ESG Disclosure: Article 3 | The good news: MDD automates sustainability reporting

«Customers continue to work with familiar programs such as Excel & Word. The data is processed by the MDD platform.»

MDD offers its own platform for the creation of sustainability reports and thus automated creation processes. According to the single source of truth concept, the data is recorded once and can be regularly updated for future reports in an established process. The so-called roll forward via the MDD platform enables the figures to be consistently updated in the next sustainability report.

Easy onboarding on the MDD platform.

On the customer side, entries are still based on familiar programs such as Excel, Word, etc. With the MDD platform and the automated creation of sustainability reports, employees do not have to familiarize themselves with new programs; existing programs can generally be read by the platform.

What you should already be doing today in the context of ESG disclosure.

Currently, ESG disclosure in Switzerland affects around 300 large companies that either fall under the EU CSRD or are directly affected by Swiss regulations. However, as described in Article 2, the Federal Council plans to tighten the rules for sustainable corporate governance and bring them more in line with international standards.

The most important points of the planned changes to ESG disclosure at a glance.

1. Extension of the reporting obligation: In future, around 3,500 companies will be obliged to report on sustainability.
   
   
2. Adjusted thresholds: companies with 250 employees, CHF 25 million in total assets and CHF 50 million in turnover will be required to report if they reach two out of three thresholds for two consecutive years. 
   
   
3. External review: reporting should be reviewed externally by an auditing company or a conformity assessment body.
   
   
4. Choice of standard: Swiss companies should have the choice of following either the EU standard or another equivalent standard.

These changes are a reaction to the further development of EU law and Switzerland's close economic ties with the EU. A regulatory impact assessment assumes that up to 50,000 Swiss companies could be directly or indirectly affected by the new EU rules.

Challenges and recommendations.

The ESRS represent a comprehensive set of rules with more than 100 disclosure requirements and over 1000 data points. Whether reporting is recommended for a company at group level or, for example, as a subsidiary, must be decided on a case-by-case basis.

Given the complexity of the topic and the evolving regulatory landscape, early preparation and cooperation with specialized legal experts is highly recommended. Companies should not only adapt to current requirements, but also keep an eye on future developments in order to remain competitive and minimize potential risks.

Importance for SMEs.

Even SMEs and other companies outside the direct area of application should consider publishing sustainability reports, as large companies will increasingly demand such information from their suppliers.

Proactive disclosure of non-financial information in line with international best practice can be used as an opportunity to stand out from the crowd and strengthen their own internal processes.

MDD advises - and implements.

When collecting and processing data, MDD is happy to recommend software that is compatible with the MDD platform or cooperation partners who can shed light on the subject - especially for the first sustainability report. Once the crucial data from the customer is ready, we establish the connection to the MDD platform. The automated creation of the reports can begin. In the meantime, we advise you on how best to organize the creation processes on a permanent and recurring basis.

Would you like to find out more details about ESG disclosure or the automated creation processes for sustainability reporting?

Book a connect call with Fabio Negro, COO at MDD or view his contact details below. 

Note on the article series:

• This was article Nr. 3 which answers the most important questions on how companies can prepare for the obligation to publish a sustainability report.
• Article Nr. 1, provides basic insights into ESG disclosure and the obligation to publish a sustainability report. Read it here.
• Article Nr. 2 provides information on the current ESG disclosure rules and which companies are affected in Switzerland. Read is here.
  
• Article Nr. 4 illustrates the advantages of the MDD platform in the preparation of sustainability reports.