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Definition

Sustainability Reporting

Sustainability reporting is the process of publishing evidence-backed information about a company's environmental, social, and governance impacts, risks, opportunities, policies, targets, and performance for a defined period and business boundary.

What is sustainability reporting?

Sustainability reporting turns a legal rule, listing rule, investor request, customer request, or voluntary choice into published information. A useful report states its period and boundary, meaning the entities, sites, and activities covered. It also explains the methods, evidence, targets, results, and limits behind its claims.

Why does sustainability reporting matter to you?

A regulator, exchange, investor, customer, rating platform, or parent company may ask for similar information but expect a different output. A legal duty comes from law or a listing rule. A customer request comes from a contract, invitation, or questionnaire. Treating them as interchangeable can leave the required filing or buyer response unanswered.

How does sustainability reporting work?

Start with the exact request and reporting period. Assign each disclosure to an owner, define its coverage, collect source records, document the method, review the result, and then draft. Keep an evidence trail linking every claim and number to its source, method, reviewer, and approval. If assurance, an independent check, is required, confirm its scope before collection begins.

Which reporting route applies to you?

  • Mandatory in Australia: If Australian law brings your entity into the climate-reporting regime, use the Australian Accounting Standards Board standard AASB S2.
  • Mandatory in the EU: If the Corporate Sustainability Reporting Directive (CSRD) applies to your company, use the European Sustainability Reporting Standards (ESRS). Put the applicable disclosures in a dedicated sustainability statement within the management report. ESRS 1 sets this placement in paragraph 112; paragraph 115 and Appendix D divide the statement into general, environmental, social, and governance information, with ESRS 2 supplying the general disclosures.
  • Mandatory in India: If your company is one of India's top 1,000 listed entities, use the Business Responsibility and Sustainability Report (BRSR).
  • Mandatory in Hong Kong: If your company is listed in Hong Kong, use Hong Kong Exchanges and Clearing (HKEX) Appendix C2 for its environmental, social, and governance report.
  • Customer-requested: Follow the invitation or contract rather than choosing a framework by reputation. An EcoVadis questionnaire, for example, is tailored by company size, industry, and location and uses a Reporting indicator across its sustainability themes.
  • Voluntary or investor-led: The International Sustainability Standards Board publishes IFRS S1 for sustainability-related financial risks and opportunities. IFRS S2 covers climate. They become mandatory only when a jurisdiction adopts them; the IFRS Foundation also supports voluntary use. The Global Reporting Initiative (GRI) Standards are a voluntary route for reporting a company's most significant impacts unless a contract or rule requires them.

What mistakes should you avoid?

  • Drafting before the reporting trigger, period, boundary, methods, and owners are agreed.
  • Using one polished report as a substitute for a legal filing or the customer's actual questions.
  • Publishing claims or targets without source records, a clear calculation method, and named review.

Is sustainability reporting mandatory?

Not for every company. Check the entity, jurisdiction, listing status, size tests, and reporting period against the current rule. A customer deadline may be commercially binding without creating a legal reporting duty. A board may also choose voluntary reporting. Classify the trigger before choosing the output.

How is a sustainability report different from a climate-related financial disclosure?

A sustainability report can cover environmental, social, and governance impacts and performance. A climate-related financial disclosure is narrower: it explains climate risks and opportunities that could affect cash flows, access to finance, or financing costs. It may sit inside an annual or wider report, but one does not automatically satisfy the other.

Example

Illustrative scope check: An Australian components manufacturer reports for 1 July 2026 to 30 June 2027. It is an Australian public company listed on the Australian Securities Exchange, so it prepares an annual financial report under Chapter 2M of the Corporations Act. For that financial year, its consolidated revenue is AUD 240 million; at 30 June 2027, its consolidated gross assets are AUD 620 million and it has 310 full-time-equivalent employees.

ASIC's Group 2 test applies to financial years beginning on or after 1 July 2026. An entity must meet any two of these tests: consolidated revenue above AUD 200 million, consolidated assets above AUD 500 million, or at least 250 employees. This company meets all three, so its legal output is a sustainability report with AASB S2 climate disclosures.

A major customer also sends an EcoVadis invitation, while the board asks about a GRI impact report for the same period. The finance lead classifies AASB S2 as mandatory, EcoVadis as customer-requested, and GRI as voluntary. One evidence register can support all three, but the questions and outputs remain separate.

Where it comes up

AASB S2 governance, strategy, risk management, metrics and targets disclosuresAASB S2 paragraphs 5-7, 8-23, 24-26 and 27-36ESRS sustainability statement with ESRS 2 General DisclosuresCommission Delegated Regulation (EU) 2023/2772, ESRS 1 paragraphs 111-115 and Appendix D; ESRS 2 General DisclosuresBusiness Responsibility and Sustainability Report for the top 1,000 listed entitiesSEBI LODR Regulations, regulation 34(2)(f), last amended 2026-01-22HKEX Appendix C2 Part D climate disclosures in the ESG reportHKEX Appendix C2 paragraphs 16(1) and 17(1)-(2)EcoVadis Reporting management indicator across questionnaire themesEcoVadis, Understanding my questionnaire, 'What does the questionnaire include?', Theme and Indicators paragraphs

Related terms

Materiality

Materiality is the test a company uses to decide which sustainability topics matter enough to manage or report because they could affect its finances, reflect significant impacts on people or the environment, or both.

ESG

Environmental, social and governance (ESG) groups the evidence a company provides about its environmental effects, treatment of people and business oversight when investors, customers or rating providers ask.

Carbon Accounting

Carbon accounting is the process of defining a company’s greenhouse gas inventory, collecting activity data, applying emission factors, and reporting Scope 1, Scope 2, and Scope 3 emissions on a consistent basis.

Sustainability

Sustainability is how a company manages its environmental and social impacts, governs those responsibilities, and shows customers, investors and regulators credible evidence of its decisions, actions and results.

Greenwashing

Greenwashing is a false or misleading environmental message that makes a product, service, investment, or business appear more beneficial or less harmful to the environment than the evidence supports.

BRSR (Business Responsibility and Sustainability Report)

BRSR is the annual SEBI disclosure through which India's top 1,000 listed entities report company facts, management processes, and performance against the nine National Guidelines on Responsible Business Conduct (NGRBC) principles.

Sources

Sources checked 2026-08-18

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Sustainability Reporting Definition | Keslio