Environmental, Social & Governance

ESG (Environmental, Social & Governance) is simply put sustainable entrepreneurship. Policies within the context of ESG must take into account all stakeholders involved in the company (like employees, shareholders, customers and suppliers, the society and climate impact). These policies must be included in the management report and will be audited (whether or not in due course).

Importance ESG

Companies are increasingly expected to do their bit to limit the negative impact that the conduct of business has on the climate, society and stakeholders involved in the company. With a solid ESG policy, companies show that not only money, but also the environment and society matter. There is a broad consensus that ESG objectives create added value, both from the perspective of risk mitigation and value creation. This is of interest to investors: the trend is that companies achieve strong returns if they create value for all stakeholders in the company. The better the ESG policy, the higher the valuation. In addition, clients are becoming more critical and want to see how the company they do business with behaves from a sustainability perspective, also because they in turn have to report to their clients on their own sustainability. Moreover, having a solid ESG policy makes the company attractive as an employer. For the new generation of employees, sustainability, inclusiveness and diversity are chosen as key conditions for choosing an employer and staying there. Research shows that almost ninety per cent of employed people prefer to choose an organisation that has sustainability high on its agenda.

Companies are also increasingly being asked to do more on sustainability from the legislator. For large companies, there are two European legislative initiatives in preparation, which in particular set requirements for reporting on non-financial information. These are the Corporate Sustainability Reporting Directive ('CSRD') and the Corporate Sustainability Due Diligence Directive ('CSDDD') Despite the fact that the European directives currently only pertain to large companies, it is also important for less large organisations to have their ESG policy in order. After all, large companies are less likely to do business with smaller companies that do not meet their sustainability standards because they cannot fulfill their own reporting duties. Moreover, in time, the CSRD and the CSDD are expected to apply to smaller companies as well.

We are happy to assist

With its ESG practice, Pellicaan Advocaten has the knowledge and experience to help entrepreneurs with ESG issues. Among other things, we can help with:

• advising and reporting on legal developments;
• drafting and formulating sustainability policies (e.g. based on SDG goals) and sustainable decision-making;
• impact assessment / ESG legal scan;
• audits (flex, working conditions, WAS, safety, governance, etc.);
• setting up right employee conditions (green working conditions, WAS analysis);
• advising on sustainable governance and board report content;
• advising on dealing with data, IT and cybersecurity;
• ESG due diligence;
• check for compliance with ESG-related regulations (in addition to the CSRD and CSDD, consider the AVG, Transparent and Predictable Terms of Employment Act, Corporate Governance Code, etc.);
• seminars / in-house courses.

If you would like additional information or tailored advice, please contact us. We will be happy to make an appointment with you.