ESG Reporting: Assessing Compliance of Polish Public Companies with EU Taxonomy Guidelines

The paper aims to evaluate how well Polish public companies' activities align with the European Union Taxonomy guidelines (EU Taxonomy). The research involved a review of literature on ESG and non-financial reporting, identification of key guidelines for mandatory disclosures, and analysis of reports from companies listed on the Warsaw Stock Exchange’s three main indices. This approach allowed for determining the shares of activities that meet the EU Taxonomy's compliance and eligibility criteria, focusing on turnover, capital expenditures (CapEx), and operating expenditures (OpEx). The research shows a relatively low percentage of activities compliant with the EU Taxonomy among the studied companies. There are significant sectoral differences in the level of compliance of companies activity with the EU Taxonomy, with compliance level highest in industries with substantial environmental impacts (like industrial production and construction) and lowest in sectors with limited environmental effects (such as finance and healthcare). A key limitation is the analysis's scope, which covers only one year's reports due to the non-financial reporting standards' implementation schedule. Continuous monitoring of this issue is necessary. The ESG activities of companies are crucial from the perspective of building competitive advantage, influencing customer awareness, meeting consumer expectations or finally meeting non-financial reporting requirements, but involve complex processes, including operationalization, implementation, monitoring, and auditing of ESG practices. Non-financial reporting entails significant direct and indirect costs. Non-financial reporting enhances the transparency of companies' operations and is likely to influence company ratings for investment purposes. However, the costs associated with reporting could lead to higher prices and potentially burden consumers. The article addresses a current, practical problem faced by companies required to conduct non-financial reporting. It is relevant for various stakeholders, including consumers, shareholders, business partners, and financiers.