Things You Must Know about ESG Sustainability Reporting

Things You Must Know about ESG Sustainability Reporting

More companies are reporting on their environmental and social practices, which range from board diversity and greenhouse gas (GHG) to water use in their facilities. The reporting has largely been voluntary so far, but calls by stakeholders emphasizing on sustainability are changing the course. The EU is leading with new taxonomy legislation, while separate institutions/ authorities are also passing policies for sustainability reporting. 


In Hong Kong, HKEX has already indicated that all listed firms must provide comprehensive ESG reports to avoid delisting. We must say that no matter the type of business, location, or size, ESG sustainability reporting is about to become mandatory. So, if you are getting started, here are the four most important things that you need to know. 

Climate Risk Disclosure is on the Upswing

The main reason for ESG sustainability reporting is to help address the threats facing the planet. Following the Paris Agreement of 2015, all the 196 parties in COP 21 agreed to put more effort into limiting global warming to below 2 degrees Celsius the pre-industrial levels. In line with this, more companies are now reporting on climate risks. 

In the United States, over 50% of companies disclose their climate risks. The reporting companies want to demonstrate the efforts put forward in cutting down their carbon footprints. More stakeholders recommend that companies prioritize climate risks not just as a method of compliance but a duty to make the planet a better place. 

So, even if your company had prioritized other areas of ESG reporting, it would be an excellent idea to include efforts on cutting down your carbon footprint. For example, you might want to shift to new forms of energy, such as solar and hydropower, as opposed to fossil fuels. 

Increased ESG Reporting Has Raised the Demand for Data Accuracy

As you plan to start ESG sustainability reporting, appreciate that the focus is now shifting to accuracy. This shift is driven by investors’ concerns that some of the ESG reports cannot be acted on because they are inaccurate or difficult to read. So, how can you create reports that will be acceptable to stakeholders?

  • Follow the recommended process of ESG sustainability reporting. 
  • Strictly employ the ESG sustainability reporting principles. 
  • Set clear objectives with well-defined short and long-term performance indicators. 

You Need the Right ESG Sustainability Framework for Correct Reporting 

To make sustainability reporting harmonious, companies are required to follow reporting frameworks. They not only guide companies on how to report different parameters, but are also crucial for driving comparability. For example, the Global Reporting Initiative (GRI), one of the oldest frameworks, works excellently in helping companies correctly report different parameters. Other frameworks you might want to consider include: 

  • The Task Force on Climate-Related Financial Disclosures (TCFD). 
  • Carbon Disclosure Project (CDP).
  • Climate Disclosure Standards Board (CDSB).
  • International Integrated Reporting Council (IIRC).

ESG Sustainability Reporting Software for Better Reports 

One mistake that you should always avoid in ESG sustainability reporting is trying to gather data and analyze it manually. Well, it becomes pretty complex, expensive, and ultimately risks the report getting labeled greenwashed. This is why you should identify and work with a good reporting application. 

ESG sustainability reporting programs allow you to stick to the selected framework’s requirements and even automate the data gathering process. When dealing with multiple parameters, the software simplifies the process and also allows you to follow different performance indicators. If you realize that the set targets are not being met, the software can help you pinpoint the issues. Data analysis and creating the final reports is also pretty easy. 

Sustainability reporting is a new force that is redefining company operations, and from the look of things, there is no opting out. The lovely thing is that it comes with so many benefits, but you have to get the process right. This means working with the right framework and sustainability reporting software. Visit for the best ESG sustainability reporting apps and expert support. 

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like