Last updated: May 26, 2026. ESG compliance and reporting has moved from a voluntary communications exercise into a data, governance, and controls exercise. Companies may need to respond to regulation, investors, lenders, customers, suppliers, rating platforms, assurance providers, and internal management needs at the same time.
Short answer: strong ESG reporting starts with scope, materiality, governance, data owners, evidence, controls, and clear claims. Weak reporting starts with a report template and tries to backfill the numbers later. The practical do's and don'ts below are designed to help teams prepare credible sustainability disclosures without overclaiming or turning reporting into a box-ticking exercise.
This article is general guidance, not legal advice. ESG reporting requirements vary by jurisdiction, company size, sector, listing status, and customer requirements. Always confirm the rules that apply to your company before publishing or filing disclosures.
Why ESG compliance and reporting is getting harder
Companies face a more complex reporting environment than they did a few years ago. The ISSB's IFRS S1 and IFRS S2 have created a global baseline for sustainability-related financial and climate disclosures. The EU's CSRD and ESRS introduced detailed sustainability reporting built around double materiality, although the scope and timing of some EU obligations have been affected by simplification and omnibus changes. Many other jurisdictions are moving toward climate and sustainability disclosure rules. At the same time, customers are asking suppliers for emissions data, renewable electricity evidence, CDP or EcoVadis responses, reduction plans, and methodology documentation.
The result is simple: companies need reporting systems, not just reports. A good ESG report should be the output of a controlled process. It should not be the place where the company first discovers its data gaps.
Do: Start with applicability and scope
Before writing the report, confirm what you are actually preparing for. The company should know:
- which jurisdictions and reporting rules may apply;
- whether the reporting obligation is mandatory, voluntary, customer-driven, investor-driven, or internal;
- which legal entities, sites, business units, and value-chain activities are in scope;
- which reporting period is covered;
- whether the report needs board approval, audit committee review, management sign-off, or assurance;
- whether digital tagging, management report placement, or specific publication timing applies; and
- whether the output is a full sustainability report, climate disclosure, supplier response, portal submission, or management pack.
Scope discipline prevents two common problems: reporting too much irrelevant information, and missing information that a rule or customer request actually requires.
Don't: Assume last year's rule still applies
Sustainability reporting rules are changing quickly. A company should not rely on an old CSRD timetable, an outdated customer checklist, or a prior-year template without checking the current requirement. This is especially important where regulatory scope, phasing, assurance requirements, or value-chain disclosure expectations have changed.
A practical control is to keep a short reporting applicability memo each year. It should state which rules were checked, what applies, what does not apply, what is uncertain, and who approved the conclusion.
Do: Treat materiality as a decision process
Materiality is not a decorative section in the report. It determines what topics, risks, opportunities, impacts, metrics, and actions deserve attention. Depending on the framework, the company may need financial materiality, impact materiality, or double materiality.
A useful materiality process should include:
- a clear methodology;
- business-model and value-chain mapping;
- stakeholder inputs where relevant;
- risk and opportunity review;
- impact assessment;
- evidence for topic inclusion or exclusion;
- management or board review; and
- a record of changes from the prior year.
The company should be able to explain why it reported on one topic and not another.
Don't: Fill the report with immaterial content
Long reports are not automatically better reports. A sustainability report that includes every possible ESG topic can make it harder for readers to understand what matters. It can also create unnecessary claims that need evidence and future maintenance.
Cut generic content that does not help the reader understand the company's actual impacts, risks, opportunities, policies, actions, targets, or performance. If a topic is included only because it sounds good, ask whether it belongs in the report.
Do: Assign governance and ownership
ESG reporting needs clear governance. The company should define who owns the report, who owns each metric, who reviews technical calculations, who approves claims, and who signs off before publication.
Ownership often sits across the business:
- finance for revenue, spend, capex, and control alignment;
- operations for energy, fuel, waste, water, logistics, and safety data;
- HR for workforce, diversity, training, engagement, and turnover data;
- procurement for supplier and value-chain information;
- legal and compliance for regulatory and policy disclosures;
- risk for climate, enterprise risk, and controls alignment;
- facilities for building-level utility evidence; and
- communications for final report language and public claims.
Governance should be practical. A small company may not need a complex committee structure, but it still needs named owners and documented review.
Don't: Leave reporting inside one sustainability silo
If one person is chasing every number manually, the process is fragile. It also increases the risk that ESG disclosures will not reconcile with finance, HR, operations, procurement, and risk records.
Bring the relevant functions into the process early. The more the reporting process depends on core business owners, the easier it becomes to refresh the report and defend the numbers.
Do: Build the ESG data system before the report
Credible reporting depends on credible data. The company should maintain an ESG data inventory that records each metric, definition, owner, source, unit, calculation method, evidence requirement, quality rating, and reviewer.
This is where reporting becomes repeatable. A good data process lets the company answer questions such as:
- Where did this number come from?
- Which sites and entities are included?
- What period does it cover?
- What unit was used?
- Was the number measured, estimated, or calculated?
