SUSTAINABILITY REPORT
As briefly expressed in the previous article, the importance of issues relating to ESG factors has increased over the years: this has generated at the same time some constraints in the reporting of sustainability and social responsibility through the drafting of a non-financial document, called the sustainability report.
The aforementioned financial statements are a non-accounting document that is aimed at transparently informing the main stakeholders about the company performance recorded within the reference year, regarding:

• environmental issues,
• social issues,
• relationship and treatment of employees,
• opposition to corruption,
• respect for human rights.

More generally, the commitments and corporate results relating to CSR, Corporate Social Responsibility, are represented within the sustainability report, values, objectives, projects and useful information are shared for all stakeholders, such as lenders, investors, employees , suppliers, customers or consumers, the press, surrounding communities and so on, thus serving as both a communication and business management tool.

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REFERENCE STANDARD
The information previously disclosed and which must be contained in the sustainability report is indicated in the Directive 2014/95/EU, also called NFRD (Non-Financial Reporting Directive), which provides guidelines for the disclosure of non-financial information . In addition to the guidelines, the sustainability report is also generally prepared according to reporting standards, the most widespread of which are those devised by the Global Reporting Initiative (GRI), an international body created with the aim of defining these standards of sustainable performance of organizations. of any size, belonging to any sector and country in the world, in order to generate a unique and easier evaluation of company reports.
In Italy, the Legislative Decree. n. 254/2016 transposed the European Directive already mentioned, making non-financial reporting mandatory for all listed companies belonging to the banking/insurance sector, having an average number of employees exceeding 500 in the current financial year and that at the end of the year have met at least one of the following two criteria:

• total net revenues from sales and services exceeding € 40,000,000;
• total assets of the balance sheet exceeding € 20,000,000.

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THIRD SECTOR
An important change with respect to the framework presented so far was introduced by the so-called "Third Sector Reform" which made the preparation of the social report mandatory, starting from 2021, also for:

• Third Sector entities with revenues exceeding € 1,000,000;
• Volunteer Service Centers, regardless of their economic size;
• social enterprises, including social cooperatives, regardless of their economic size;
• groups of social enterprises in consolidated form, highlighting the social outcomes of each individual entity, as well as of the group as a whole.

These bodies must refer to the preparation of the document to the Ministerial Decree July 4, 2019 "Adoption of the Guidelines for the preparation of the social report of third sector entities". The necessary information that must be contained in the report is divided into the following macro-areas:

• methodology adopted in drafting the document;
• general information on the entity;
• information relating to the corporate governance of the entity;
• information about staff and employees;
• information about the activities carried out by the entity;
• economic, financial and equity situation of the entity;
• other residual information.

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ADVANTAGES IN DRAWING UP THE SUSTAINABILITY REPORT
Although in Italy the drafting obligation is limited to the categories listed, the rest have the right to publish it on a voluntary basis: this choice would bring a series of internal and external benefits. Particularly:

• from an environmental and social point of view, the company would enjoy a better public reputation that would directly influence both potential investors and consumers, generating easier relations with the Public Administration and more generally restoring a corporate image and a brand reputation improve;
• approaching the sustainability of the business, it is possible to benefit from various forms of financing and investment, thus having an alternative access to the credit market and financial resources;
• by promoting sustainable activities, operating costs will be more contained over time and inefficient ones will be eliminated, corporate performance will also be improved and corporate risks controlled.

In conclusion, for the purposes of greater understanding, the following are reported:

• the sustainability report of the Moncler S.p.A. group,
• the sustainability report of the Lavazza S.p.A. group,
• adoption of the guidelines for the preparation of the sustainability report for the Third Sector, a publicly available document, drawn up by the ODCEC of Turin.

Edited by: Mattia Christian Scioli, Chartered Accountant

You can download the article in PDF here

For more information:

mattiascioli@valoreassociati.it

The firm supports clients in drafting the sustainability report.