You may agree that environmental, social, and governance (ESG) reporting can feel complicated. You deal with many frameworks, tricky metrics, and growing investor, customer, and employee demands. This makes it hard to know where to begin.
This ultimate guide aims to make ESG reporting clear, practical, and achievable for you. You'll find out what ESG reporting is. You'll learn how to pick the right frameworks and metrics for your business. Plus, you'll see how to visualize your data well. You’ll also explore inspiring examples from companies that do ESG reporting well.
By the end, you’ll feel more confident creating ESG reports that engage your audience and help future-proof your organization.
ESG Reporting Explained: What It Is and How It Works
Remember when a company's success was measured only by how much money it made? Those days are fading quickly. Today, your investors, customers, and even your employees expect your business to care about more than just profits. They want transparency about your environmental impact, social responsibility, and the decision-making process. This is exactly where ESG reporting comes into play.
What Does ESG Stand For?
ESG stands for Environmental, Social, and Governance. But what do these categories actually include?
Environmental factors relate directly to how your company affects the planet. This can include:
- greenhouse gas emissions
energy use - water and resource consumption
- waste management
- pollution control practices.
Social factors look at how your company treats people, both employees and communities. This can include:
- fair labor practices
- diversity and inclusion
- workplace safety
- employee well-being
- involvement in community initiatives
Governance factors are about your company's internal structures and decision-making processes. This can include:
- transparency
- diversity and independence of your board
- executive compensation
- business ethics
- risk management
What Are ESG Reports?
So how do companies show their progress in these areas? This is where ESG reports come in. An ESG report is a clear summary showing how your company performs in environmental, social, and governance areas. These reports show your company's actions, goals, and results, making it easy for everyone to see your progress.
Since ESG covers a wide range of topics, companies usually need to decide which ones are most relevant to their business and stakeholders. This process is called a materiality assessment. The results help determine which ESG topics should be prioritized and reported on. Most ESG reports focus on these material topics. However, some companies also include broader ESG commitments or required disclosures.We'll explore what to include in your ESG report later in this blog article.
Why Your Business Should Care About ESG Reporting
Still wondering if ESG reporting is worth the effort? Whether you're a small business or a global brand, ESG reporting can offer real strategic value—not just regulatory compliance. We listed the most important benefits for you:
- Transparency builds trust. Being open about your environmental, social, and governance efforts creates credibility. It shows stakeholders that you’re serious about accountability and willing to be honest, even when things aren’t perfect yet.
- It attracts investors. More investors are using ESG performance as a decision-making tool. A solid ESG report shows you plan for the long term. It means you manage risks well and meet market expectations.
- It enhances your brand reputation. Customers increasingly expect companies to act on their values. ESG reporting helps you show—not just tell—that you're committed to making a positive impact.
- It helps you spot risks and opportunities. The process of ESG reporting often reveals blind spots or opportunities for improvement. It can show ways to save money, new ideas, or risks that need your focus.
- It gives you a competitive edge. People want to work for, buy from, and partner with companies that align with their values. Transparent ESG efforts can help attract and keep employees, loyal customers, and purpose-driven partners.
- Sometimes, it’s not optional. Regulations are increasing. Depending on your region or sector, ESG reporting might already be a legal requirement—or it could be soon. See the next chapter on ESG frameworks for more on this topic.
Whether you're doing it to meet regulations or to strengthen your business, ESG reporting is no longer just a “nice-to-have.” It’s becoming a core part of how companies operate and communicate.
But where do you start? That depends on whether you need to follow mandatory rules—or if you're choosing to report voluntarily.
Finding Your Way: Voluntary vs. Mandatory ESG Frameworks
Before you dive into creating your ESG report, it’s important to understand which reporting frameworks apply to your business. Are you legally required to report on ESG topics? Or are you doing it voluntarily to meet stakeholder expectations and stand out in your market?
To understand better, let’s look at the two main types of ESG frameworks:
- Mandatory: These are required by law.
- Voluntary: These are used to follow best practices or meet stakeholder needs.
Below is a quick overview of the most well-known ones, grouped by type. Each one links to its official source so you can explore further. After that, we will provide a checklist for you to check whether ESG reporting is mandatory for you.
Types of ESG Frameworks (And Where to Learn More)
Mandatory Frameworks (Regulatory Compliance)
- CSRD (Corporate Sustainability Reporting Directive)
Applies to large EU companies and requires reporting on a wide range of ESG topics using the European Sustainability Reporting Standards (ESRS). - SFDR (Sustainable Finance Disclosure Regulation)
Applies to financial market participants in the EU and requires disclosure of sustainability risks and impacts in financial products. While not a direct ESG reporting standard for corporates, it influences what data financial actors request from companies. - TCFD (Task Force on Climate-related Financial Disclosures)
Focuses on climate-related financial risks. Mandatory in several countries, including the UK and Japan, and supported globally. Often used as a foundation for climate-related disclosures. - SEC Climate Disclosure (Upcoming)
A proposed U.S. rule that will require public companies to disclose climate-related risks and greenhouse gas emissions.
