A sustainability report should include a materiality assessment of the issues that matter most, governance and strategy for those issues, how risks are identified and managed, measurable metrics such as Scope 1, 2 and 3 greenhouse gas emissions, time-bound targets with progress, and the reporting standard used, such as GRI, IFRS S1/S2 or the EU ESRS.
Key Takeaways
- Most frameworks organise disclosures around four pillars: governance, strategy, risk management, and metrics and targets. IFRS S1 and IFRS S2 use this structure.
- A materiality assessment decides which topics the report covers; the EU rules use double materiality (how sustainability issues affect the company and how the company affects people and the environment).
- Emissions are reported in three scopes defined by the GHG Protocol: direct (Scope 1), purchased energy (Scope 2) and the wider value chain (Scope 3).
- GRI’s revised Universal Standards have applied to reporting since 1 January 2023; IFRS S1 and S2 apply to annual periods beginning on or after 1 January 2024.
- The vision, goals, implementation plan and CEO statement described below are still useful, but they need numbers, baselines and dates behind them.
Undoubtedly, businesses are becoming more aware of the issues that affect the climate. Based on this, sustainability reporting is becoming more relevant day by day. However, not many companies understand what should be part of the sustainability report.
Remember, a sustainability report is supposed to cover all areas, including your carbon footprint. Read this article to get a hint of what a sustainability report should contain. Also, you will learn more about Sustainability Reporting here.
Contents of a good sustainability report
A good sustainability report should be far-reaching and cover the key items. The five narrative items below should be part of your sustainability report; the sections further down add the data, standards and assurance that current reporting frameworks also expect.
Sustainable vision statement
To start your sustainability report is to write a vision statement. The vision statement should contain the company’s beliefs. Also, you need to outline how your organization intends to contribute to a sustainable way of doing business.
Meanwhile, your vision statement should be bold but not beyond the commercial reach of your company. Mind you, if the sustainability vision statement is beyond the capabilities of your company, investors may shy away from doing business with you.
Issues to address
Outline the climate-related and other sustainability issues that the business must address. This will show possible investors that you are aware of the need to carry out your business in an eco-friendly manner. Also, this part of the sustainability report sets the stage for other parts.
Some of the issues you may need to identify include greenhouse gas emissions, energy use, water use, plastic and other waste, and labor conditions in the supply chain. However, to get a clearer picture of climate issues to address in your business, involve key organization members like managers, supervisors, etc.
Goals and objectives
Setting out your climate sustainability goals and objectives should form part of your report. Meanwhile, sustainable climate goals should be feasible and achievable. It should be goals that your company can achieve within the time set out in your sustainability vision statement. For example, you could make ditching plastic waste one of the goals and objectives of your company.
Implementation policy
After outlining goals, you must state how to implement sustainable energy policies in your organization. You must often set up a sustainability report implementation team to carry out this function. You may outline the names of the team that are responsible for implementing the report.
Remember, the implementation policy should be feasible within what your company can do. There should be an actionable plan and not just theoretical expressions that will impress investors on paper.
CEO statement
Make sure the sustainability report includes a statement from the CEO or board chair; many reports place it at the start, before the detailed sections. With this, the investors know that the top tiers of the company have the backing of the sustainability team. Outline your vision as a CEO and specific business objectives.
Conclusion
A sustainability report is not only meant to impress investors; where reporting is mandatory, such as for companies in scope of the EU Corporate Sustainability Reporting Directive, it is also how a company meets its legal disclosure duties. Finally, you can reach out to experts to write the sustainability report. A clear, honest report can build trust with investors, customers and employees, although it does not by itself guarantee more business.
What Do the Main Reporting Standards Require?
