1. Introduction & Definition
ESG reporting is the structured disclosure of a company’s performance and policies in three areas—environmental, social, and governance, alongside traditional financial metrics. It enables stakeholders (investors, customers, regulators, and communities) to assess how an organization manages its broader impacts and risks.
2. Why It Matters
- Investor Demand: Investors seek deeper insight into long-term risks and opportunities beyond the balance sheet.
- Reputation & Trust: Transparent reporting builds brand credibility with customers, employees, and communities.
- Risk Management: Early visibility into issues (e.g., supply chain abuses, regulatory non-compliance) helps prevent reputational or financial harm.
- Innovation & Efficiency: Tracking ESG metrics often uncovers efficiency gains, new product ideas, and process improvements.
- Regulatory Compliance: Global and local rules increasingly mandate ESG disclosures (e.g., EU’s CSRD, India’s BRSR).
3. The ESG Reporting Process
3.1 Measurement: The Three Pillars
| Pillar | Key Metric | Example Data Points |
| Environmental | GHG emissions, energy use, waste, water, and biodiversity | CO₂ t/year; % renewable energy |
| Social | DEI, labour practices, health & safety, community | % female employees; injury rate |
| Governance | Board composition, exec pay, ethics, controls | % independent directors; policy count |
- Environmental: Focuses on a company’s efforts to mitigate environmental impact, co
nserve resources, and minimize pollution. GHG emissions, energy use, waste management, water stewardship, and biodiversity impact. - Social: Encompasses issues related to the organization’s workforce, customers, suppliers, and communities. including DEI (diversity, equity, inclusion), labour practices, health & safety, community engagement, and human rights.
- Governance: Relates to corporate governance structures, board composition, executive compensation, and measures to prevent unethical behaviour. Includes Board composition, executive pay, ethics policies, compliance controls, and anti-corruption measures.
3.2 Disclosure: Reports & Scores
- ESG Report: Can be a standalone sustainability report or an integrated annual report. It should include strategy & governance around ESG, quantitative performance data and qualitative narratives and targets, initiatives, and future outlook
- ESG Score is a vital metric, provided by external evaluators. It offers a concise assessment of a company’s ESG practice. These scores help investors and stakeholders gauge commitment to responsible conduct.
3.3 Frameworks & Regulations
- Mandatory (Regulatory): Mandatory frameworks are legally binding regulations that require companies to disclose ESG information according to standardised criteria, ensuring consistency, comparability, and accountability.
- India BRSR (Business Responsibility & Sustainability Report) → SEBI-mandated from FY 2022–23 for top 1,000 listed companies, aligned with NGRBC
- Voluntary (Standards Bodies): Voluntary frameworks are non-binding guidelines that organisations adopt to standardise ESG disclosures, benchmark performance, and demonstrate commitment to best practices beyond regulatory requirements. Examples include GRI (Global Reporting Initiative), TCFD (Task Force on Climate-related Financial Disclosures), and SASB (Sustainability Accounting Standards Board).
- Double Materiality: Double materiality is an approach that requires companies to report both how sustainability issues affect their financial performance (“outside-in”) and how their operations impact the environment and society (“inside-out”).
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