Voluntary Frameworks (Best Practices)
- GRI (Global Reporting Initiative)
A widely used framework that helps companies report on a broad range of ESG topics, including social and environmental impact. - SASB (Sustainability Accounting Standards Board)
Offers industry-specific standards focusing on ESG issues that are financially material to investors. - CDP (Carbon Disclosure Project)
Helps companies disclose environmental data, such as emissions and water usage. Frequently used to respond to investor requests and support climate transparency. - ISSB (International Sustainability Standards Board)
A new global initiative aiming to unify ESG disclosure standards, building on TCFD and SASB.
Do You Need to Report ESG Data?
Disclaimer: This section provides general guidance and should not be considered legal advice. ESG reporting requirements can vary depending on your specific circumstances and location. Always consult local regulations or legal experts to confirm your reporting obligations.
Not every organization is required to publish ESG reports yet—but that’s changing quickly. In the coming years, sustainability disclosures will become mandatory for more companies, especially in major markets like the EU, UK, and the US. Here are some key questions to help you assess whether your company will need to comply:
✅ Are you a large company based in the EU?
(Defined as having two out of the following criteria: more than 250 employees, €40 million in turnover, or €20 million in total assets.)
→ Yes? Then the CSRD (Corporate Sustainability Reporting Directive) applies. Reporting will be phased in starting from 2025 for FY2024 data, depending on the size and type of your company. Learn more at EFRAG.
✅ Are you a publicly listed company?
(Listed on exchanges in the EU, US, UK, China, or other jurisdictions with ESG regulations.)
→ Yes? Then you’re likely already facing or soon to be subject to mandatory ESG disclosures under local rules, such as CSRD in the EU or upcoming SEC regulations in the US.
✅ Are you a financial institution, insurer, or investment firm operating in the EU?
→ Yes? Then the SFDR (Sustainable Finance Disclosure Regulation) applies. You must disclose how sustainability risks are integrated into investment decisions.
✅ Do you operate in a country with ESG reporting laws?
Regulations vary significantly by region, and new rules are being introduced regularly. To check what applies to your country, here are a few helpful resources:
- EFRAG – for EU sustainability reporting guidance under CSRD and ESRS
- UK Financial Conduct Authority – for TCFD-aligned climate disclosures in the UK
- SEC (U.S. Securities and Exchange Commission) – for updates on U.S. climate disclosure rules
- Japan FSA – for ESG rules on listed companies in Japan
- China Securities Regulatory Commission (CSRC) – for ESG disclosure rules in China (in Chinese). If you work in these areas, ESG reporting may be required. Be sure to consult local regulatory websites or legal advisors.
→ If you operate in one of these or similar jurisdictions, ESG reporting might be mandatory. Be sure to consult local regulatory websites or legal advisors.
✅ Are your investors, partners, or customers requesting ESG information?
→ Even if not legally required, ESG reporting may be expected. Voluntary frameworks like GRI or CDP can help you meet those expectations and prepare for future regulation.
If you answered “yes” to any of the above, it’s time to look into the reporting standards and frameworks that apply to you. If not, you can still gain value from voluntary ESG reporting—and get ahead of growing expectations.
How Do Companies Publish ESG Reports?
Once you know if ESG reporting is voluntary or mandatory and which ESG frameworks apply to your company, the next step is choosing how to report. You can share ESG information in various formats. You can decide what suits your business and stakeholders best.
Here are some common approaches:
Dedicated ESG or Sustainability Report
A standalone report focused entirely on ESG topics. These reports often align with frameworks like GRI, SASB, or CDP and are ideal if you want to show depth and commitment.
A well-known example is Apple’s Environmental Progress Report 2024. While it’s not a full ESG report but rather an environmental sustainability report, there’s still a lot to learn from it.
Apple’s report is a great showcase of how strong design and clear storytelling can bring sustainability efforts to life. The layout is clean and polished, fully in line with their branding. A simple timeline highlights key milestones, making their progress easy to follow.
What really stands out is the use of data visualizations. The charts are easy to read and often include annotations that add helpful context. This makes the data feel more accessible and meaningful.
Annual Report with ESG Section(s)
A company’s annual report that has a section(s) focused on ESG or sustainability. These sections can differ in detail. Some offer a broad overview, but Ørsted’s Annual Report 2024 is detailed and well-integrated. Annual reports are generally finance-focused and aimed at investors, with ESG reporting supporting that financial story.
Ørsted’s 2024 Annual Report is a great example of how to integrate ESG and financial reporting into one clear and cohesive document. The structure follows best practices, including an extended double materiality assessment. Each of the three ESG pillars is given proper attention, supported by clear KPIs, year-on-year comparisons, and well-explained targets.
