Environmental, Social and Governance (ESG)

What is ESG?

Environmental, Social, and Governance (ESG) risks are non-financial risks that impact an organization’s ability to operate sustainably and ethically. They include:

• Environmental risks such as climate change, greenhouse gas emissions, resource depletion, and pollution.
• Social risks like labor practices, diversity and inclusion, health and safety, and human rights.
• Governance risks including anti-corruption, executive pay, board composition, and data ethics.

These risks are increasingly seen as material to corporate performance—affecting brand value, investor confidence, supply chain resilience, and compliance. What used to be voluntary initiatives are now turning into formal requirements. Businesses that fail to address ESG risks may face financial penalties, reputational damage, and loss of access to capital.

Which organizations are subject to or can benefit from ESG?

ESG risk management is becoming essential for a wide range of organizations—whether due to regulatory obligations, investor pressure, or internal goals for responsible business conduct. It is especially relevant for:

• Publicly listed companies, which face mandatory ESG disclosure under local or international frameworks.
• Large enterprises with multinational operations, complex supply chains, or sustainability-linked financial instruments.
• Financial institutions, which integrate ESG into investment and credit decisions.
• Private companies preparing for sustainable financing or aiming to meet stakeholder expectations.
• Companies participating in voluntary sustainability frameworks, such as the UN Global Compact, GRI, or SBTi.

Even if ESG disclosure is not yet legally required, managing ESG risks adds value—improving risk resilience, boosting stakeholder trust, and enhancing long-term competitiveness.

The Corporate Sustainability Reporting Directive (CSRD)

A key driver of ESG compliance in the EU is the Corporate Sustainability Reporting Directive (CSRD), which significantly expands the scope of ESG reporting obligations. It replaces the Non-Financial Reporting Directive (NFRD) and introduces stricter standards for how companies must report on sustainability-related risks, impacts, and performance.

Under CSRD, organizations must report in line with the European Sustainability Reporting Standards (ESRS), which cover a wide range of ESG topics including climate change, biodiversity, workforce, human rights, and governance. The directive applies to:

• Large EU companies that meet at least two of the following:
  • Over 250 employees
  • €40 million+ in annual turnover
  • €20 million+ in total assets
• Listed SMEs, with reporting obligations starting in 2026 (with opt-out available until 2028)
• Non-EU companies generating more than €150 million in annual EU revenue and having at least one EU subsidiary or branch

The CSRD impacts over 50,000 companies, many of which must now prepare detailed, assured ESG disclosures as part of their annual reports. Even companies outside the direct scope may be pulled in through value chain reporting or investor requirements. Implementing robust ESG risk management and internal controls is a critical step toward achieving CSRD compliance—and Impero provides the tools to help do exactly that.

The Omnibus Directive and ESG reporting

In early 2025, the European Commission introduced the Omnibus Directive, proposing to simplify and delay certain sustainability reporting and due diligence obligations under the CSRD and CSDDD. As part of this initiative, reporting deadlines for many companies were postponed by two years, giving organizations more time to prepare for ESG disclosures. In parallel, a separate proposal may exempt companies with fewer than 1,000 employees from mandatory CSRD reporting altogether. These changes reflect a broader EU effort to reduce administrative burdens while preserving the core goals of the European Green Deal.

Core elements of ESG risk management supported by Impero

Impero helps organizations translate ESG ambition into action with a structured, scalable platform that supports:

• Structuring and mitigating ESG risks across the organization by mapping and assigning ESG risks and internal controls across departments, legal entities, or business units, and linking them to KPIs and process-level data tailored to your ESG objectives and reporting scope.
• Continuously assessing materiality and risk by enabling flexible risk mapping, tagging risks with custom metadata (such as materiality), and using workshop tools to help teams regularly update, prioritize, and refine their ESG risk profiles.
• Aligning the performance of internal controls across functions by assigning ESG-related controls to specific roles in Compliance, Legal, Operations, or Sustainability, and automating reminders to ensure controls are performed and reviewed on schedule.
• Assessing whether controls are effective by using Impero’s dashboards and reporting features to evaluate the design and performance of ESG controls, and drilling into specific risks, entities, or individuals to identify and address gaps.
• Building trust in ESG data and indicators by maintaining clear audit trails, offering view-only access to auditors and board members, and delivering real-time performance updates through automated push reports.

How can Impero help you manage ESG?

Impero enables you to operationalize ESG risk management with:

• A central platform for ESG risks, controls, and documentation
• Automation of recurring tasks and reminders
• Tagging and filtering for real-time risk prioritization
• Consolidated dashboards for oversight and communication
• Support for audits and reporting, including CSRD and other ESG standards

Whether you’re preparing for CSRD, supporting value chain partners, or strengthening sustainability governance, Impero provides the structure to move from ESG intention to execution.

Get started with Impero

With regulatory demands increasing and stakeholder expectations rising, it’s more important than ever to get ESG risk management right. Impero helps you take control—with transparency, efficiency, and confidence.
👉 Reach out to our team to explore how we can support your ESG journey.