
This obligation will come into force in the near future, but reporting will also have to be done retrospectively, so the ESG report for 2026 should provide comparative data for 2025 and 2024.
Large quoted companies, large banks and large insurers (over 20 companies in Lithuania).
Companies with 250+ employees and/or €50M turnover and/or €25M capital.
Small and medium companies, other SMEs on a voluntary basis (to be tightened as the deadline approaches).
However, regulation is not the only impetus for the development of ESG – large institutional banks are also calling for disclosure of organisations’ non-financial performance. They are already offering green products on more favourable terms.
Value for reputation
Investing in ESG is already valuable, with 63% of companies stating that it adds value to the company, compared to only 8% who denied this, out of the 2,000 organisations that took part in the McKinsey & Company survey.
Advanced organisations list the advantages:
Our ESG services
Analysis
Businesses in different sectors have very different ESG impacts. The analysis will help identify areas to focus on. It’s like a visit to the general practitioner – the first and most important step in taking care of your health.
Our analysis is based on an authentic methodology that we have developed on the basis of GRI, ESRS, GHG and other standards used worldwide and in Europe.
This is the basis for making the right investments in the future.
Strategy
ESG or sustainability topics do not imply prohibitions on action, but rather new opportunities. After the analysis and calculations, it is important to agree on how you will operate in the future. Our role is to advise, guide and identify opportunities. But it will be up to your business leaders to agree.
Materiality assessment
Want to start your sustainability journey but don’t know where to start? A materiality assessment will help you identify the areas of environmental, social, and corporate governance where your operations have an impact.
With this assessment, you will gain your own sustainability map, which will help you to navigate, focus on the areas of highest impact, and avoid popular topics dictated by the business environment.
Also, the concept of double materiality, meaning both the environmental impacts on a company and the company’s impact on the environmental, is included in the new European ESRS standard and will have to become part of every sustainability report.
GHG or CO2 emissions
We’ll help you calculate your business’s CO2 or GHG (greenhouse gas) emissions. Both direct and indirect emissions, as well as emissions from the entire supply chain.
Scope 1 – your direct business emissions (fuel, fuel used in production)
Scope 2 – Indirect energy emissions (electricity, central heating)
Scope 3 – Emissions from the entire value chain (from resource extraction to waste management
Reputation
We will translate your ESG steps into a language that your customers and stakeholders can understand, and that will be communicated through different forms and channels. Fabula is a leading Lithuanian communication agency, and the ESG topic is well suited to growing the reputation of a business organisation.
Sustainability report
A sustainability report is not just a report. This is the story of your business’s journey towards sustainability. It is a tool to demonstrate your commitment to the environment, society and good governance.
The sustainability reports we produce are not just dry facts and figures. These are engaging stories illustrated with pictures, graphs and infographics. The reports are easy to read and interesting to look at.
But we don’t forget precision. Reporting is carried out in accordance with rigorous GRI (Global Reporting Initiative) and ESRS (European Sustainability Reporting Standards) standards.
ESG – the importance of corporate sustainability and social responsibility for business
Environmental, social, and corporate governance (ESG) is an increasingly important concept that enables companies to reduce their risks, improve their performance and create more value for all stakeholders – shareholders, employees, the people around them, and the natural environment that surrounds us.
ESG factors can affect a company’s long-term success
ESG factors can affect a company’s long-term success in various ways. For example, environmental protection can help companies cut costs – lowering CO2 emissions often means lower energy costs. Companies that are more advanced in sustainability often enjoy a better reputation and greater resilience to crises. A background in social responsibility helps attract talent and retain existing teams. Achievements in governance lead to more effective risk management, goal achievement and simply more value for shareholders.
ESG is becoming an important investment criterion
Performance in ESG is also becoming an increasingly important criterion for investors. There is a growing appreciation for companies that operate in a sustainable and responsible way. Investing in ESG progress allows investors themselves to reduce risk, achieve their goals and contribute to tackling global warming and other social and environmental challenges that our world is facing.
ESG regulation in Lithuania
ESG regulation in Lithuania is also developing rapidly. In 2023, the European Union adopted the Sustainability Reporting Directive (CSRD), which obliges large companies to report on sustainability. The Directive will enter into force in 2026 and will be extended to smaller companies thereafter.
Benefits of measuring and managing ESG factors
Assessing and managing ESG factors can bring many benefits to a company, including:
- Reduced risk
- Improved efficiency
- Increased value for shareholders
- Responsible and sustainable practices
- A better reputation
ESG factors are becoming increasingly important for business, investors and society. Sustainable and responsible business can create long-term value for all stakeholders and contribute to the global sustainability goals.