What really makes the report stand out is its use of strong, thoughtful data visualizations. Many charts not only show past performance but also include future targets, which helps readers easily understand progress. Overall, the report feels open and well-organized, with a clear connection between strategy and sustainability goals.
Integrated Report
A strategic report that blends financial and ESG data. It shows how the company builds long-term value. ESG factors are not separate—they’re embedded throughout the report. Integrated reports typically follow frameworks like the Integrated Reporting Framework (IIRC) or the ISSB standards. They are also more holistic. They often target a wide audience. This includes shareholders, investors, employees, policymakers, and the general public. An example is the 2024 SAP Integrated Report.
Website Disclosures or ESG Microsites
An easy way for companies to share their ESG data is through their website or a special page called an ESG microsite. A microsite is a small website or a separate section of the main website that focuses on one topic—in this case, ESG reporting. These pages often include things like interactive charts, downloadable PDFs, and clear information that’s easy to explore.
For example, besides its full annual report, SAP also has a special CSRD webpage. It shows important ESG data using interactive visuals and clear explanations across several pages.
Regulatory Submissions
In some places, you must submit ESG data officially. This includes CSRD in the EU and TCFD-based reports in the UK.
Choosing the right reporting format depends on your goals, audience, and regulatory obligations. No matter if you want to meet compliance needs or share a great sustainability story, there's a format for you.
Next up, we’ll look at what actually goes inside an ESG report—so you know what to include once you’ve chosen your approach.
General Structure of an ESG Report
An effective ESG report communicates your company's sustainability story clearly and transparently. But what exactly goes into an ESG report? Although each business is unique, there are common metrics and KPIs you’ll generally find across most ESG reports.
Starting with a Materiality Assessment
Start your ESG reporting journey with a materiality assessment. This strategic process helps you find and prioritize the ESG topics that matter most to your business and stakeholders.
This assessment includes feedback from internal stakeholders, like employees and leaders. But it also collects feedback from outside groups like investors, customers, and community members. The process usually involves surveys, workshops, or interviews. This helps grasp the importance of different ESG topics from various viewpoints.
Your materiality assessment results shape your ESG report. This helps you focus on the most important and relevant issues. To learn more about conducting a detailed materiality assessment, you can refer to resources such as this guide by GRI.
Clearly State Your Frameworks
At the beginning of your report, clearly mention which frameworks or standards you're following, such as GRI, SASB, TCFD, CSRD, ISSB, or CDP. Explicitly stating these helps stakeholders understand the foundation of your reporting.
Typical Flow of an ESG Report
A well-structured ESG report typically includes the following:
Begin with:
- A visually engaging Front Page highlighting your company's sustainability vision.
- A clear Table of Contents for easy navigation.
- A strong CEO or Leadership Statement to show your company's dedication to ESG. It offers strategic insights and highlights your commitment to ESG issues.
- An Executive Summary or Highlights section. This page shows key ESG achievements and challenges from the reporting period.
The main body should:
- Divide the content into three sections: Environmental, Social, and Governance. Each section should include information backed by data in the form of charts, tables, or infographics. You can also include relevant case studies or examples to show performance.
- Clearly state how the ESG activities in each section match your selected frameworks and standards.
Conclude with:
- A detailed Data and Methodology section or appendix should explain the methods used. It must include definitions and calculations. Also, provide clear ESG data for transparency and verification.
- You can add more details in the appendices. They may include case studies, summaries of stakeholder engagement, methodology details, or regulatory disclosures.
General vs. Framework-specific Requirements
The structure above represents common reporting practices. However, each ESG framework may have specific additional requirements:
- GRI: Broad environmental and social disclosures (GRI Standards).
- SASB: Financially material industry-specific disclosures (SASB website).
- TCFD: Climate-related financial disclosures and scenario analysis (TCFD recommendations).
- CSRD: Detailed European Sustainability Reporting Standards emphasizing double materiality (European Commission website).
To learn about visualizing Double Materiality, check out our article series on the subject.
- ISSB: Investor-focused ESG integration (IFRS website).
- CDP: Detailed disclosures on climate, water, and forestry (CDP disclosure resources).
Audit-Ready and Digital Tagging Requirements
If you're following mandatory frameworks like CSRD, your ESG report must be audit-proof. Auditors need to easily verify your data, sources, and claims. This requires clear, structured tagging of ESG information. Each disclosure should be explicitly linked to the relevant standards or frameworks.
Under CSRD, your ESG disclosures must also be digitally tagged using XBRL (eXtensible Business Reporting Language). This standardizes your data and makes it machine-readable. Moreover, it facilitates verification by auditors. Lastly it enables stakeholders to easily compare ESG data across different companies.
