What is Sustainability Reporting? | ESG Basics

When we think about how companies communicate their performance, most people immediately think of financial reporting. Financial reporting is a standardised language that allows investors, banks, regulators, and the public to understand how a company is doing financially — and to compare one company with another on equal terms.

But businesses don’t exist in a vacuum. They operate within — and impact — a much wider world that includes society, the environment, regulation, human rights, markets, and communities. That means financial performance is only one part of the story.

This is where sustainability reporting — also called ESG reporting or non-financial reporting — comes in.

From financial reporting to ESG

Just as financial reporting communicates a company’s financial health, sustainability reporting communicates how a company impacts — and is impacted by — environmental, social, and governance (ESG) factors.

This can include:

Environmental (E) — climate impact, greenhouse gas emissions, resource use, biodiversity impacts, pollution
Social (S) — human rights, working conditions, inclusion, gender balance, fair pay, supply chain practices
Governance (G) — anti-corruption, accountability, ethical business conduct, leadership structures

Together, these elements help build a fuller picture of how a company is behaving — not only toward shareholders, but toward people, the planet and the broader economy.

Why sustainability reporting matters to investors and financial institutions

Banks and investors increasingly rely on sustainability information to understand risk and long-term resilience. A company with weak oversight of climate, human rights, labour, governance or supply-chain risk can also be exposed financially — which makes ESG data a core part of modern risk management.

This is why financial reporting and sustainability reporting must coexist: they provide two essential halves of the same picture.

Beyond investors — ESG for all stakeholders

Unlike traditional financial reporting, sustainability reporting is also designed for a much broader group of stakeholders — including employees, civil society, local communities, customers, business partners and value-chain workers. These groups both impact and are impacted by companies, meaning that transparency is key.

This is closely linked to the idea of the triple bottom line — where a company is evaluated not only on profit, but also on its impact on people and the planet.

ESG as a management tool

If sustainability is the goal — ESG is the toolkit.

A familiar phrase in ESG is:

“What gets measured gets managed.”

By measuring non-financial performance, companies are better able to manage risks, improve performance, and build long-term value.

Most ESG reporting structures can be grouped into four pillars:

Policies — Actions — Metrics — Targets

Together, these elements create a systematic approach to sustainability.

Why this matters now

Sustainability reporting has become a critical part of how companies:

• communicate transparently
• assess and manage risk
• respond to regulation
• build trust
• attract investment
• contribute to a more sustainable future

And as the world shifts toward a greener and more equitable economy, understanding ESG fundamentals is becoming an essential business skill.

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