According to the new Navigating ESG: ABSL's 2023 Overview report, more than 70 percent of business services companies have implemented global ESG strategies locally. Defining and implementing ESG (Environment, Social, Governance) policies, integrated with the organization's business goals, contributes to building innovation and prepares companies for the changing expectations of stakeholders and employees. ESG has the potential to be one of the key growth drivers for the business services industry.

The business services sector, which employs over 435,000 people in Poland, provides a steady contribution to the economy in the form of exports of services, with an estimated share of 4.5% of the country’s national GDP. Poland maintains a leading position in Europe in terms of the number of jobs created as a result of foreign direct investment and is one of the leaders in investment attractiveness rankings both in Europe and globally. According to ABSL's analysis, ESG factors are some of the main drivers of attracting further investments.

ESG – an area of growth for the business services sector 

The role of end-to-end processes and the shift towards highly specialized services are steadily growing, with a market share of 57 percent in 2023. Global roles, also related to ESG reporting, are being transferred to Poland and may become a new specialty of business services centers operating there.

Business services centers can benefit from the growing role of ESG in two ways. As places employing specialists in many fields, and by putting emphasis on the implementation of these assumptions in their strategies, they have the opportunity to become examples of sustainable and responsible development for the entire business. The surveyed companies are motivated to take on challenges and learn from each other on this issue, reinforcing the belief that the sector is led by truly responsible leaders. This belief is illustrated by the numbers – over 70 percent of companies have implemented global ESG guidelines locally. On the other hand, the implementation of ESG-related obligations by companies is an opportunity for the further development of our industry based on the competences of Polish employees, especially those in the analytical area, explains Agnieszka Orłowska, Vice-President of ABSL, ESG.

Outsourcing ESG reporting to the business services sector will require certified specialists in the areas of ESG audits, DE&I and environmental consultants, as well as controllers and analysts on the company’s carbon footprint and its supply chain – ESRS requires reporting from both the company and its energy suppliers and subcontractors.

Analysts currently working in Business Intelligence departments have the knowledge needed to aggregate and analyze the data required for ESG reporting. As a result, they can enter the ESRS-compliant reporting market virtually overnight. Already, 37 percent of the companies surveyed in our report had dedicated ESG reporting resources. With 68 percent already preparing reports at global corporation level, according to Andrzej Gutowski, ESG Director at Colliers.

The ESG double materiality reporting requirement – both financial materiality and impact materiality – could further expand the scale of opportunities for the sector. Financial materiality reporting involves identifying areas that can impact a company's financial performance in the short, medium and long term. Impact materiality, on the other hand, refers to the positive or negative impact of an organization on the environment and society, both through its direct activities and the company's value chain.

In light of legal changes and the growing role of corporate social responsibility, ESG reporting may become one of the fastest growing branches of the business services sector in the near future, creating new opportunities for the community of member companies, believes Piotr Jaśkiewicz, Head of International Trade Practice at the Polish branch of Baker McKenzie.

Directive of opportunities and challenges

The new EU directives oblige companies that have been reporting, according to the NFRD (Non-Financial Reporting Directive) guidelines, to start reporting according to the ESRS (European Sustainability Reporting Standards) as early as 1 January 2025.

Reporting regulations are not the only reason companies are interested in ESG issues. This reporting assumes activities aimed at increasing social responsibility and improving the lives of employees. These issues translate into both improving the image of companies and increasing their competitiveness in acquiring talents on the job market, says Magdalena Lech, Senior Consultant at Mercer.

According to the report, 95 percent of companies cited attracting and retaining top talent as the main reason for focusing on DE&I (Diversity, Equity & Inclusion) which is part of ESG. Other reasons included: making a social impact (89 percent) and strengthening brand reputation (86 percent). The surveyed companies from the sector indicated the need for further activities aimed at equalizing opportunities between genders. According to the survey, organizations were increasingly analysing the gender pay gap (more than 50 percent of companies) and 38 percent had taken corrective action to close identified pay gaps. In the long term, ESG will therefore be one of the most important growth drivers for the entire industry.

ABOUT THE REPORT

Navigating ESG: ABSL's 2023 Overview report was prepared by experts from the Association of Business Service Leaders (ABSL) in cooperation with Baker McKenzie, Colliers and Mercer. The report serves as a guide for organizations to create sustainable and inclusive environments, comply with regulatory requirements, and contribute to a more equitable and socially responsible future. The report presents current state of ESG elements in companies in the business services sector, describes the requirements resulting from the ESRS directive and presents the threats and opportunities resulting from ESG reporting for the sector. Navigating ESG Report: ABSL's 2023 Overview is available here.

ABOUT ABSL

Association of Business Service Leaders - brings together 250 of the world's largest companies, representing a sector which currently employs over 435,000 people in Poland. The 1,800 service centres, dispersed in over 80 locations, create a thriving sector supporting economic development thanks to, among other things, innovative solutions implemented by international corporations. The aim is to build attractive and sustainable ecosystems that create new jobs through positive engagement and responsibly develop investment and business in local communities.