- Which assumptions were applied?
- What changed from last year?
- Who reviewed it?
For a deeper workflow, see Keslio's guide to managing ESG data.
Don't: Trust dashboards without checking the source data
ESG software and dashboards can help, but they do not automatically create reliable reporting. A polished dashboard can still contain weak definitions, duplicated data, missing sites, incorrect units, or unsupported assumptions.
Before relying on dashboard output, check the metric definitions, source files, calculation logic, access controls, review workflow, and export format. Software should support the reporting process, not replace the need for judgment and evidence.
Do: Keep evidence for every material disclosure
Every material disclosure should have an evidence trail. Evidence may include source data, invoices, HR exports, utility bills, supplier questionnaires, board minutes, policy documents, training logs, safety records, calculation workbooks, and methodology notes.
For each reporting year, keep a structured evidence folder with:
- the final report or submission;
- data request lists;
- raw source files;
- calculation files;
- methodology notes;
- assumptions and exclusions;
- review comments;
- approval records;
- claim-review notes; and
- copies of the rules, frameworks, or customer requests used to scope the work.
This evidence file is useful for internal review, assurance-readiness, customer clarification, investor due diligence, and next year's refresh.
Don't: Make claims the evidence cannot support
Greenwashing risk is now a core reporting risk. Avoid vague claims such as "sustainable", "eco-friendly", "green", "carbon neutral", or "net zero" unless the claim is specific, evidenced, qualified, and consistent with the underlying data.
A sustainability report should not hide setbacks, exclusions, uncertainty, or methodology limits. It is better to say clearly what has been measured, what has not been measured, and what will improve next year than to overstate the company's progress.
For a practical claim review, see Keslio's guide to greenwashing regulations and green-claims risk.
Do: Align climate disclosures with emissions accounting
Climate reporting is often the most technical part of ESG disclosure. If the company reports greenhouse gas emissions, it should define the boundary, reporting period, Scope 1, Scope 2, relevant Scope 3 categories, emission factor sources, renewable electricity treatment, exclusions, estimates, and restatement rules.
Climate-related disclosures should also connect emissions data to risks, opportunities, targets, transition actions, governance, and capital or operational decisions where relevant. IFRS S2, ESRS E1, customer requests, and other climate frameworks may ask for different levels of detail, but they all depend on a credible emissions-data process.
For the data side, see Keslio's guide to improving emissions data accounting.
Don't: Treat Scope 3 as optional without checking the requirement
Scope 3 emissions can be difficult, but difficulty is not the same as irrelevance. Some frameworks, customers, investors, or portals may require Scope 3 screening, category-level disclosure, supplier data, service-level accounting, or explanations of exclusions.
A practical first step is to screen the 15 Scope 3 categories for relevance, materiality, data availability, and business importance. Then improve the most important categories over time rather than trying to perfect every category at once.
Do: Prepare for assurance without overstating it
Some sustainability reports require limited or reasonable assurance. Some customer requests ask for supporting documentation, consultant input, or verification. These are not the same thing.
Internal review and consultant support can improve readiness, but independent assurance is a separate service performed by an appropriate assurance provider under assurance standards. Companies should be careful not to describe internal checks, consultant calculations, or management sign-off as independent assurance.
Assurance-readiness starts with clear scope, traceable evidence, consistent methodology, documented controls, and review records.
Don't: Wait for assurance to find the problems
If assurance is required, do not wait until the end of the reporting process to discover missing evidence or inconsistent definitions. Run pre-assurance checks while the data is still being collected.
Common pre-assurance checks include:
- does the disclosure match the reporting boundary?
- is the evidence complete for material metrics?
- are estimates marked and explained?
- do prior-year comparisons make sense?
- are restatements documented?
- are responsibilities and approvals clear?
- can a reviewer recalculate the number from source records?
Do: Connect ESG reporting to business decisions
Reporting should help the business manage risks and improve performance. Emissions data can inform energy, travel, logistics, procurement, and supplier decisions. Workforce data can inform training, retention, safety, and inclusion decisions. Governance data can highlight policy, accountability, and control gaps.
When ESG reporting is connected to decision-making, the report becomes a by-product of management discipline rather than an annual communications project.
Don't: Publish targets without a credible plan
Targets can be useful, but weak targets create credibility risk. Before publishing a target, confirm:
- the baseline year and boundary;
- the metric and unit;
- the reduction or improvement pathway;
- the actions needed to reach the target;
- who owns delivery;
- how progress will be measured;
- whether offsets or removals are involved; and
- what happens if assumptions change.
A credible target should be measurable, time-bound, evidence-backed, and connected to an implementation plan.
A practical ESG reporting checklist
Before publishing an ESG report or customer-facing sustainability disclosure, check:
- Applicability: have you confirmed which rules, frameworks, or customer requirements apply?
- Scope: are entities, sites, value-chain boundaries, and reporting period clear?
- Materiality: can you explain why each topic was included?
- Governance: are owners, reviewers, and approvers named?
- Data: are definitions, sources, units, and methods documented?
- