ESG Reporting
Almost nine in ten large listed companies now publish some form of ESG report. Most of them use more than one framework at once, and the frameworks do not agree on what the report is for: one asks how the company affects the world, another asks how the world could affect the company’s finances.
ESG reporting is not one standard — it is a family of them, and knowing which question each one asks is most of the work.
ESG reporting is a company’s disclosure of its environmental, social and governance performance — emissions, energy, workforce, ethics — usually alongside its annual report. It follows frameworks such as GRI, the ISSB standards or the EU’s ESRS, and is mandatory in a growing number of countries.
What ESG reporting is
ESG reporting is the regular, public disclosure of how a company performs on environmental, social and governance matters. It sits beside financial reporting and answers questions the accounts do not: how much the company emits, how it treats its workers and suppliers, and how it is run.
The three letters group the topics. Environmental covers greenhouse-gas emissions, energy, water, waste, pollution and biodiversity. Social covers the workforce, health and safety, human rights in the supply chain, customers and communities. Governance covers board oversight, executive pay, ethics, anti-corruption and how sustainability is managed and controlled.
The term is used interchangeably with sustainability reporting, and the older non-financial reporting and corporate social responsibility (CSR) reporting. The labels differ in emphasis rather than substance: “ESG” grew up in the investment world, “sustainability reporting” is the term the main standards and regulations now use. Increasingly the disclosures are not a separate glossy report at all but a section of the annual report, prepared to a defined standard and checked by an auditor.
What turned ESG reporting from a voluntary communications exercise into a compliance task is regulation. The EU, Australia, Japan, California and dozens of other jurisdictions now require or are introducing standardised disclosure, the UK has published its own standards, and the numbers in an ESG report are increasingly expected to meet the same bar as the numbers in the accounts.
Definition at a glance
| What it is | Public disclosure of a company’s environmental, social and governance performance, risks and impacts |
|---|---|
| Also called | Sustainability reporting; non-financial reporting; CSR reporting |
| Main frameworks | GRI Standards (impacts), ISSB IFRS S1 and S2 (financial risks), ESRS under the EU CSRD (both) |
| Most-reported topic | Emissions — in 62% of reports that use GRI’s topic standards |
| Who reads it | Investors, lenders, regulators, customers, employees and civil society |
| Mandatory? | In a growing set of jurisdictions, for large and listed companies; voluntary elsewhere |
| Checked by | Increasingly an external auditor (assurance), as for financial statements |
How the frameworks define it
GRI Standards — impact reporting. GRI says its standards enable any organisation to “understand and report on their impacts on the economy, environment and people, in a comparable and credible way.”
IFRS S1 (ISSB) — financial reporting. Its objective is “to require an entity to disclose information about its sustainability-related risks and opportunities that is useful to primary users of general purpose financial reports in making decisions relating to providing resources to the entity.” The primary users are investors, lenders and other creditors.
UN Sustainable Development Goals — target 12.6 asks governments to “encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle”, measured by indicator 12.6.1, the “number of companies publishing sustainability reports.”
Read side by side, the first two definitions point in opposite directions. GRI looks outward: what does the company do to people and the planet? IFRS S1 looks inward: what could sustainability matters do to the company’s cash flows and cost of capital? Most of the confusion in ESG reporting comes from treating these as the same exercise. The EU’s ESRS asks both questions at once, which is why it is described as “double materiality”.
The frameworks companies actually use
GRI’s 2025 study of 14,682 large listed companies counted which frameworks their sustainability reports referenced. Companies routinely use several at once, so the shares add up to more than 100%.
Share of 14,682 large listed companies (revenue above US$250 million, 132 jurisdictions) whose reports reference each framework. Source: GRI, The State of Sustainability Reporting: Global Trends in the GRI Standards 2025, Table 1.
