Of course, the first step before we start working on the content of the report is to conduct a thorough relevance study. Once this has been completed, however, we can follow two paths.<\/p>\n\n\n\n
In the case of a top-down approach, we start with the topics that are relevant to our company. This can even be at the most general level of 10 thematic standards. For each or some of them, we will be able to assign one or more relevant IROs \u2013 impacts, risks, and opportunities (which we identified during the study). We then review the policies in place within the organization. Some of them may relate to only one IRO, while others will probably relate to several. Individual policies are implemented through actions. In most cases, existing policies are also accompanied by targets set to measure their effectiveness. The metrics are used to determine the extent to which these targets have been achieved.<\/p>\n\n\n\n
If we follow the top-down approach, we should obtain a list of policies, actions, objectives, and metrics that are related to material IROs. All that remains is to prepare the information that we should disclose about them. This will consist of numerical data and descriptive information. By applying the appropriate standards, we will know, for example, in which cases the policy description will suffice to meet the MDR-P requirement, and in which cases something needs to be added to it (because a specific thematic standard requires it).<\/p>\n\n\n\n
In turn, the bottom-up approach assumes that after examining materiality, we refer to the set of all data points and determine which of them are related to significant impacts, risks, and opportunities. We then prepare the relevant data and information required for these data points and use them to shape the content of the report.<\/p>\n\n\n\n
The top-down approach best suits the purpose of preparing a report in accordance with ESRS standards. This is indicated in the third sentence of point 2 of ESRS 1: \u201eInformation disclosed in accordance with ESRS enable<\/strong> users of sustainability statements understanding<\/strong> significant impacts of the entity on people and the environment, and significant effects of sustainability issues on the entity's development, performance, and position.\u201d<\/em> The purpose of the report is to achieve understanding by its recipients. Not to report the maximum number of data points. Not to \u201etick off\u201d the fulfillment of specific requirements. Not to check whether the company is doing everything in every possible area. It is about understanding\u2014this is the purpose of the report, apart from point 2 of ESRS 1, also reflected in the qualitative characteristics of information (Chapter 2 and Appendix B to ESRS 1).<\/p>\n\n\n\n Starting with a list of several hundred detailed data points, it is very easy to overlook this goal; in fact, it is impossible to remember it. If we begin our preparations by, for example, preparing a description of the methodology according to which we calculated the data in each of the greenhouse gas emission categories in scope 3, there is no room to ask ourselves \u201ewhy?\u201d How is the description of the methodology for calculating emissions in each category supposed to facilitate understanding of how our company contributes to the climate crisis? The bottom-up approach also causes us to forget about entity-specific disclosures. And these are what supplement the scope of the report at a time when we do not yet have sector standards.<\/p>\n\n\n\n When discussing the differences between top-down and bottom-up approaches and the danger of reaching a dead end when using the latter, it is also worth paying attention to the issue of the relevance of information as such and the significance of point 31 of ESRS 1. But that is a topic to be developed in one of our future newsletters ?<\/p>","protected":false},"excerpt":{"rendered":" There are at least two ways to approach the creation of a sustainability report. One is the \u201etop-down\u201d approach, where we start with the main topics, move on to policies and actions, and end with goals and metrics. The second way is the \u201ebottom-up\u201d approach \u2013 we create the content of the report after we have determined which data points are relevant. What are the characteristics of these two approaches and what pitfalls await us if we choose one of them?<\/p>","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[19,40,20,34],"class_list":["post-1315","post","type-post","status-publish","format-standard","hentry","category-newsletter-piotra-biernackiego","tag-csrd-esrs","tag-istotnosc","tag-raportowanie-esg","tag-ryzyka-i-szanse"],"yoast_head":"\n