A sustainability report is easier to compare and to trust when it follows a recognized standard. The three frameworks most companies meet are listed below, with details as of October 2026.
| Framework | Who issues it | Focus | Status |
|---|---|---|---|
| GRI Standards | Global Reporting Initiative, through the Global Sustainability Standards Board (GSSB) | A company’s impacts on the economy, environment and people, for all stakeholders | Revised Universal Standards (GRI 1, GRI 2, GRI 3) published October 2021, in effect for reporting from 1 January 2023 |
| IFRS S1 and IFRS S2 | International Sustainability Standards Board (ISSB), part of the IFRS Foundation | Sustainability-related risks and opportunities that could affect cash flows, access to finance or cost of capital, for investors | Issued June 2023; effective for annual periods beginning on or after 1 January 2024 |
| European Sustainability Reporting Standards (ESRS) | Drafted by EFRAG, adopted by the European Commission | Double materiality, for companies in scope of the CSRD | First companies reported for financial year 2024 (reports published in 2025); simplification delegated acts adopted by the Commission in July 2026 |
According to the Global Reporting Initiative, the GRI Standards are a modular system of Universal, Sector and Topic Standards used together. Under GRI 1: Foundation 2021, an organization can report “in accordance with” the Standards (the stricter option) or “with reference to” them, and both options require notifying GRI.
The Task Force on Climate-related Financial Disclosures (TCFD), whose recommendations shaped many earlier reports, disbanded when it released its 2023 status report on 12 October 2023. The Financial Stability Board asked the IFRS Foundation to take over monitoring of companies’ climate-related disclosures, and IFRS S2 is organised around the same four pillars.
The Four Core Pillars of a Sustainability Report
According to the IFRS Foundation, IFRS S1 requires a company to disclose four things about its sustainability-related risks and opportunities. These pillars work as a practical table of contents for any report.
- Governance: the processes, controls and procedures the company uses to monitor, manage and oversee sustainability matters, including who in the board and management is responsible.
- Strategy: how the company plans to manage those risks and opportunities.
- Risk management: the processes used to identify, assess, prioritise and monitor the risks.
- Metrics and targets: the company’s performance, including progress toward any targets it has set or is required to meet by law or regulation.
IFRS S2 applies the same structure to climate, covering both climate-related physical risks (such as floods and heat) and transition risks (such as new regulation or shifting demand), as well as climate-related opportunities.
How to Run a Materiality Assessment
A materiality assessment is the step that decides which issues the report covers, so it belongs near the start. Under the GRI Standards, a report covers an organization’s material topics, their impacts and how they are managed. Under the EU’s ESRS, companies apply double materiality: they report both how sustainability matters affect the company financially and how the company affects society and the environment.
- List potential topics, starting from your sector’s main impacts (for example energy, emissions, waste, water, health and safety, and human rights in the supply chain).
- Gather input from stakeholders such as employees, investors, customers, suppliers and local communities.
- Score each topic on the severity and likelihood of its impact, and on its financial effect on the business.
- Have management and the board review and approve the list of material topics.
- Explain the method and the results in the report, so readers can see why topics were included or left out.
Which Environmental Metrics Should Be Included?
Greenhouse gas emissions are the metric investors and regulators ask for most often. The GHG Protocol Corporate Standard classifies a company’s emissions into three scopes:
- Scope 1: direct emissions from sources the company owns or controls, such as its boilers and vehicles.
- Scope 2: indirect emissions from the generation of purchased energy, such as electricity.
- Scope 3: all other indirect emissions in the company’s value chain, both upstream (suppliers) and downstream (such as the use of sold products).
Alongside emissions, a typical report gives energy use, water withdrawal, waste generated and recycled, and targets for each. Every figure should state its unit, its boundary (which sites or subsidiaries are included), the reporting year and a baseline year for comparison. Collecting this data consistently is often the hardest part of reporting; our guide to ESG data management covers how to organise it.
Social and Governance Information to Include
A sustainability report is not only about climate. Most frameworks also expect information on people and on how the company is run, which is why sustainability reporting overlaps heavily with ESG. Our explainer on whether ESG and sustainability are the same thing sets out the difference.
- Workforce: headcount, health and safety incidents, training, and diversity data.
- Supply chain and human rights: how suppliers are screened and what due diligence is carried out. According to GRI, its Universal Standards incorporate reporting on human rights and environmental due diligence.
- Business conduct: anti-corruption policies, board oversight of sustainability, and any links between executive pay and sustainability targets.
Who Must Publish a Sustainability Report?