Ensure each ESG disclosure includes references to:
- Specific CSRD/ESRS reporting requirements
- Exact data sources
- Calculation methodologies
- Verification status and processes
- Dates and version control for documentation
Proper audit-proofing practices enhance your report’s transparency, accuracy, and usability. This significantly saves time during audits and improves stakeholder trust (Apiday).
Now that you've structured your ESG report effectively, the next step is zooming in on ESG scores that are shown in the body of the ESG Report. These scores help stakeholders quickly assess your company's ESG performance.
ESG Scores: Understanding the Numbers Behind the Story
Now that we’ve discussed the overall structure of an ESG report, let’s focus on a key part: ESG scores. These scores distill complex sustainability efforts into simplified, comparable numbers. But where do they come from, what do they mean, and how should you interpret them?
Who’s Behind ESG Ratings?
ESG scores usually come from third-party rating agencies, research firms, and data providers. Some of the most well-known include MSCI, Sustainalytics, S&P Global, and Bloomberg. These organizations evaluate companies based on publicly available information and their proprietary methodologies. Some investors and big customers also create their own scoring models to evaluate ESG performance.
Common Types of ESG Scores
There is currently no universal standard for how ESG results should be scored or presented. Companies have the flexibility to choose how they want to communicate their ESG performance. Scoring agencies each use their own methodology. As a result, the same company might receive different scores from different providers, even based on the same data.
Despite this lack of standardization, some scoring formats are more commonly used than others:
- Single-factor scores look at individual ESG metrics. Examples of areas are carbon footprint, board diversity, or energy consumption. They offer targeted insights into specific performance areas.
- Composite scores roll up multiple ESG metrics into a single score. They give a high-level overview of a company’s overall sustainability performance.
- Letter grades (like A to F) are often used to reflect ESG risk levels or maturity. Higher grades generally suggest stronger performance or lower exposure to ESG risks.
- Risk/opportunity ratings look at how exposed a company is to ESG risks. And it shows how well the company handles or takes advantage of those risks and opportunities.
It’s important to note: a higher score doesn’t always mean a better score. In some cases, a higher score may reflect a higher exposure to ESG topics and not necessarily better management. That’s why clarity and transparency are essential when sharing these numbers.
Providing Context
ESG scores are more meaningful when paired with relevant context. Without it, numbers alone can be misleading or too abstract. Readers need a frame of reference to understand what a score truly represents and how it fits into the bigger picture.
You can do this by referencing to:
- Internal sustainability goals: It can show long-term targets like net-zero emissions by 2030 or 2050. These internal benchmarks help show progress over time and commitment to long-term change.
- Industry averages: It can show how your company stacks up against peers in the same sector.
- External benchmarks: can show ESG indexes or third-party rankings. You can do this to show credibility and consistency.
- Previous reporting year: It shows comparisons with previous reporting years to highlight progress.
Showing trends over time, rather than one-off scores, helps make your ESG journey more transparent. Context helps transform scores into a story. It highlights not just where the company stands today, but where it’s headed and how it plans to improve.
Why ESG Scores Matter
ESG scores make your data digestible. They give readers a way to quickly assess how your company performs across key sustainability topics. But scores are only as valuable as the context you provide. Clearly explaining the source, methodology, and meaning behind each score makes your report more informative. Besides that, it will make your ESG Report trustworthy and actionable.
In the next chapter, we’ll explore which types of data visualizations work best for presenting ESG scores and other results. This will make your report not only clear, but also visually compelling.
Best Data Visualizations for ESG Reporting
Numbers tell the story, but visuals bring it to life. Now that we’ve explored the role of ESG scores, let’s dive into the best ways to visualize ESG performance. Effective data visualization can help clarify complex results. They can highlight key takeaways and build trust with your audience.
In this chapter, we’ll cover the most commonly used charts in ESG reporting. Moreover, we will discuss some specific topics in ESG Reporting. We will show how to visualize materiality, double materiality, and long-term sustainability targets.
Commonly Used Charts in ESG Reporting
Some charts are timeless for a reason—they communicate clearly and efficiently. Here are a few of the most popular and effective chart types for ESG reports:
- Bar charts: Ideal for comparing ESG performance across categories or over time (e.g., energy consumption per year).
- Line charts: Great for showing trends and changes over time. Examples are emissions reductions or improvements in safety metrics.
- Scatter plots: Frequently used to visualize both materiality assessments and double materiality. See the dedicated sections below for more detail on how to use them effectively.
- Pie or donut charts: Useful for illustrating compositions. For example workforce diversity by gender or age group.
- Dot plots: Allow quick comparisons across years or departments, often paired with targets.
- Bullet charts: Compact visuals that show actual performance, targets, and qualitative performance ranges in one view.
- Gauge charts: Intuitive visuals that indicate progress toward a single ESG metric (like a speedometer).
- Heatmaps: Best for showing relationships between variables or concentrations of activity, such as ESG risks across regions.
