2025 is the first time that public interest entities will be required to prepare a sustainability report – which must be validated by an auditor – for the preceding year. Nine of Grant Thornton Baltic’s auditors were recently certified to audit sustainability reports, which will allow our network to provide service to many businesses and organisations subject to the obligation.
The new requirement stems from the European Union’s corporate sustainability reporting directive, which Estonia transposed into its national legislation. The objective of sustainability reports is to assess the impact of companies’ activities on the environment, social well-being and economic sustainability. It is a fairly new field, so Estonia had to train and certify auditors competent in this area.
In autumn 2024, the Auditors’ Association held a comprehensive training programme on the sustainability reporting topic. Participating auditors became proficient at the standards for preparing and auditing sustainability reports as well as conversant with the legal acts in the field. The training ended with an examination, which all of the sworn auditors from Grant Thornton Baltic passed. The newly certified sustainability report auditors are Helery Roos, Martin Luik, Merle Rõbovõitra, Tarmo Rahkama, Anni Vaiksaar, Mart Nõmper, Meelika Mülla, Janno Greenbaum and Julia Svidun.
In the phto from the left: Helery Roos, Martin Luik, Merle Rõbovõitra, Tarmo Rahkama, Anni Vaiksaar, Mart Nõmper, Meelika Mülla, Janno Greenbaum, Julia Svidun
All public interest entities are required to prepare and release a sustainability report for 2024 as part of their annual report for that financial year. Public interest entities are defined as companies with over 500 employees and whose shares are traded on a regulated securities market or which operate as credit institutions or insurers. In future, the obligation will also extend to large companies and corporate groups (in 2025) and publicly listed small and medium-sized companies (in 2026). The Ministry of Finance estimates that the obligation will affect a total of 300 companies and corporate groups. Although one-third of them can use an exception for consolidation, which allows them to waive preparation of sustainability report (if the same information was already disclosed in the parent’s report), the sustainability assessment process and measurement of key sustainability aspects is still necessary to provide input for the parent’s report.
If desired, companies not required to do so may also prepare a sustainability report. Some may need to do so due to interest from third parties (investors, banks, partner in cooperation). To ensure that the voluntary reports are high in quality and comparable, a voluntary standard has been developed for unlisted SMEs. This is a reporting tool that micro-enterprises and SMEs can use to monitor their sustainability and convey information in response to inquiries for ESG information from their business partners.
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