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What Is ESG Reporting


Icons circling around ESG symbol

These days, businesses are no longer answerable only to their customers or a single owner. 

Everyone, from shareholders to clients to the larger community, demands transparency and accountability. 

It’s not enough to simply make a great product or offer a quality service. Companies need to show they’re operating ethically and sustainably, and the era of vague claims of being a “green” business are over. The clock is ticking on the climate crisis and investors and shareholders want to see quantifiable action.

To meet these expectations, many businesses are implementing Environmental, Social and Governance (or ESG) reporting programs. These programs help relay the details of everything from a company’s carbon footprint, to its metrics around diversity and inclusion, to its corporate governance and decision making. 

Putting all that information together can be a daunting task, requiring input from multiple departments, locations and sources. It involves quantifying emissions, not only from an organization’s direct business operations, but also from subsidiaries, franchises, investment portfolios, and within the value chain.

In this article we talk about what ESG reporting is, why it’s important, and how to report on ESG in a way that doesn’t take unnecessary resources from your company’s operations.

What Is ESG Reporting?

The first thing to know is what ESG reporting entails. ESG reporting involves reporting across three key areas: environment, social, and governance.


The Environmental component of ESG reporting often includes metrics around:

  • Energy efficiency
  • Climate change
  • Carbon emissions
  • Biodiversity
  • Air and water quality
  • Deforestation
  • Waste management

While companies may have some information on their direct emissions and releases, such as burning natural gas to heat the building or using pollution control technology to reduce wastewater discharges, ESG reporting frameworks also require reporting on what are called “Scope 2 and Scope 3” emissions. These are indirect emissions from sources like purchased electricity as well as emissions from the larger company supply chain.

Scope 3 emissions in particular can be difficult to quantify because they require data collection from outside parties like suppliers and customers. And if your ESG team doesn’t fully understand what constitutes a Scope 3 emission, there’s a risk of double counting what’s already been reported as a Scope 1 emission elsewhere.

But doing the work in quantifying Scope 3 emissions is important. These can often account for 50% or more of a company’s total carbon emissions, so ignoring them greatly reduces the overall effectiveness of carbon reduction efforts.

Showing you have all your environmental ducks in a row has moved beyond legal compliance. Investors want to see that businesses are taking the initiative to reduce their environmental impact.


Social reporting in ESG means companies disclose how they foster people for growth and success, and how those successes ripple out to the larger community. 

In completing their social ESG report, companies often document:

  • Gender inclusivity
  • Diversity
  • Employee engagement
  • Data protection and privacy
  • Customer satisfaction
  • Community relations
  • Human rights
  • Labor standards

The Social element of ESG reporting has picked up increased scrutiny in the last few years. The impacts of the COVID-19 pandemic has shown and will probably continue to show the many labor-related vulnerabilities in the global supply chain. 

New ESG standards and frameworks are putting increased emphasis on Social reporting to ensure company workforces—both their own as well as workers in the supply chain—are better protected and insulated from global-scale crises and disasters going forward.


The governance report looks at the reporting company’s internal operations and decision making. It considers operational controls and procedures, how companies educate themselves on regulatory changes and what they need to do to maintain legal compliance. 

In an ESG report, the governance component often includes:

  • Leadership and board composition
  • Executive compensation
  • Auditing procedures
  • Shareholder rights
  • Ethics, bribery, and corruption policies
  • Lobbying and political contributions

The governance report will also often tie back to other elements of the ESG report. For example, you may be required to identify the board member(s) or C-suite executive(s) who have actual competence relevant to environmental considerations like water stewardship or carbon emissions reduction. This is considered an indication that your company is well positioned to take meaningful action on these issues, rather than simply treating your ESG report as an accounting exercise.

Why Do ESG Reporting?

In the past, ESG reporting was voluntary in many jurisdictions, but the push for governments to commit to Net Zero pledges through the Paris Agreement means they are increasingly incorporating mandatory environmental or ESG reporting into annual compliance requirements. 