- Sunburst charts: Effective for hierarchical data, like ESG scores by topic.
Each chart type has strengths and limitations. When choosing a visualization, consider what message you want to convey and who your audience is.
Visualizing Materiality
Materiality assessments identify which ESG topics matter most to your business and stakeholders. Tables and lists are often used to present material topics. However, visualizations can make your results easier to grasp and more actionable.
The most common chart type for visualizing materiality is a scatter plot. Each topic is plotted along two axes. Typically one for relevance to stakeholders and the other for impact on the business. This allows you to clearly show which topics are considered highly material from both perspectives.
Visualizing Double Materiality
Double materiality considers two dimensions:
- Financial materiality: impact on the company
- Impact materiality: impact of the company on society or the environment.
It’s a core principle in CSRD and other emerging regulations. There are many similarities between visualizing materiality assessments and visualizing double materiality. Both use two-dimensional space to map topics and make priorities visually intuitive.
Common double materiality charts include:
- Scatter plots: Plot topics by financial vs. impact materiality. Simple and flexible.
- Matrix charts: Divide the scatter plot into zones (e.g., high/medium/low), making it easier to interpret.
- Bubble charts: Add a third dimension (e.g., stakeholder importance) through bubble size.
- Scatter plots with zones: Overlay the scatter with organic or linear background zones to show thresholds or levels.
Want a deep dive into this topic? Check out our full blog series on Visualizing Double Materiality.
Visualizing Long-Term ESG Targets
With frameworks like CSRD, companies must report on both current performance and long-term sustainability goals. That’s where visualizing progress toward targets becomes critical.
Depending on your reporting needs, the following examples of chart types work well:
- Bar charts with extra bars: Show past data alongside future targets.
- Bar charts with target lines: Add a horizontal line to benchmark performance.
- Bullet charts: Show actual vs. target plus performance zones (e.g., poor, average, good).
- Dot plots: Compact and clear for tracking progress across many goals.
- Line charts: Show trends over time and how close the organization is to reaching its goals.
- Stacked area charts or waterfall charts: Useful for showing how different initiatives contribute to a long-term goal.
For more detailed guidance and visual examples, read our article on Visualizing Long-Term ESG Targets.
Wrapping Up
Great data visualization helps bring your ESG story to life. Whether you're showing performance or future goals, the right chart makes complex information easier to understand and more meaningful to your readers.
Now that you have a better idea of how to visualize your ESG data, it’s time to put everything into practice. In the next chapter, we’ll walk you through a step-by-step guide for creating an ESG report.
Creating Your ESG Report: A Practical Step-by-Step Guide
So far, we’ve covered why ESG reporting matters, what frameworks exist, and what typically goes into a report. Now it’s time to bring it all together. This step-by-step guide walks you through the process of creating your ESG report.
Step 1: Find Out If ESG Reporting Is Required
Before you begin, check if ESG reporting is mandatory for your company. In the chapter Finding Your Way: Voluntary vs. Mandatory ESG Frameworks, we explained how to assess this based on your size, location, industry, and stakeholder demands. If you’re unsure, consult local legal experts or use official resources like EFRAG, the SEC, or CDP.
Step 2: Choose the Right Framework(s)
Based on your situation, choose the reporting framework that fits best. Some companies need to follow CSRD or TCFD. Others may choose GRI or SASB voluntarily. You can also combine multiple frameworks to meet both legal and stakeholder expectations. Clearly state your chosen frameworks early in your report—this sets the stage for everything else. We covered these frameworks earlier in the chapter Finding Your Way: Voluntary vs. Mandatory ESG Frameworks.
Step 3: Identify Material Topics
A strong ESG report focuses on what matters most. This is where a materiality assessment comes in. You'll gather feedback from both internal and external stakeholders. This includes employees, investors, customers, and local communities. Use this feedback to identify which ESG topics are most relevant.
Then, check if your chosen frameworks require additional topics to be reported. If you’re working with CSRD for example, remember that you also need to assess double materiality.
Step 4: Collect and Organize Your Data
Now it’s time to get practical. Collect data for each of your material topics—whether it’s emissions, diversity metrics, or governance policies. This might involve combining data from HR, operations, finance, and external partners.
Make sure to also document how you collected, calculated, and verified your data. This will go in the methodology section of your report.
If your ESG reporting falls under mandatory frameworks like CSRD, your data also needs to be audit-proof. To do this, clearly tag your data digitally using XBRL. XBRL tags link each ESG disclosure directly to the related reporting requirements, sources, calculation methods, verification steps, and dates. Clear tagging makes it easier for auditors to review your data and helps stakeholders trust the accuracy of your report.
Step 5: Choose the Format of Your Report
Decide how you want to publish your ESG report. Examples of options are a dedicated sustainability report, an integrated report, a section in your annual report or a web-based ESG page or microsite.
