One of the significant questions concerning ESG issues is the cost of transitioning to a more sustainable business environment. Will it result in increased financing costs and restricted access to new borrowing, or will it, on the contrary, lead to the development of new market segments and gradual change? While we cannot provide definitive answers to these questions, in this article, we will examine five ESG drivers and regulatory changes that will be pivotal in 2024. From the introduction of the New Green Asset Ratio to the Corporate Sustainability Due Diligence Directive (CSDDD/CS3D), we will explore the conditions associated with these new requirements and the potential penalties for non-compliance.
Environmental, Social, and Governance (ESG) risks are increasingly influencing investment decisions, expansion strategies, business partner selections, and market choices.
Following the introduction of the taxonomy[i],banks have begun aligning their lending policies with the new regulatory requirements. Consequently, their financing through European funds, guarantee instruments, or bonds has become dependent on these criteria. Private investors are progressively considering the impact of their investments beyond just financial gain. This shift is motivated by ethical considerations, risk management strategies, and the recognition of the higher long-term value of sustainable products and services.
2024 is anticipated to be a pivotal year in terms of regulatory developments. An increase in mandatory ESG requirements is expected to intensify pressure on businesses to more effectively integrate ESG considerations into their operations, financial statements, and relationships with banks, suppliers, and contracting authorities. Below, they highlight five ESG drivers and regulatory changes that will be defining in 2024.
1. New Green Asset Ratio
2. Which Projects Will Be More Attractive for Funding?
3. ESG Ratings
4. The Corporate Sustainability Reporting Directive[xv] (Directive (EU) 2022/2464 or CSRD)
5. The Corporate Sustainability Due Diligence Directive (CSDDD/CS3D)
See more information about the ESG drivers and regulatory changes in the file below.