Beyond these government initiatives, companies have implemented ESG reporting frameworks for a variety of reasons, including:

  • To meet client ESG requirements. Since ESG reporting standards ask companies to provide information on the impact of their operations, including the impacts of their supply chain, to be able to provide this information, many of those upstream companies must implement their own ESG programs.
  • To manage risk. While companies always want to highlight their successes, a proactive ESG program can help identify vulnerabilities and opportunities for improvement, which are then highlighted in subsequent years’ reports. Whether you’re reducing your environmental impact or protecting your workforce, ESG reporting can help future-proof your business.
  • To court new investors. Companies looking to grow through new investment need to show they’re a good bet. A complete ESG reporting program, including several years of verifiable data and progress toward achieving targets, shows potential investors the company is committed to environmental responsibility, an equitable workplace, and transparent decision making from the top down.

Companies across all industry sectors complete ESG reports. This includes energy, automotive & transport, manufacturing, public utilities, mining & natural resources, hospitality, services, financial services, government, and technology sectors.

Are There ESG Reporting Standards?

Companies looking to implement an ESG reporting program can follow a number of ESG reporting frameworks or standards. This can lead to some confusion, since reporting is largely voluntary and following different standards may result in metrics being reported differently. 

Before undertaking ESG reporting, it’s important to familiarize yourself with the standards relevant to your industry and geographic region. While many standards provide resources across multiple sectors, others are designed for specific industries. 

There are also many frameworks that cover one part of ESG, but not others. They may focus entirely on the environmental component, without having specific disclosures for Social and Governance. This may be all you need, if your goal is to reach Net Zero carbon targets, for example, but may be insufficient if your investors are expecting a complete ESG program.

Current ESG and other sustainability reporting standards include:

  • The Global Reporting Initiative (GRI) – Probably one of the most well-known ESG standards, GRI has been in existence for 25 years and used by companies around the world. It provides a comprehensive ESG framework, along with industry-specific standards.
  • CDP – A non-profit organization dedicated to carbon, water, and forests disclosures across numerous private and public sectors. The data collected is used by investors and major corporations to make investment and purchasing decisions, and reports include a publicly-available CDP Score.
  • ISSB – Formed through consolidation of other ESG standards and boards in 2021, the ISSB sets standards for ESG reporting data for the financial services sector, similar to the way the International Accounting Standards Board sets requirements for accounting data.
  • TCFD – Similar to the CDP, the TCFD (Task Force on Climate-Related Disclosures) focuses on the climate-related information required by investors, lenders, and insurance underwriters to make informed decisions about risk. 
  • BRSR – One of the newer geographically-specific ESG standards, BRSR comes into effect in January 2023 and is applicable to the 1000 largest listed companies in India
  • CSRD – The standards under the EU’s Corporate Sustainability Reporting Directive are still being finalized, but reports will be required for the largest EU companies for the 2024 fiscal year, with other large, medium and even small businesses being phased in over the coming years.

In short, ESG reporting standards have been and continue to be an evolving alphabet soup. Identifying the relevant ones to your industry and country, as well as any relevant reporting deadlines, is the first step in an effective ESG reporting program.

How To Report on ESG?

How to do ESG reporting varies from company to company and standard to standard. 

As we’ve covered above, there are many aspects of a business’s operations that need to be investigated and documented. Ultimately, the final format is up to the reporting company, but needs to meet standard requirements. Some will be submitted through a portal like the CDP, while others are included in annual financial reports or posted publicly on corporate websites.

Collecting ESG data is not a simple undertaking. Companies need to compile utility information, environmental reports, as well as documentation on staff representation, and decision making.

Further complicating reporting, many companies need to pull data from multiple locations, from subsidiaries and portfolio companies, and even from up and down their supply chain. Information will come from operations, purchasing, finance, HR, IT and senior leadership. 

Along with written details on a company’s workforce and governance, ESG reports need to include quantified data for metrics like carbon emissions, water discharges, and waste generation. 

