Sustainability as an Informative Business Strategy: New EU Directive and the Principle of Double Materiality

Abstract

Sustainability has become a relevant competitive strategy in business performance, which has traditionally been analyzed from three dimensions: economic, social, and environmental. From the economic point of view, it can be understood as those actions that aim to favor social and environmental activities and that help improve the financial situation of the company. From the environmental point of view, it focuses on actions that try to achieve a balance of the environment through practices that favor its quality. From the social point of view, it is the voluntary aid expressed in economic resources granted by companies to external projects of socioeconomic development. Given the impact of sustainability on business activity, we must add the dimension of sustainable information. At the end of 2022, the Council of the EU approved the Sustainability Reporting Directive, requiring companies to provide concrete detailed information, which strengthens the accountability of the company, avoiding divergences between the different existing rules and facilitating a transition towards a sustainable economy, aligned with the Sustainable Development Goals of the 2030 Agenda.

Member of the research group “Responsible Enterprise Information System: Accounting and Non-Financial Reporting” (SIER) of the UCLM.