Sustainability Reporting: Components, Uses, and Benefits

Key takeaways

A sustainability report highlights an organization’s performance related to key sustainability metrics and evaluates progress toward long-term goals. Here are some important facts to know:

• Ninety-six percent of the world’s top 250 companies develop sustainability reports [1].

• Sustainability reports can help organizations improve efficiency, reduce costs, enhance their brand reputation, and build trust.

• You can learn about sustainable development, including ways to promote sustainability at the individual and organizational level.

Explore sustainability reporting, why it’s important, and how you can establish a framework for sustainability reporting. If you want to learn more about data analysis to help prepare sustainability reports, consider enrolling in Oxford’s The Intersection of Finance, Strategy, and Sustainability Specialization, where you’ll explore the frameworks, standards, and best practices for ESG reporting and disclosure.

What is sustainability reporting?

Businesses use sustainability reporting to track non-financial metrics related to sustainability goals in areas such as social, environmental, and governance, to communicate their impact on society, the environment, and the economy. They share these reports with stakeholders, including investors, employees, and the public, to detail their responsible and ethical business practices and identify areas for improvement. 

Ultimately, the goal of a sustainability report is to drive change by first establishing the organization’s vision and mission for achieving sustainability and then disclosing its environmental, social, and governance (ESG) goals and progress toward achieving them. Sustainability reporting encourages businesses to reduce waste, increase cost savings, enhance brand image, and identify strategies to improve long-term performance.

Why sustainability reporting is important

Sustainability reporting is important because it holds organizations accountable, ensuring they follow responsible business practices. This transparency can drive positive change and promote regulatory compliance. Sustainability reporting can highlight inefficient business practices, allowing organizations to adapt to improve efficiency and reduce costs.

Additionally, sustainability reporting may have a positive impact on an organization’s bottom line, with more than 50 percent of consumers wanting to buy products from sustainable brands [2]. Moreover, companies that adopt sustainability reporting may be more likely to attract investors, as this practice can reduce long-term operational risks and position the organization ahead of its competitors.

Is ESG and sustainability reporting the same?

While ESG and sustainability reporting share similarities, they are distinct. ESG reports measure a company’s performance against three metrics: environmental, social, and governance. These reports show investors how the company manages both risks and opportunities related to sustainability. On the other hand, sustainability reports are more holistic, highlighting a company’s corporate, social, and environmental responsibility and impact on the world. These reports extend beyond ESG metrics, considering factors such as carbon emissions, supply chain management, and sustainable development. Sustainability reports target more than just investors—they’re relevant to various stakeholders, including employees and customers.

Common sustainability reporting standards

Sustainability reporting standards guide organizations in evaluating their sustainability goals, determining their carbon footprint, and identifying risks and opportunities. Several international organizations have established sustainability reporting standards:

• Global Reporting Initiative (GRI) standards: GRI Standards represent a modular set of standards that any organization can use to develop a corporate sustainability report. These standards include Universal Standards, which focus on human rights and environmental standards, and the organization’s compliance with them. Sector Standards focus on sustainability issues for specific industries, such as oil and gas, agriculture, and mining. Finally, Topics Standards explore topic-specific sustainability issues, such as taxes and occupational safety and health, which are worth disclosing in a report. 

• International Financial Reporting Standards (IFRS) Sustainability Disclosure standards: The IFRS Sustainability Disclosure Standards help organizations identify sustainability risks and opportunities. For instance, IFRS may require organizations to identify risks related to extreme weather or opportunities arising from policy changes addressing climate change.

• International Organization for Standardization (ISO) standards: ISO produces standards on a variety of sustainability topics, helping organizations implement sustainable practices and save money and resources. These standards provide guidance on improving energy efficiency, reducing an environmental footprint, and understanding proper reporting of greenhouse gas emissions and removal. Organizations can incorporate these objectives into their sustainability reports.

What should be included in a sustainability report?

Your sustainability report should give insight into your organization’s health and its impact on the world. By disclosing key ESG data, you can give your clients and key stakeholders insight into your company’s future, which is why 96 percent of the world’s top 250 companies developed sustainability reports from 2020 to 2024 [1]. Consider including the following details in your report:

• Environmental data: Organizational data on emissions, supply chain management, water usage, and climate risks

• Social data: Findings on diversity within your organization, your community involvement, and your commitment to health and safety

• Governance data: An explanation of the board or executives responsible for overseeing sustainability and the reporting mechanisms used to collect and evaluate data

• Progress toward goals: An assessment of progress toward meeting company-established benchmarks to achieve long-term sustainability goals

Who uses sustainability reporting software?

Organizations across industries use sustainability reporting software to streamline their data collection and reporting. This software can automate many tasks using generative AI, making it easier to collect key data. By using software to collect data related to compliance, risks, safety, and sustainability, organizations can more efficiently achieve their corporate sustainability goals.

What are the benefits of sustainability reporting?

Successful sustainability reporting can help businesses improve their reputation and build the trust of their stakeholders. Additional benefits of sustainability reporting include:

• Identifying ways to improve efficiency and, in turn, reduce costs

• Opening lines of communication with shareholders and other stakeholders

• Improving business decision-making

• Encouraging accountability across the organization

• Effectively managing company risk

• Improving stakeholder engagement

Getting started with sustainability reporting

Long before you publish your first sustainability report, you’ll begin establishing the framework for successful reporting. This process involves identifying key performance indicators (KPIs) and ESG metrics to measure and building the infrastructure to track sustainability data. To achieve this, you’ll need the support of stakeholders company-wide, ranging from human resources (HR) to finance and operations. 

You’ll also need to select a sustainability reporting standard that best aligns with your industry, and you may want sustainability reporting software to help automate much of your data collection. This process can take up to two years before you publish your first report. 

Stay current with sustainability trends

Learn more about top career trends by subscribing to Career Chat on LinkedIn. For more information about topics relevant to sustainability reporting, explore these helpful resources:

• Watch on YouTube: What Is Gen AI?

• Broaden your knowledge: Using Gen AI for Data Analysis

• Hear from an expert: AI Creativity Unleashed: Expert Insights From Vanderbilt’s Dr. Jules White

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