Each format has pros and cons, depending on your audience. We covered these formats earlier in the chapter How Do Companies Publish ESG Reports.
Step 6: Report the Results
This is where it all comes together. Start writing and designing your report using a mix of:
- Text: context, goals, and narratives
- Charts and data visualizations: to clearly show performance
- Illustrations and icons: to guide the reader
- Case studies: to add real-world examples
Make sure your structure follows the flow we outlined in the chapter General Structure of an ESG Report. This includes a clear intro, ESG sections, and a transparent appendix or methodology page. For tips on choosing the best data visualizations, refer back to our chapter Best Data Visualizations for ESG Reporting.
Step 7: Share and Communicate Your ESG Report
Promote your ESG report across relevant channels. This can include your website, newsletters, social media, investor meetings, and employee updates. Adjust the message so it fits the different groups you are sharing it with. Each reader, from analysts to customers, values different aspects of your ESG journey. Consider summarizing your report with infographics, slide decks, or interactive dashboards. This makes the key messages easy to understand and share.
Step 8: Analyze and Act on the Results
Once your report is published and shared, it’s time to reflect on the findings. This step is all about turning insights into meaningful actions. Analyze your performance across ESG topics and use the results to:
- Set or refine internal ESG targets
- Inform your risk management and strategy
- Update relevant policies or programs
- Launch new initiatives to close gaps in performance
Your ESG report is more than a communications tool—it’s a guide for action and continuous improvement.
Step 9: Evaluate the Reporting Process and Plan for Next Year
While Step 8 focuses on analyzing your sustainability results, this step looks inward at your reporting process. Evaluate how the process went: What worked well? Where did you face challenges? What can be done better next year? Use this internal feedback to:
- Improve collaboration between departments
- Refine your materiality assessment approach
- Strengthen your data collection and review workflows
- Enhance the clarity or layout of your report
Think of this step as the closing loop. This step ensures each year’s experience leads to a more improved, accurate, and engaging ESG report in the future.
Wrapping Up
And there you have it—the full process from start to finish. Creating an ESG report takes time and teamwork. With the right steps in place, it becomes a powerful tool for strategy, transparency, and growth.
In the next chapters, we’ll zoom out again. You’ll learn how different readers use your ESG report, explore challenges and discuss best practices. Moreover, we will show some inspiring real-world examples to improve your next reporting cycle.
How Readers Actually Use Your ESG Reports
Your ESG report isn't just a formality—it's a powerful tool for sharing your sustainability journey with your readers. Each reader group interacts with your ESG report in its own way. This shapes their decisions, perceptions, and how they connect with your company.
Investors
Investors closely analyze ESG reports to evaluate risks and opportunities related to sustainability. They want clear ESG performance metrics. This helps them assess long-term viability and make investment decisions. Clear ESG data helps investors see how well your company handles environmental, social, and governance risks.
Customers
Customers check ESG reports to guide their buying choices. They prefer brands that match their values and show real commitment to sustainability. Research by McKinsey and NielsenIQ shows that products with sustainability claims grew faster than those without. This suggests that consumers are more likely to support brands that clearly share their sustainability efforts. So good reporting can help build brand loyalty and draw in eco-friendly and socially aware consumers.
Employees
Employees look at ESG reports to understand their company's values, policies, and social responsibility. Clear ESG reporting lifts employee morale, draws in top talent, and unites everyone on sustainability goals.
Research by Deloitte shows that companies with a sustainability program have more satisfied employees, with 79% planning to stay in their jobs, compared to just 40% at companies without sustainability programs. Additionally, employees at sustainability-focused companies feel more inspired and experience a greater sense of accomplishment in their work.
Community members
Community members and NGOs use ESG reports to keep companies accountable for their sustainability efforts. They evaluate how your operations affect local communities and ecosystems. They depend on clear and reliable reports to advocate well. PwC’s ESG Toolkit for NGOs shows that NGOs want clear transparency in ESG reports. This includes not only community efforts but also details on internal operations, governance, and environmental effects. This clarity helps NGOs partner effectively and ensures alignment on sustainability goals.
Wrapping Up
When you know how different readers use your ESG report, you can make your sustainability messages more focused, meaningful, and effective.
In the next chapter, we’ll look at common challenges in ESG reporting. We’ll also share practical best practices to improve your reporting process.
Common ESG Reporting Challenges (and Practical Tips to Solve Them)
Let’s be honest—ESG reporting isn’t always easy. Even with the best intentions, many companies struggle with the process. Whether it’s figuring out what to report or collecting the right data. Or just getting started without fear of doing it wrong, there are plenty of hurdles along the way.
The good news? You’re not alone. These challenges are common and most of them can be managed with a bit of structure, transparency, and teamwork. Below, we walk you through the most frequent ESG reporting challenges. We will also offer practical tips to help you move forward with confidence.
