The Top Sustainability Reporting Standards in 2024

What is Sustainability Reporting?

Governments, companies, investors, and NGOs use sustainability reporting (and reports) to share and understand performance and impacts on a wide range of sustainability topics, including greenhouse gas (GHG) emissions, biodiversity impacts, materials and resource use, and supply chain sustainability. Sustainability reports are the primary way organizations publicly communicate their environmental risks, opportunities, and practices to stakeholder groups like investors, regulators, partners, employees, and customers, so each can make informed decisions.

For anyone working in sustainability, ESG, and, increasingly, corporate finance, sustainability reporting and disclosure has become the fastest-growing type of non-financial reporting over the last ten years. 96% of the largest 500 companies by market cap published a sustainability report in 2022, up from 86% in 2018. Many more companies have adopted sustainability reporting in the past two years.

Voluntary GRI Sustainability Reporting Growth (1999-2021)

Last Updated: 2021

Source: GRI (Global Reporting Initiative)

What are the Most Important Sustainability Reporting Standards?

Today, there are approximately 10-15 internationally established sustainability reporting standards. While their relative importance depends some on where your organization conducts business (or is publicly listed), generally all sustainability practitioners should be aware of the following standards:

There are also country, state, and stock-exchange specific sustainability reporting standards like Australia's upcoming climate disclosure law, sustainability reporting requirements from the Singapore, Hong Kong, and Dubai stock exchanges, California's Climate Corporate Data Accountability Act (SB 253), and the SEC's proposed rule on climate disclosure.

Why are there so Many Different Sustainability Reporting Standards?

Unlike traditional financial accounting, sustainability reporting doesn't (yet) operate with the same transparency, consistency, and interoperability. Today there are more than 600 different sustainability reporting standards, industry initiatives, frameworks, and guidelines around the world, which can make sustainability reporting a complex, research-heavy, and repetitive process. As a result, most companies follow sustainability reporting laws set out by their local government(s) where applicable, and/or voluntarily select the standards they use for reporting - and, to some extent, how they report sustainability performance.

The push for standardization is finally under way among many governments and standards orgs like CDP, GRI, EFRAG, and the IFRS Foundation's ISSB (more on these below) - which will hopefully move the industry closer to universal standards for sustainability reporting.

Selecting Sustainability Reporting Standards

For organizations, selecting which sustainability reporting standards and frameworks to use is an important early step on the path to improving your environmental performance. Generally, it's better to focus on doing a few things well instead of trying to do everything, so we recommend starting with a few established standards to prioritize. Using established, independent sustainabilty standards can help your organization set goals, establish priorities, measure performance and progress, anticipate risks, and managing change. Increasingly, many companies, including Amazon, Walmart, Nike, Disney, and Target survey their vendors and suppliers for sustainability information about their business. While most of these surveys are voluntary today, sustainability reporting standards are becoming legally mandatory in regions in the European Union.

Sustainability reporting example from Walmart. Source: Walmart

It's also important to use sustainability standards that:

The Top 7 Sustainability Reporting Standards in 2024

For organizations that are new to sustainability reporting - or looking to broaden their ESG metrics, disclosure, and target-setting - we recommend researching, learning, and considering the following seven sustainability reporting standards. Each one is globally recognized, widely adopted, thoughtfully-designed, and appears likely to evolve in future versions in a direction consistent with universal reporting standards convergence and international regulatory changes.

Each of these standards is unique, but generally covers a comprehensive set of sustainability topics and reporting themes.

By far the most comprehensive sustainability reporting standards are the European Union (EU)'s new Corporate Sustainability Reporting Directive (CSRD) requirements, which are now being implemented over the next several years. You can read the current documentation around the new EU sustainability reporting standards here.

The Importance and Benefits of Sustainability Reporting

Sustainability reporting has become increasingly important in recent years as companies and stakeholders seek to understand the social and environmental impact of business operations. By providing transparent and accurate information about a company's sustainability performance, reporting helps build trust, corporate reputation, and accountability, while also serving as a catalyst for positive change and innovation.

Why is sustainability reporting important for companies and businesses?

For companies, sustainability reporting helps demonstrate a commitment to responsible business practices. Increasingly, it serves as a competitive advantage, de-risking purchasing, procurement, and access to capital. Sustainability reporting lets companies showcase their efforts to reduce their carbon footprint, conserve resources, and achieve operational efficiencies, thereby improving corporate reputation and market trust.

Sustainability reporting can also help companies identify opportunities for operational improvements and cost savings, like reduced energy use. Moreover, sustainability helps companies attract and retain environmentally and socially conscious employees, consumers, partners, and investors.

The benefits of sustainability reporting for investors

Sustainability reporting gives investors a means to assess the environmental and social impacts, opportunities, and risks of a company and its operations. This information is critical for informed decision-making, and can help stakeholders understand the potential risks and benefits associated with investing in or doing business with a company. For investors, sustainability reporting provides valuable information that can be used to assess the long-term financial performance and ESG risk of a company. Companies that genuinely prioritize sustainability are statistically better-positioned to manage risks, reduce energy and resource-related costs, limit many types of value chain risk, and create more stable, long-term shareholder value.

The benefits of sustainability reporting for society

While sustainability reporting for the sake of reporting doesn't necessarily help companies decarbonize or become more sustainable, it does help establish awareness and baselines about a company's current sustainability performance that often serves as a catalyst for future investment. By providing information on a company's environmental performance over time, sustainability reporting encourages companies to adopt sustainability targets and circular business practices, which ultimately benefits the environment and society as a whole.

A Few Helpful Sustainability Reporting Recommendations

Your Next Steps With Sustainability Reporting

For organizations moving forward with sustainability reporting, we have a few general recommendations, additional reading, and suggested next steps:

Materiality assessment - Before picking standards or writing your first sustainability report, it’s often beneficial to conduct a “Materiality Assessment” to help determine what your sustainability goals, targets, KPIs, and reporting objectives should be. A materiality assessment is a project which determines and ranks the most material sustainability themes for your business based on stakeholder interviews and surveys. For example, a healthcare company might focus on healthcare access, affordability, sustainable innovation, and its supply chain. A technology company could focus on data privacy, security, and STEM education access. A bank might designate financial inclusion and climate finance as its most material themes. Pick and rank the right sustainability themes depending on your organization’s mission, makeup, goals, and ESG maturity.

Sustainability data systems and process - While this might go without saying, in order to report your organization's sustainability performance, you need to know what it is - with a high degree of accuracy. Your materiality process can help guide you toward the main sustainability reporting themes you may need to focus on and collect data around. Is employee travel a big source of your organization's carbon footprint? Facilities? Manufacturing sites? Where does that data exist today, and how will you access or collect it? Many organizations start their sustainability reporting with relatively simple spreadsheets, surveys, and documents, but things can get complex fast - particularly for larger organizations. If you're an organization with a medium-to-large or complex environmental footprint, you likely need dedicated sustainability reporting and data management software, like the kind we design here at Brightest. Ongoing report archiving and governance is also important to think about, since you'll be reporting every year.

Further reading - Our free guides to sustainability measurement and ESG reporting provide additional, detailed guidance and insights on how to measure and report your sustainability performance.