ČEZ is one of the largest energy companies in the Czech Republic and operates in Western and Central Europe. Its chief executive officer Daniel Beneš, outlines how sustainability has been woven into the firm's core business objectives as it works towards make the energy sector more sustainable.

Environmental Finance: As the recipient of the award for Sustainability reporting of the year, EMEA in this year's Sustainable Company Awards, what would you say are the main challenges in sustainability reporting facing businesses today?

Daniel Beneš: A major challenge is the existence of various standards and frameworks, making it complex for companies to navigate a labyrinth of diverse requirements and guidelines.

The EU Corporate Sustainability Reporting Directive (CSRD) directive is a very welcome reference framework that will bring much-needed standardisation.

Businesses must also remain flexible due to a rapidly evolving landscape and shifting industry expectations. What was considered sufficiently sustainable yesterday may not be adequate today, posing a continuous challenge for companies striving to stay up to date.

Another hurdle is the sheer variety, scope, and subsequent interpretation of data required by different stakeholders. For instance, ESG rating agencies and investors often have specific requirements for disclosures. This complexity makes data collection and analysis both laborious and time-consuming.

Lastly, the risk of allegations related to greenwashing and "green shaming" looms large. In an era that prioritises transparency and authenticity, companies boosting their sustainability profiles – even unintentionally – risk public censure and erosion of trust. All this considered, we are very honoured to win the Environmental Finance Sustainable Company Award for Sustainability reporting of the year in EMEA. We know just how much effort goes into this area in all the companies that take ESG seriously.

EF: How has innovating your digital library helped with your disclosure efforts?

DB: We understand that sustainability is a collective responsibility. To facilitate open and transparent communication, we've launched a new publicly available sustainability document library. We disclose almost 1,800 key data points through an interactive data tool, which can be customised based on different standards and metrics. This digital approach also enables us to readily update our data, keeping the platform current.

This approach has tremendously helped with stakeholder engagement. Our investors, rating providers, and auditors all gave us positive feedback, as they appreciate the easy access to our data. It's also a great resource for our employees: we eliminate human error in communicating the right numbers by providing a single access point, which guarantees consistency.

EF: How has it changed the wider operational and sustainability strategy of the business?

DB: For ČEZ Group, ESG, and sustainability are not mere compliance checkboxes. They are integrated into our overall management and corporate strategy. We've woven sustainability into our core business objectives, aiming for a more stable and secure future.

ESG principles are now embedded into our daily operations and are essential in shaping our corporate strategy. As these everyday decisions are informed by data, we are confident in making rational and evidence-based decisions that are good for both business and sustainability.

EF: As you look ahead to your long-term sustainable development strategy, which areas do you expect will be critical to the business?

DB: We've launched initiatives in the firm of supply chain management, biodiversity and climate risk management, stakeholder engagement, a policy matrix, and the automation of ESG data collection. These are critical areas that require systematic attention.

In supply chain management, we're adapting to forthcoming EU legislation. A similar act on Corporate Due Diligence Obligations in Supply Chains is already in effect in Germany. It impacts some of our subsidiaries but also us in our role of being a supplier to German companies. We are replacing generic supplier contracts with more targeted ones to effectively address sustainability throughout the supply chain.

We acknowledge the growing importance of biodiversity across sustainability platforms and are taking a multidisciplinary approach to address it. We aim to be prepared for Taskforce on Nature-related Financial Disclosures (TNFD) and other nature-related disclosures.

Climate risk management is critical for us. We aim not only to minimise our climate impact but also to manage risks to our operations due to climate change. Regarding stakeholder engagement, we maintain ongoing dialogues with customers, suppliers, communities, investors, and other interested parties.

EF: What is the ESG strategy for the business going forward?

DB: Through our strategy 'Clean Energy of Tomorrow', we are actively pursuing decarbonisation through the reduction of our emission intensity. Currently, 60% of our production portfolio comprises of emission-free sources, and we aim for climate neutrality by 2040.

Despite significant improvements in ČEZ Group's ESG ratings, we remain committed to continuous reporting and diligent efforts to close even minor gaps. We rely on a data-driven approach, informed by the latest scientific research, to steer our sustainability agenda. Recognising that sustainability is an ongoing journey, we regularly revise our ESG objectives. We understand that the journey to sustainable business never ends. That is why we continuously update our ESG programme and define new ESG initiatives

We support global efforts and initiatives in the Czech Republic and in all markets where we operate. As one of the biggest employers in the Czech Republic, we strive to be the leader and set an example. We have joined the United Nations Global Compact and the Global Compact's CEO Water Mandate, committing to responsible use and protection of water sources.

We are also committed to the UN Sustainable Development Goals (SDGs). Last year we signed the Pride Business Forum Memorandum of Commitment to continue to be a safe, diverse, and inclusive employer, and this year we joined the UN Women's Empowerment Principles initiative to advance women's equality in the workplace, marketplace, and communities. Joining these initiatives shows our public commitment and enables us to walk the sustainability journey together with our peers across the globe.

For more information, see: www.cez.cz/sustainability/en