The mix is shifting. The ISSB standards absorbed the TCFD recommendations in 2023 and incorporate the SASB industry metrics, so those three are converging into one investor-focused baseline. ESRS shows only 10% globally because it applies to EU companies, but GRI found 55% of the EU companies it assessed already using it. The SDGs are referenced as often as GRI but are goals, not a reporting standard — see Sustainable Development Goals.
| Framework | Question it answers | Written for | Status |
|---|---|---|---|
| GRI Standards | What are the company’s impacts on the economy, environment and people? | All stakeholders | Voluntary; the most widely used worldwide |
| ISSB — IFRS S1 and S2 | Which sustainability risks and opportunities affect enterprise value? | Investors and lenders | Being adopted into law; more than 40 jurisdictions using or introducing it (March 2026) |
| ESRS under the CSRD | Both: impacts and financial effects (double materiality) | Investors and stakeholders | Mandatory for in-scope EU and non-EU companies |
| CDP | How is the company managing climate, water and forests? | Investors and customers requesting data | Voluntary questionnaire, aligned to ISSB |
| TCFD | How does the company govern and manage climate risk? | Investors | Disbanded 2023; its recommendations live on inside IFRS S2 |
What goes in an ESG report
The environmental section is where reports are most alike and most numeric. In GRI’s study, the three most-used topic standards were Emissions (in 62% of reports), Energy (61%) and Occupational Health and Safety (60%). The UN’s 2025 SDG report found the same pattern: companies most often report on emissions, energy efficiency and CO₂ equivalents.
- Environmental — scope 1, 2 and 3 emissions, energy use and mix, emission-reduction targets and a transition plan, water, waste, pollution, biodiversity.
- Social — headcount and turnover, pay gaps, health and safety incidents, training, human rights due diligence in the supply chain, product safety, community impacts.
- Governance — board composition and sustainability oversight, executive pay linked to ESG targets, ethics and anti-corruption, lobbying, data security, internal controls over the reported numbers.
Underneath the headings, most of the climate content rests on a GHG inventory built to the GHG Protocol: the same scope 1, 2 and 3 totals feed GRI 305, ESRS E1 and IFRS S2. Getting that inventory right once is the single most reusable piece of ESG reporting work.
An ESG report is only as good as its least-checked number. Regulators now treat sustainability figures the way they treat revenue — something to be prepared under a standard and assured.
Single vs double materiality
Every framework asks the company to report what is material, but they define material differently, and that one choice decides what goes in the report.
| Single (financial) materiality | Double materiality | |
|---|---|---|
| Question | Could this matter affect the company’s cash flows, finance or cost of capital? | That, and does the company have a significant impact on people or the environment? |
| Used by | ISSB (IFRS S1, S2); SASB | ESRS under the CSRD; GRI covers the impact half |
| Effect on content | Narrower: only investor-relevant topics | Wider: a topic is reported if it is material either way |
| Read more | Financial materiality | Double materiality · Impact materiality |
In practice the two converge on climate: emissions are a significant impact and, through carbon pricing, regulation and customer demand, increasingly a financial risk too. Where they diverge is on topics like biodiversity or supply-chain labour, which a company may affect heavily without — yet — any measurable effect on its own finances.
Where it is mandatory
The legal picture changes month to month. As of 1 October 2026:
| Jurisdiction | Rule | Status |
|---|---|---|
| European Union | CSRD with ESRS | Narrowed by the Omnibus I directive (published 26 February 2026): applies to companies with more than 1,000 employees and over €450 million turnover. Member states transpose by 19 March 2027. |
| Global | ISSB standards (IFRS S1, S2) | More than 40 jurisdictions have decided to use or are introducing them (IFRS Foundation, end of March 2026). |
| United Kingdom | UK SRS S1 and S2 | Published 25 February 2026, based on the ISSB standards. Listed companies report against them on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027 (FCA PS26/19, 30 September 2026). |
| California | SB 253 | Companies with revenue over $1 billion doing business in California report scope 1 and 2 emissions by 10 November 2026. |
| United States (federal) | SEC climate rule (2024) | Never in effect; the SEC proposed rescinding it on 29 May 2026. |
Smaller companies outside these thresholds are still drawn in indirectly: large reporters need scope 3 data from their suppliers, and banks increasingly ask borrowers for it. For small companies the EU has a voluntary standard, the VSME, designed to answer those requests once. The reporting framework finder shows which regimes reach a given company.
