Sustainability reporting

Sustainability reporting refers to the disclosure, whether voluntary, solicited, or required, of non-financial performance information to outsiders of the organization.[1] Sustainability reporting deals with qualitative and quantitative information concerning environmental, social, economic and governance issues. These are the criteria often gathered under the acronym ESG (environmental, social and corporate governance).[2]

The introduction of non-financial information in published reports is seen as a step forward in corporate communications and an effective way to increase corporate engagement and transparency.[3]

Sustainability reports can help companies build consumer confidence and improve corporate reputations through transparent disclosure on social responsibility programs and risk management.[4] Such communication aims to give stakeholders broader access to relevant information outside the financial sphere that also influences the company's performance.[5]

In the EU, the mandatory practice of sustainability reporting for certain companies is regulated by the Non-Financial Reporting Directive (NFRD),[6] recently revised and renamed Corporate Sustainability Reporting Directive (CSRD).[7][8] Commercial frameworks have been developed for sustainability reporting and are issuing standards or similar initiatives to guide companies in this exercise.

There is a wide range of terminology used to qualify this same concept of sustainability reporting: ESG reporting, non-financial reporting, extra-financial reporting, social reporting, CSR reporting and socio-economic and socio-environmental reporting.

  1. ^ Erkens, Michael; Paugam, Luc; Stolowy, Hervé (2015-11-18). "Non-financial information: State of the art and research perspectives based on a bibliometric study". Comptabilité Contrôle Audit. Tome 21 (3): 15–92. doi:10.3917/cca.213.0015. ISSN 1262-2788. S2CID 143001861.
  2. ^ Hardyment, Richard (2024-04-10). Measuring Good Business: Making Sense of Environmental, Social and Governance (ESG) Data. Taylor & Francis. ISBN 978-1-040-00971-0.
  3. ^ Moravcikova, K., Stefanikova, L., & Rypakova, M. (2015). CSR reporting as an important tool of CSR communication. Procedia Economics and Finance, 26, 332–338.
  4. ^ SemiColonWeb. "Sustainability Reporting". BC CCC. Retrieved 2022-03-25.
  5. ^ Arvidsson, S. (2019). Challenges in Managing Sustainable Business : Reporting, Taxation, Ethics and Governance. London : Palgrave Macmillan.
  6. ^ Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups
  7. ^ Proposal for a Directive of the European Parliament and of the Council amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting
  8. ^ "Corporate sustainability reporting - European Commission". finance.ec.europa.eu. European Commission. Retrieved 13 September 2024.