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Social Impact for Climate Justice

An exploration of City Science and the new ESG/CSRD frameworks for evidence-based investments in local policymaking

Building upon the new EU legislation for the Corporate Sustainability Reporting Directive (CSRD) that is effective as of 1 January 2024, and building upon the new Environmental Social Governance framework (ESG) introduced by the World Economic Forum of Davos for the financial sector in 2019, this report offers cities and regions new avenues for collaboration between the public, private and civic sectors. Given the many intertwined crises humanity and the planet are facing, vulnerable communities require support and these new frameworks may contribute to such an effort.

CSRD/ESG frameworks demand that companies not only offer transparency of financial information in their annual report but also show the ecological footprint and social impact they have. Eventually, CSRD/ESG will create a new sustainable dynamic among companies, which can help to achieve more social and sustainable impact in cities and regions.

This report investigates how local democratic bodies of governance, like a municipality, a regional office or a waterboard, can facilitate these new opportunities for social impact collaboration. For the sake of easy language and for the sake of including the private sector in making this new paradigm develop, we will now merge terms and use ESG/CSRD, realizing that ESG is term that is used by the private sector and that CSRD is the ‘hard’ evidence that the EU Commission requires.

In 2023 the City of Amsterdam, under the leadership of the City Science Office, embarked on an exploration of the new ESG/CSRD landscape. The ESG Innovation Collective, a private company, brought the private and financial sectors into this exploration. Alongside partners from the university and the city of Berlin, other cities and universities of the City Science Initiative such as Reggio Emilia, Thessaloniki, and Barcelona, with over 50 experts from the private, public, social, and cultural sectors were invited to share their views on the opportunities and threats for cities and businesses arising from this new regulation. Experts from the private, public and civic sectors contributed. The consensus at the end of this exploration appeared to be that this new accountability paradigm, which ESG and CSRD initiate, will be a game changer. As a result, a new ‘ESG for Cities’ framework (ESG4C) is being developed. ESG4C positions cities as experts on social impact for the ‘S’ in ESG, which also resonates with the social impact that is assessed in the CSRD reporting.

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