1. Uncertainty and Fear of Doing It Wrong
One of the most common blockers is simply not knowing where to start—or being afraid to make mistakes. With so many expectations, regulations, and the risk of being called out for greenwashing, some companies hesitate or keep things too vague just to play it safe.
Tip: Be honest about where you are in the process. Nobody expects perfection. Clear communication about progress and pain points builds trust—and helps others see your commitment is real.
2. Too Many Frameworks, Too Little Clarity
GRI, CSRD, TCFD, ISSB, SASB… it’s easy to get lost in the ESG alphabet soup. Many businesses struggle to understand which frameworks apply, how to combine them, or what’s required by law versus what’s just a best practice.
Tip: Start by figuring out if ESG reporting is mandatory for your company (check CSRD or SEC rules, for example). Then choose frameworks based on what your stakeholders care about. Look for overlaps so you don’t end up duplicating work.
3. Scattered Data and No One Really in Charge
ESG data often lives in different departments—like HR, finance, and operations. And sometimes, no one really feels responsible for pulling it all together. That makes it hard to find the right data, keep it consistent, or even know where to start.
Tip: Make it clear who’s doing what. Assign one person or a small team to lead the reporting process, and ask each department to take ownership of their part. Use a shared file or system so everything stays in one place. This makes collecting data easier—and helps the whole process run more smoothly.
4. Difficulty Measuring Qualitative or Long-Term Topics
Some topics—like social impact, diversity, or future climate goals—are harder to measure than others. It can feel tricky to report on them when the data isn’t perfect, or when the impact will only become visible over time.
Tip: Don’t wait for perfect numbers. Use the data you have, explain how you’re collecting it, and be clear about what you're still working on. Combine this with storytelling or real-life examples to show progress in a relatable way.
5. Fear of Showing Weaknesses
It’s tempting to only share what’s going well. But reporting only on the good stuff can raise doubts or come across as selective. Today’s readers—and regulators—expect honesty.
Tip: Show both your strengths and the areas where you're still improving. This shows maturity and builds trust. Even small steps in the right direction are worth sharing when they’re framed with honesty and intention.
Wrapping Up
There’s no one-size-fits-all approach to ESG reporting—and that’s okay. What matters most is that you start, stay transparent, and keep improving. The challenges we’ve covered here are normal. Every company faces them in some form.
The key is not to let complexity or fear get in the way. With a solid process, the right people involved, and a mindset of progress over perfection, your ESG reporting can become more than a requirement. Your ESG Report can become a valuable tool for strategy, communication, and change.
Looking Ahead: What’s Next for ESG Reporting?
Sustainability reporting is evolving fast. What started as a voluntary effort by some forward-thinking companies is now becoming a legal requirement for many. But as ESG grows, so do the expectations—and the tensions.
1. ESG Is Becoming Politicized (Especially in the U.S.)
In the U.S., ESG has become a hot political topic. Some states and politicians are pushing back, calling ESG initiatives "woke capitalism." We’re already seeing moves to limit ESG-based investing. Also, some major companies scale back diversity, equity, and inclusion (DEI) programs.
What this means:
- ESG still matters to many investors—but some companies are getting quieter about it.
- Greenhushing (not talking about your sustainability efforts to avoid backlash) is on the rise.
- U.S. and EU approaches to ESG may continue to drift apart.
2. Europe Is Doubling Down on ESG
While ESG sparks debate in the U.S., the EU is moving full steam ahead. Through the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), Europe is setting strict requirements for what and how companies must report.
This isn’t just about checking boxes. The EU is working to make ESG reporting more structured, standardized, and embedded in everyday business. And it’s happening fast:
- 2024: CSRD applies to large companies already covered under the older NFRD rules.
- 2025: Other large EU companies must start collecting ESG data in 2025 for reports due in 2026.
- 2026–2028: The scope expands to include listed SMEs and certain non-EU companies doing significant business in the EU.
What this means:
- If you work with or within Europe, ESG reporting is no longer optional for a growing number of companies.
- Even global companies based outside the EU need to align with these expectations.
- These changes are raising the bar for ESG worldwide—especially across global supply chains.
3. Increased Scrutiny Means More Greenwashing Risks
With more regulation comes more attention. Investors, NGOs, journalists, and regulators are watching your ESG report—and they’re not just skimming.
What this means:
- Don’t just write what sounds good—prove it.
- Make sure your data is accurate, verified, and ready to be audited.
- Expect more demand for assurance tools and transparent reporting methods.
4. Technology and AI Are Reshaping Reporting
While the political debate plays out, ESG tech is charging forward. AI, automation, and new platforms are making it easier to collect, manage, and report ESG data.
What this means:
- If you start using these tools now, you’ll save time—and gain insights—later.
- Watch for more real-time dashboards, automated reporting, and smarter analytics tools.
Curious how Datylon can support your ESG reporting? Get in touch for a live demo.
