Sustainability Blog #22

Let’s switch things up this month with a quick story…

Last month, CMS Croatia hosted its second Compliance Day, with a spotlight on the latest ESG developments. Beyond the presentations for clients and guests, the event culminated in an engaging fireside chat with representatives from the Orbico Group’s ESG team. Our amazing speakers from Orbico, one of Europe's largest distribution companies with approximately 9,000 employees, offered invaluable insights into integrating ESG into business practices.

Among the many enlightening stories shared, three key takeaways stood out. First, implementing ESG factors is a gradual, resource-intensive journey—expect it to require commitment and a range of resources. Second, buy-in from the management board is essential. And lastly, start as early as possible, even if you're not yet required to by regulations.

In these blogs, we regularly update you on EU sustainability documents, summarizing obligations, scopes, timelines, and more. But in the flood of acronyms, rules, and deadlines, we sometimes overlook the essential foundation of these processes. ESG isn't about ticking boxes for compliance. It’s about embedding sustainability into your business vision and making it a strategic priority.

Define how ESG aligns with your goals and values. Make it integral to your long-term strategy, not just a checklist item. Remember, the heart of the Green Deal and ESG is about integrating sustainable practices into everyday operations—transforming your business from within. 

Here is also a short overview of important regulatory ESG updates from September and October.

On 16 October, European Council agreed to extend the application time for the European Deforestation Regulation (EUDR). The deforestation regulation has been in effect since June 29, 2023, with its requirements initially set to apply starting December 30, 2024. However, the Council has agreed to the Commission's proposal to postpone this application date by one year. If the European Parliament also approves this delay, the regulation’s obligations will take effect on 30 December 2025, for large operators and traders and 30 June 2026 for micro and small enterprises.

In September, the European Commission announced that it has issued letters to 17 EU member states, initiating infringement procedures against them for failing to confirm full transposition of the new Corporate Sustainability Reporting Directive (CSRD) into their national laws. The states receiving the letters include Belgium, Czechia, Germany, Estonia, Greece, Spain, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia and Finland.

On 21 October 2024, the United Nations Environment Programme Finance Initiative released new guidance to support the finance industry with its nature-related transition. The guide provides practical steps for banks to manage biodiversity-related risks in the agricultural, forestry, and mining sectors. You can find the guidance here.