Sustainability reporting is the process by which a company discloses its environmental, social responsibility and corporate governance (governance ESG) performance. The purpose of reporting is to be transparent about the impact of the company’s operations on people and the environment, and to show the strategies the company deploys to be sustainable and socially responsible (CSR).

The new European directive CSRD (Corporate Sustainability Reporting Directive) requires the largest companies to start sustainability reporting from 2024. Systematically, the obligation is being extended to smaller companies. The following overview shows which companies will have to report from when.

• Listed companies and financial institutions with more than 500 employees report in 2025 for the year 2024
• Other large companies exceeding at least 2 out of 3 criteria report in 2026 for the year 2025
  • 250 employees
  • €25 million total assets
  • €50 million net turnover
• Listed SMEs report in 2027 for the year 2026

Note that even non-reporting companies may still have obligations. Indeed, partners who do fall under the directive may impose requirements and require you to prepare a sustainability report. As a supplier to a large company, for example, you must be able to provide sufficient and accurate data. So it is also best for small companies to take this into account.

Sustainability reporting can feel like yet another obligation, but it can also bring some benefits to your business. In fact, a properly prepared report offers several benefits, including:

• Increased transparency and trust among customers, investors and other stakeholders.
• Better access to capital by investors looking for companies with strong ESG performance.
• Risk management by understanding the impact of environmental issues and social challenges on business operations.
• Improved reputation and competitive advantage by showing that the organisation takes sustainability seriously.
• Driving operational efficiency and cost savings by integrating sustainability into business processes.

The necessary content to comply with CSRD is defined in the ESRS standards. Besides general information, a  sustainability report must contain specific information on an organisation’s
 themes of environmental impact,  social responsibility, and governance practices.  Those themes are further divided into sub-themes:

• Environmental aspects: energy consumption,  CO₂ emissions, waste management, and water use.
• Social responsibility: working conditions, diversity and inclusion, community involvement, and human rights.
• Governance: business ethics, transparency, board composition, and regulatory compliance.

When preparing a sustainability report, you can follow the following steps:

• Assess your impact: start with a materiality analysis to identify the key sustainability themes relevant to your organisation and stakeholders. In doing so, be sure to conduct a stakeholder survey and analyse risks and opportunities internally.
• Collect data: collect data on your company’s environmental performance, social impact and governance practices.
• Set targets: define clear sustainability goals and outline the steps your company is taking to achieve them.

A sustainability report and an ESG report both focus on environmental, social and governance issues, but the difference lies in the emphasis.

• Sustainability reports are broader and often focus on the organisation’s social impact and ethical responsibility, in addition to traditional financial results.
• ESG reports focus more specifically on measurable performance indicators for environment, social responsibility, and governance, and are often used by investors to assess an organisation’s risk and value.

A materiality analysis is the process by which an organisation identifies the sustainability topics that are most relevant to its operations and its stakeholders. This helps companies focus their reporting on the areas where they have the most impact, such as CO₂ emissions, working conditions, or energy consumption. Through this analysis, companies know which topics should be prioritised in their sustainability strategy and reporting.

There are several international standards and frameworks that companies can use for their sustainability reporting. The most common are:

• Global Reporting Initiative (GRI): a widely used standard that helps organisations report their impact on the economy, the environment, and society.
• Sustainability Accounting Standards Board (SASB): focuses on financial materiality and provides sector-specific guidance on sustainability performance.
• Task Force on Climate-related Financial Disclosures (TCFD): focuses specifically on the financial impact of climate change.
• UN Sustainable Development Goals (SDGs): are often used as a reference for aligning sustainability performance with global goals.
• Science Based Targets initiative (SBTi): companies that join SBTi are committed to reducing their greenhouse gas emissions in a science-based way. The targets used are based on the Paris Agreement and are therefore in line with limiting global warming to 1.5°C.

Measuring sustainability performance can be done through various key performance indicators (KPIs) that relate to environmental, social and governance issues. These indicators should be comparable and should be drawn up with the potential growth of the company in mind. For example, a company’s total CO₂ emissions can increase year after year, while they actually decrease relatively, for example per unit produced. Examples include:

• CO₂ emissions per goods produced or service provided (environment).
• Number of training hours per employee (social).
• Number of workplace accidents per full-time equivalent per year (social)
• Number of compliance incidents or fines for regulatory violations (governance).
• Average Customer Satisfaction Survey Score (Overall)

A sustainability report is published annually, along with a company’s annual financial report. This ensures a regular update on progress towards sustainability goals and provides external stakeholders with an up-to-date view of the organisation’s environmental, social responsibility and governance performance.