5. The Rise of Social and Governance Reporting
Environmental issues used to steal the spotlight, but that’s changing. More companies are stepping up their reporting on social and governance topics. According to KPMG, reporting on social risks jumped from 49% to 74% between 2022 and 2024, and governance from 44% to 77%.
This shift is backed by new findings from S-RM. They show that companies and investors are beginning to pay closer attention to human rights, equality, diversity and inclusion (EDI), and responsible supply chains. These topics are climbing the priority list. They are driven by regulation, stakeholder expectations, and growing public awareness.
Yet many companies still feel unprepared. In S-RM’s survey, 74% said they don’t believe their ESG programs are fully mature. This may help explain why many reports are still labelled as “sustainability reports” or “environmental reports” and focus mainly on the environmental side—leaving out social and governance issues entirely. But ESG is about the full picture, not just the climate.
What this means:
- You can’t ignore areas like employee well-being, board diversity, and ethical supply chains.
- These topics are no longer “nice to have”—they’re essential.
- Covering all ESG pillars helps build trust, stay ahead of regulations, and avoid blind spots.
Wrapping Up
Despite the politics and complexity, ESG isn’t going anywhere. It’s changing, and fast. Companies that stay open, transparent, and ready to adapt will be in the best position to succeed.
Whether you’re facing regulations or just want to build a more sustainable business, now’s the time to strengthen your ESG reporting game.
Concluding Thoughts
Thanks for sticking with us through this ultimate guide to ESG reporting. We know—it’s a lot. From figuring out frameworks and collecting the right data to making sure your report is audit-ready and engaging to read, ESG reporting can feel like a challenge. But hopefully, it now feels more doable too.
Whether you’re just getting started or looking to improve your next reporting cycle, the most important thing is to approach ESG reporting with honesty, clarity, and a mindset of continuous improvement. You don’t have to be perfect. Just start where you are, be transparent about the process, and keep learning.
And if you're ever feeling stuck—come back to this guide, check out the examples, or get in touch. Because the more companies commit to meaningful ESG reporting, the more positive change we’ll see—for businesses, people, and the planet.
👉 Want expert support in designing and publishing your ESG report? Discover our ESG Report Publishing services.
Glossary
ESG – Stands for Environmental, Social, and Governance. These are three key areas companies report on to show their impact beyond just financial performance.
CSRD – Corporate Sustainability Reporting Directive. An EU regulation requiring large companies to report detailed ESG information using specific standards (called ESRS).
ESRS – European Sustainability Reporting Standards. A set of detailed reporting standards that companies under CSRD must follow.
Materiality Assessment – A process to identify which ESG topics are most important to your business and its stakeholders. It helps decide what to include in your report.
Double Materiality – A concept in CSRD that looks at two angles: how ESG topics affect your company, and how your company impacts society and the environment.
XBRL – Short for eXtensible Business Reporting Language. A digital tagging system that makes ESG data machine-readable, so it's easier to audit, compare, and analyze.
Greenwashing – Making your company look more sustainable than it really is—by exaggerating, omitting details, or presenting misleading information.
Greenwishing – When a company makes ambitious sustainability claims or goals without a clear plan to achieve them. The intention is good, but the actions don’t match.
Greenhushing – Choosing not to publicly talk about your sustainability efforts—even when they’re meaningful—out of fear of criticism or backlash.
Framework – A structured set of guidelines or standards (like GRI, CSRD, or TCFD) that helps companies decide what ESG topics to report on, and how to report them.
GRI / SASB / TCFD / ISSB / CDP – Popular ESG reporting frameworks. Some are mandatory in specific regions, others are voluntary and used to meet investor or stakeholder expectations.
Sustainability Report – A general term often used for ESG reports that focus mostly on environmental performance. Some companies publish these without fully covering the “S” and “G” aspects of ESG.
KPIs (Key Performance Indicators) – Specific metrics used to measure performance on ESG topics, like carbon emissions, board diversity, or employee turnover.
Integrated Report – A report that combines both financial and ESG information into one document, showing how a company creates value over the short and long term.
Assurance – A formal review (usually by a third party) to verify the accuracy and reliability of ESG data in your report. Often required for regulatory compliance.
Stakeholders – The people or groups affected by your business or who have an interest in it—like employees, customers, investors, regulators, and communities.
Resources/Further Readings
https://www.ibm.com/think/topics/environmental-social-and-governance
https://sites.lsa.umich.edu/mje/2025/01/10/the-future-of-esg-under-the-trump-administration/
https://thesustainableagency.com/blog/greenwashing-examples/#shell
https://carbontrail.net/blog/top-5-industry-trends-in-esg-esg-reporting-2025/
https://www.sciencedirect.com/science/article/pii/S2666791624000253
https://sustainabilitymag.com/articles/how-is-woke-capitalism-row-impacting-esg-at-major-firms