Worked micro-example
A manufacturer reports in the EU and is listed in a jurisdiction that has adopted the ISSB standards. It prepares one GHG Protocol inventory and maps each figure to every framework that asks for it. Figures are illustrative.
| Figure | Value | GRI | ESRS | IFRS S2 |
|---|---|---|---|---|
| Scope 1 | 4,200 tCO₂e | 305-1 | E1-6 | Required |
| Scope 2, location-based | 2,600 tCO₂e | 305-2 | E1-6 | Required |
| Scope 2, market-based | 900 tCO₂e | 305-2 | E1-6 | Contractual-instrument information |
| Scope 3 | 38,000 tCO₂e | 305-3 | E1-6 | Required (with transition relief) |
| Intensity per €m revenue | 89.6 tCO₂e/€m | 305-4 | E1-6 | Not required |
Intensity uses the location-based total and revenue of €500 million: (4,200 + 2,600 + 38,000) ÷ 500 = 89.6 tCO₂e per €m. The point of the table is the columns: one set of numbers, prepared once, satisfies three frameworks. Companies that build a separate spreadsheet per framework end up with three slightly different totals and an assurance problem.
Common mistakes
- Treating ESG reporting as marketing. Under the CSRD and similar rules, the disclosures sit in the management report and are assured. Unsupported claims are a greenwashing risk.
- Mixing up the materiality lens. An ISSB report built on financial materiality will not satisfy ESRS, which also requires impacts.
- Leaving out scope 3. For most companies it is the largest share of emissions, and the major frameworks require it, with phase-in reliefs.
- Running separate numbers per framework. Build one GHG Protocol inventory and map it; different totals for the same year undermine all of them.
- Citing the SDGs as a reporting standard. They are goals for countries; disclosures still need GRI, ESRS or ISSB underneath.
- Saying less to avoid scrutiny. Withholding results you have — greenhushing — does not remove regulatory duties and erodes trust.
Find out which ESG reporting rules apply to a company, then start with the materiality assessment that decides what goes in.
Frequently asked questions
ESG reporting is a company’s public disclosure of its environmental, social and governance performance — for example its greenhouse-gas emissions, energy use, workforce data, health and safety record and board oversight. It follows frameworks such as the GRI Standards, the ISSB’s IFRS S1 and S2, or the EU’s ESRS, and is mandatory for large companies in a growing number of jurisdictions.
In practice, yes. “ESG reporting” is the term used most in investment, while “sustainability reporting” is the term the main standards and regulations use, including the EU’s Corporate Sustainability Reporting Directive. Older names include non-financial reporting and CSR reporting. All describe disclosure of environmental, social and governance information.
For large companies in many jurisdictions, yes. The EU’s CSRD applies to companies with more than 1,000 employees and over €450 million turnover, more than 40 jurisdictions are adopting the ISSB standards, and California requires companies with over $1 billion in revenue to report scope 1 and 2 emissions. For smaller companies it is usually voluntary, though customers and lenders increasingly ask for the data.
Start with whatever the law requires: ESRS for in-scope EU reporters, or the ISSB-based standard where a jurisdiction has adopted it. Many companies add GRI to cover their wider impacts, since it is the most widely used framework worldwide. Whatever the mix, build one GHG Protocol emissions inventory and map it to each framework rather than preparing separate figures.
GRI reports a company’s impacts on the economy, environment and people, for all stakeholders. The ISSB standards report the sustainability-related risks and opportunities that could affect a company’s cash flows and cost of capital, for investors and lenders. Many companies use both, and the EU’s ESRS combines the two perspectives as double materiality.
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