Whether reporting is mandatory depends on the country and the size of the company. In the European Union, the Corporate Sustainability Reporting Directive (CSRD) requires companies in scope to report under the ESRS. According to the European Commission, the first companies applied the rules for the 2024 financial year, in reports published in 2025.
The EU has since narrowed and delayed these rules. A “stop-the-clock” Directive, politically agreed in April 2025, postponed reporting for the companies that were due to start with financial years 2025 or 2026. In February 2025 the Commission proposed applying the CSRD only to the largest companies, those with more than 1,000 employees, and the European Parliament and the Council reached a political agreement on this Omnibus I simplification package in December 2025. Companies near the thresholds should check the final legal text and their national rules.
Outside the EU, governments are adopting the ISSB standards: as of December 2025, 39 jurisdictions had committed to or were integrating ISSB Standards into their legal and regulatory frameworks. Small businesses that are not required to report can still publish a shorter voluntary report; the European Commission issued a recommendation on a voluntary sustainability reporting standard for small and medium-sized undertakings (VSME) in July 2025.
Should a Sustainability Report Be Externally Assured?
External assurance means an independent auditor or assurance provider checks the report’s data and processes, much as a financial audit checks the accounts. Requirements differ by jurisdiction, so check the rules that apply to your company. Whether or not assurance is required, the report should state clearly which figures were assured, by whom and to what level, and which were not.
Common Mistakes to Avoid
- Vague claims: phrases such as “eco-friendly” or “carbon neutral” without data, boundaries and methods invite accusations of greenwashing.
- Leaving out Scope 3: Scope 3 covers the whole value chain, so reporting only Scopes 1 and 2 can understate a company’s footprint.
- Targets without baselines: a goal such as cutting waste by half means little without a baseline year and yearly progress.
- Only good news: missed targets should be reported with an explanation, which builds more trust than silence.
- Not naming the standard: the report should say which framework it follows and include an index that maps disclosures to it.
Sustainability Report Checklist
- CEO or board statement and the company’s sustainability vision.
- Company profile, reporting period and boundary.
- Materiality assessment and list of material topics.
- Governance: who oversees sustainability and how.
- Strategy and risk management for each material topic.
- Metrics: Scope 1, 2 and 3 emissions, energy, water, waste, workforce and supply-chain data.
- Goals and targets with baselines, deadlines and progress.
- Implementation plan and the team responsible.
- Assurance statement, if any.
- Index mapping the content to GRI, IFRS S1/S2 or ESRS.
For practical ideas to fill the goals section, see our guides to making a commercial space eco-friendly and sustainable labelling for circular packaging, and for the investor side, our explainer on ESG investing.
Frequently Asked Questions
What are the main parts of a sustainability report?
The main parts of a sustainability report are a leadership statement, a materiality assessment, governance, strategy, risk management, metrics such as Scope 1, 2 and 3 emissions, targets with progress, and an index to the reporting standard used.
What is the difference between GRI and ISSB standards?
The GRI Standards focus on a company’s impacts on the economy, environment and people and are written for a wide range of stakeholders. The ISSB’s IFRS S1 and S2 focus on sustainability risks and opportunities that could affect the company’s cash flows, access to finance or cost of capital, and are written for investors.
What does double materiality mean?
Double materiality means a company reports both how sustainability issues affect its own financial position and how its activities affect people and the environment. It is the approach used in the EU’s European Sustainability Reporting Standards.
What are Scope 1, 2 and 3 emissions?
Under the GHG Protocol, Scope 1 covers direct emissions from owned or controlled sources, Scope 2 covers indirect emissions from purchased energy, and Scope 3 covers all other indirect emissions in the value chain, upstream and downstream.
Is the TCFD still used?
The TCFD disbanded in October 2023 after fulfilling its remit, and the IFRS Foundation took over monitoring of climate-related disclosures. Its four pillars of governance, strategy, risk management, and metrics and targets carry on in IFRS S2.
Do small businesses need a sustainability report?
Small businesses are often outside mandatory reporting rules, but a short voluntary report can help when customers or lenders ask for data. In the EU, the Commission recommended a voluntary standard for small and medium-sized undertakings (VSME) in July 2025.