Depending on your ESG standard, these can be calculated using direct measurements, estimated based on operational and financial information, or using verified methodologies like industry- or process-specific emission factors.

Oftentimes, in an organization, there isn’t a natural fit for a single department or individual to spearhead ESG reporting efforts, and the reportable information can be very sensitive and not something that can be passed through multiple hands. This can be an especially challenging issue since reports often are updated annually, and organizations need the data kept in a central location that can survive employee promotions and turnover.

Where Can I Find Examples of ESG Reporting?

Finding ESG report examples is as simple as a quick Google search. 

Because some of these reports are made publicly available, you can easily find examples for companies in your jurisdiction or from similar industries without much trouble. 

However, looking for ESG report examples has some limitations. 

It can show you ways that different companies have laid out the information in their report, but what it doesn’t show is the work that went into preparing the report. In the background, there was usually a lot of number crunching and wordsmithing that a published ESG report may not show.

How Is ESG Changing?

Along with new and evolving ESG frameworks, global attitudes and priorities around ESG continue to shift. Here are a few changes to keep an eye on in the next year:

Balancing ESG and Economics 

While there is growing pressure for companies to develop ESG strategies, there is also growing pushback in these unsteady economic times. While there are growth opportunities in the medium and long term, the cuts and investments needed are hard to embrace as supply chains remain unstable and the future uncertain.

Yet action around ESG programs is needed. Companies need to find ways to streamline their reporting and implementation efforts to maximize their investment and ensure continued success.

Meeting Energy Demands Now

There is an active energy crisis in Europe that means planned and proposed changes to cleaner-burning fossil fuels and renewable energy sources may be put on hold as consumers struggle to heat their homes and businesses now

Yet those power producers already supplying power from non-fossil fuel options like renewable, nuclear, and lignite are showing growing revenues as natural gas from Ukraine is cut off.

This is a rapidly shifting landscape with no clear-cut answers. But as European regulators, power producers, and consumers struggle to balance supply and demand, progress on meeting climate goals is left in limbo.

Breaking the “Green-Hushing” Code of Silence

This year was a dramatic one when we think about ESG-related matters. Along with the ongoing impacts of the COVID-19 pandemic and energy disruptions in Europe following the Russian invasion in Ukraine, other countries and organizations are pushing back against ESG-inertia. 

For example, the island nation of Tuvalu announced it was taking steps to become a virtual country, as rising sea levels literally threaten to wash it away. This, along with the announcement following COP27 of the institution of a global fund for loss and damage, are an immediate reminder that the impacts of climate change are already being felt.

Yet all of this pressure for action is met with a growing trend of “green-hushing” where companies do not publicize their climate targets, or will not report on their progress in achieving them. Transparency is a critical part to the success of any ESG program, and organizations need to be able to do so promptly and clearly to meet their commitments.

Simplify Your ESG Reporting

ESG reporting requires a lot of information from all levels of your organization as well as from third parties. Many companies will outsource this work, but it can still be time consuming and expensive to manage consultants who will rely on your staff to pull the necessary data points for them.

FigBytes is the first fully integrated SaaS platform that bridges existing data systems, corporate ESG strategies, and internationally recognized sustainability standards. It integrates data and helps streamline all aspects of ESG reporting including:

  • Climate Accounting
  • Philanthropy
  • Diversity, Equity & Inclusion
  • Supplier Transparency
  • Water Stewardship

The result is a dynamic reporting tool with results that can be shared with employees or the public. As a cloud-based solution, it requires no on-site hardware, and can be customized to your operations. FigBytes easily populates reports with the information you need, and saves employees time, since once the integrations are in place, reporting can be updated automatically.

Your ESG reporting requirements can feel complex, but they don’t have to be. FigBytes is designed to work for reporting companies across multiple sectors, including financial services, healthcare, automotive & transport, manufacturing, technology, services, and government.

If you’re just getting started building your ESG program, or if your company has been at it for a number of years but is looking for a simpler way to manage your data, contact us today to see how FigBytes can make ESG reporting easier.

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