Good grade: Volvo Car Gent CEO Stefan Fesser at the company’s academy and production site in Gent. Sweden had four companies with the top rating for reporting their operations’ ESG impacts, including Volvo Car and Saab. — AFP
OSLO: Scandinavian countries with a reputation for upholding green credentials are far from perfect when it comes to their sustainability disclosures.
That’s according to a report published last Friday which found that the largest Scandinavian companies are disclosing just over half of the key information they will have to report when new mandatory European Union (EU) environmental, social and governance (ESG) regulations take effect at the start of next year.
Tens of thousands of companies across Europe will need to start reporting their operations’ ESG impacts after the European Commission adopted a checklist that they must use to disclose the impact of climate change and other environmental and social factors on their businesses.
Last year, 300 publicly listed companies in Sweden, Denmark and Norway on average reported just 54% of 68 key disclosures that are included in the European Sustainability Reporting Standards, according to a report published by Position Green.
The private equity backed sustainability software and advisory firm said that indicates large gaps in the companies’ readiness for the upcoming regulation.
Given that the Scandinavian countries are “typically more advanced” in disclosing ESG data, “substantial gaps” could be found in wider Europe, it warned.
Position Green urged companies to “act quickly to assess and close their gaps to readiness,” highlighting the investment needs in “an ESG data management system that ensures the accuracy and traceability of sustainability information”.
The study, labelled ESG100, focused on the quality of ESG reporting rather than the actual ESG performance of 100 companies in each Scandinavian country.
It found 14 companies with the top A+ score in Norway, including Yara International ASA, Europe’s largest fertiliser maker, and the country’s second-biggest oil and gas producer Aker BP.
Sweden had four companies with the top rating, including Volvo Car AB and Saab AB. Overall, Danish companies had the largest gap in readiness, the report found, with 14 companies with the lowest possible score, compared to Sweden with just one.
Companies not complying with disclosure standards “can become a headache” for financial institutions as they need the data to demonstrate progress against their own sustainability targets, said Carsten Egeriis, the chief executive officer at Denmark’s largest lender, Danske Bank A/S.
Clients that don’t report the right data will lose out on access to green funding, which should work as an incentive to get more to disclose their impact, Egeriis said, speaking at an event in Copenhagen last Friday. — Bloomberg
