Date:
17 Oct 2024
Author:
PREO AG
Green IT
PREO is one of the first used software vendors to disclose its sustainability performance
Through the ESG reporting obligations under the EU-wide CSR Directive for greater sustainability, companies or organisations disclose how their economic actions impact the three areas of Environment, Social, and Governance (ESG). The categories defined in the ESRS Set1, derived from cross-cutting and topic-specific standards, include, for example, climate change, resource consumption, greenhouse gas emissions, employee treatment, and the development of working conditions within the value chain.
In this blog post, we explain why it makes economic sense to engage with ESG disclosure requirements early on and demonstrate, using the example of PREO Software AG, how non-reporting companies can benefit from systematic sustainability reporting on their path to climate neutrality.
ESG disclosure requirements – which companies report and when
In addition to large, capital market-oriented companies with more than 500 employees, from January 2025, companies with more than 250 employees, a balance sheet total of €20 million, or an annual net turnover of €40 million will also be required to disclose their sustainability activities. Smaller and medium-sized enterprises will follow from January 2026, but may be able to request a deferral until 2028 under certain conditions to better prepare for the reporting requirements.
ESG disclosure requirements – many smaller companies already indirectly affected
Even though smaller companies will not be directly required to report in the coming years due to their number of employees and balance sheet total, they are indirectly affected by the CSRD due to business relationships with reporting companies. This is because the reporting business partner must provide information about its suppliers and vendors throughout the entire supply chain. The logical consequence is that a company subject to the CSRD will also require its business partners or suppliers to disclose sustainability information in order to continue the business relationship. If these requirements are not met, responsible parties should expect to be less or possibly not considered at all for future contracts. This cascading effect of the transparency obligations within the value chain has been taken into account by the legislation from the very beginning.
That’s why PREO AG decided early on to disclose its ESG activities.
As one of the pioneers in the European market for used software licences for businesses, organisations, and public administrations, PREO places a strong emphasis on security, transparency, and sustainability as fundamental values of its business operations. Therefore, in 2023, the company began evaluating its corporate metrics in the areas of Environment, Social, and Governance (ESG) and publishing these on its website.
Throughout the sustainability project, the management identified the following benefits for smaller and non-reporting companies:
1. Strengthening Corporate Image
An honest and transparent commitment to ecological and social responsibility enhances the trust of customers, partners, investors, and employees in the company. By actively taking measures and openly reporting their sustainability goals, companies demonstrate their long-term commitment to ethical conduct. This not only deepens existing customer relationships but also attracts new customer groups.
2. Increasing Competitiveness
By documenting and disclosing sustainability activities, companies can enhance their competitiveness. They are often better positioned to respond to market and regulatory changes and can more easily compete with larger, reporting companies that have already implemented similar standards. Additionally, this can open up access to new business relationships, as more medium-sized enterprises will also become subject to reporting requirements from 2025, increasing expectations and demands on their business partners, suppliers, and vendors.
3. Better Risk Management and Cost-Saving Potential
Engaging with sustainability topics enables companies to identify potential risks earlier and take proactive measures, such as risks related to climate change, resource scarcity, or regulatory changes concerning environmental protection and social standards. Furthermore, potential savings in ongoing business operations, such as in energy and resource consumption, become transparent and can be realised through appropriate measures.
4. Employee Retention and Employer Attractiveness
In an era of increasing skilled labour shortages, employee retention and recruitment have become significantly more important. Companies that commit to sustainability, communicate this transparently, and actively engage in it are more attractive to young talent who value ethical business practices and environmental responsibility. In addition to increasing employer attractiveness, employee satisfaction and identification with the company also rise, as corporate values align more closely with personal values.
5. Promoting Innovation
Engaging with sustainability topics serves as a catalyst for innovation. Companies that strive to make their processes, products, and services more sustainable are generally more open to developing new business models, technologies, and processes. This can lead to increased efficiency that not only reduces environmental impact but also lowers ongoing costs, such as energy consumption. In this way, even smaller companies can strengthen their market position and position themselves as pioneers in their industry.
PREO sustainability performance: EcoVadis certification and Synesgy certificate ESG Score B.
PREO began documenting its sustainability performance in the areas of Environment, Social, and Governance (ESG) based on ESG reporting standards in 2023 and had this independently certified by EcoVadis, the world’s largest and most trusted provider of sustainability ratings. To date, EcoVadis has established a global network of over 130,000 assessed companies.
In early April 2024, PREO published its results for the reporting period from January to December 2022 and received the score “Committed.” The assessment consists of the performance areas of Environment, Labour and Human Rights, Ethics, and Sustainable Procurement. This places PREO within the top 22 percent of companies evaluated by EcoVadis in the software industry.
Based on the documentation, PREO also received the Synesgy Certificate ESG Score B as a company with a “good” sustainability level.
Detailed information on the current certifications in accordance with the ESG reporting standards, as well as planned activities on the path to becoming a climate-neutral company by 2030, can be found here.
PREO tip: Include used software in ESG reporting
PREO offers all customers a wide selection of used software licenses, particularly from Microsoft and Adobe, including application software, operating systems, and server licences. Take advantage of the free and non-binding initial consultation with PREO’s licensing experts. We are happy to calculate your savings potential based on your current licence inventory and explain how you can document the use of used software for your company and integrate it into your ESG reporting.
More sustainability and lower licence costs through used software from PREO
With PREO, companies, organisations, and public administrations benefit not only from sustainability through used software licences but also from:
- Significant savings on ongoing licence costs of up to 70% compared to the respective new version.
- A 100% legally and audit-compliant acquisition of licences with maximum transparency in all processing steps, including complete documentation in the PREO licence portal “Easy Compliance.”
- Extensive expertise in integrating used software licences into traditional network structures or hybrid licensing models.
- Detailed market knowledge and extensive experience through the audit-compliant transfer of over three and a half million used software licences.
- Existing capacities for software licence management in large IT infrastructure projects with thousands of workstations and cross-border locations.
- Convincing reference projects for numerous medium-sized and large companies across various industries.
