How to Write an ESG & Sustainability Report: A Step-by-Step Guide

An ESG report and a sustainability report are not the same document — though they are increasingly produced together, or merged into one. ESG reports are structured around environmental, social, and governance performance metrics for investor audiences. Sustainability reports, particularly those aligned with GRI, tend to be broader: stakeholder-facing, narrative-rich, and covering impacts beyond financial materiality.

What they share is the same production challenge: collecting structured data from across the organisation, aligning it with a reporting framework, making defensible decisions about what to include, and publishing a disclosure that can withstand scrutiny. This guide walks through that process from start to published report.

Step 1 — Choose Your Reporting Framework

Framework selection determines what you disclose, how you structure it, and who your primary audience is. The main options:

• GRI (Global Reporting Initiative) — the most widely used sustainability reporting standard globally. Modular structure: Universal Standards (governance, strategy, stakeholder engagement) plus Topic Standards for specific environmental, social, and economic impacts. Suitable for comprehensive stakeholder-facing sustainability reports. Uses impact materiality.
• ISSB S1 & S2 — the IFRS Sustainability Disclosure Standards. Investor-focused, financially material sustainability information. S1 covers general sustainability-related risks and opportunities; S2 focuses on climate. Adopted or being adopted by regulators in the UK, Canada, Australia, and others as the basis for mandatory disclosure.
• ESRS (European Sustainability Reporting Standards) — mandatory under CSRD for EU-regulated companies and large non-EU companies with significant EU operations. Requires double materiality assessment (both financial and impact materiality). Covers environment (E1–E5), social (S1–S4), and governance (G1).
• SASB — sector-specific standards for financially material sustainability information. Often used as a complement to ISSB or GRI to add sector relevance. 77 industry-specific standards covering the most material topics per sector.

Most companies subject to CSRD will report against ESRS. Those listed in jurisdictions adopting ISSB will need to comply with S1/S2. GRI remains the standard of choice for voluntary stakeholder-facing disclosure. The frameworks are designed to be interoperable: a CSRD-aligned report produces substantial ISSB-compatible disclosure, and GRI and ESRS have mapped their requirements to enable simultaneous reporting.

See sustainability reporting standards for a detailed comparison of each framework's scope, audience, and mandatory vs. voluntary applicability.

Step 2 — Define Your Materiality Scope

Materiality determines what you must report on. Under financial materiality (ISSB, SASB), you report topics that create or erode enterprise value — climate risk, water scarcity, labour relations in contexts where these affect financial performance. Under double materiality (GRI, ESRS), you also report on your impacts on the environment and society, regardless of whether those impacts have financial consequences for the company.

A materiality assessment involves: identifying potential sustainability topics across your value chain; evaluating significance based on impact severity and probability (for impact materiality) or financial magnitude and likelihood (for financial materiality); and engaging internal and external stakeholders to validate the assessment.

The materiality assessment output — your list of material topics — directly determines your disclosure scope. It is also the first thing assurance providers review. A poorly documented materiality process is the most common reason for audit qualifications on CSRD reports.

Step 3 — Collect Your ESG and Sustainability Data

Data collection is where most reporting programmes stall. The categories of data you need depend on your material topics, but for most companies they include:

• GHG emissions data: Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) — collected from utility invoices, fleet records, supplier questionnaires, and travel data
• Energy consumption: by source (electricity, gas, diesel, renewables) and by facility, with renewable certification documentation where claimed
• Water use and discharge: withdrawal by source, consumption, discharge quality — particularly important for water-stressed operating regions
• Waste generation and disposal: by type (hazardous/non-hazardous) and treatment method (landfill, incineration, recycling, recovery)
• Social metrics: headcount, turnover, training hours, health and safety incidents, pay equity data, supply chain labour assessments
• Governance disclosures: board composition, ESG governance structure, policy commitments, audit and risk oversight

For each data category, establish the source system, the data owner, the collection cadence, and the calculation methodology before you start. Collecting data without a methodology pre-defined means you will need to go back and recollect when auditors ask where the figure came from.

See how to make your ESG and sustainability data audit-ready for the documentation standards that support third-party verification.

Step 4 — Structure Your Report

ESG and sustainability reports share a common structure regardless of framework:

• Executive summary / highlights: key performance metrics, progress against targets, material events during the year
• Governance: board oversight of sustainability, management accountability, ESG committee structure, executive remuneration linkage
• Strategy: how sustainability connects to business strategy; significant risks and opportunities; scenario analysis (required under ISSB S2 and ESRS E1)
• Performance data: quantitative disclosures against material topics, with prior-year comparatives and targets
• Targets and commitments: specific, time-bound targets; progress update; alignment with external frameworks (SBTi, GBF, RE100)
• Appendix: GRI/ESRS/ISSB index, methodology notes, assurance statement, third-party verification scope

The ratio of narrative to data is a judgement call, but a common mistake is weighting narrative too heavily at the expense of structured, comparable data. Investors and assurance providers use the data; narrative provides context but does not substitute for metrics.

Step 5 — Review, Verify, and Publish

Internal review should involve legal (to check for misleading claims or omissions that create disclosure liability), finance (to verify the consistency of ESG data with financial reporting where applicable — particularly for CSRD's ESRS E1/ISSB S2 disclosures), and subject-matter experts for technical sections.

External assurance adds credibility, reduces litigation risk, and is mandatory for CSRD and SB 253 in-scope companies. For companies seeking voluntary assurance, limited assurance (ISAE 3000 or ISAE 3410 for GHG) is the most common starting point. Reasonable assurance — the higher standard — is typically phased in once data processes are mature.

Publication channels: most large companies publish a standalone sustainability or ESG report as a PDF, with a supporting microsite. CSRD disclosures must be published in the management report or as a distinct section of the annual report. ISSB-aligned disclosures are typically included in the annual report or integrated report.

Common Mistakes That Undermine ESG Report Credibility

• Vague targets — 'we aim to reduce emissions' without a base year, percentage target, and deadline is a credibility liability, not a commitment
• Cherry-picked data — reporting only the metrics that improved year-on-year while omitting declines is detectable and increasingly flagged by civil society and media
• No external verification — voluntary assurance costs less than a single greenwashing headline and provides an independent check on data quality
• Inconsistent boundary — reporting Scope 1+2 for one entity and Scope 1+2+3 for another without disclosing the difference
• Boilerplate governance disclosure — 'the board takes ESG seriously' without any description of the actual governance mechanisms, meeting frequency, or escalation process

The most credible ESG and sustainability reports share a characteristic: they report bad news alongside good. A declining metric with a clear explanation and a recovery plan builds far more trust than a report that only documents improvement.