Editorial ESG News 2/2023




Dear Readers, 
Climate change and its consequences are currently among the most intensively discussed topics in politics and business. Among the many UN environmental summits and climate conferences that have been held annually since 1979, COP 21, which took place in Paris in 2015, stands out with regard to the fight against climate change. 195 countries adopted the “Paris Agreement” with the aim of curbing climate change and transforming the global economy in a climate-friendly way. Specifically, the Paris Agreement has four thrusts: Limiting the rise in global average temperature, reducing emissions and adapting to climate change, and directing financial resources in line with climate change goals. By signing the Paris Climate Agreement, the European Union has committed itself to pursuing the climate targets agreed therein as well as a more sustainable development of the economy and society, and has set the necessary transformation framework for this with the so-called “EU Green Deal”. By 2050, Europe is to become the world's first climate-neutral continent, and the transformation to greater sustainability is to be a key growth driver.
The goal of climate neutrality set by the EU Green Deal means net zero CO2 emissions (or simply net zero). This ambitious goal can only be achieved through massive reductions in greenhouse gases, especially CO2. It requires a wide range of efforts in all sectors of the economy and society. However, the economy undoubtedly has the key role to play here. For this reason, the EU is supporting the necessary transformation on the one hand with numerous programs, such as the “Net Zero Industry Act”; on the other hand, the obligation of the economy to report on sustainability (ESG reporting) aims to improve transparency. It should become clear whether companies are making a concrete contribution to the transformation.

In our third issue of ESG News, we therefore focus on the “E” in ESG reporting. The “E” stands for environment.
In the article “Defining climate targets: Transparency of future sustainability reporting”, we explain how the EU has implemented the topic of “greenhouse gas reduction” in the European Sustainability Reporting Standards (ESRS) and what this means in concrete terms for companies subject to reporting requirements. The article “Climate scenario analyses: new challenges for sustainability reporting” describes the “climate scenario analysis” tool and presents the steps required to prepare it. The climate scenario analysis is the central basis for the development of adaptation strategies. For companies, the view of CO2 balancing and decarbonization strategy is particularly relevant. 
It is now known which companies are affected by the obligation to report on sustainability. Whether public companies and companies in the municipal sector are also subject to mandatory ESG reporting is discussed in another article.  

Caution is always advised with “E” issues when individuals or companies advertise themselves or their products as having certain environmental attributes. A recent ruling confirms that the advertiser has an obligation to provide accurate information about the properties. The days of “Greenwashing” are thus numbered.
I hope that we have struck your nerve again with this “environmental edition” of our ESG News and wish you a stimulating read. Of course, we are always happy to be personally available for you.
Yours truly
Martin Wambach

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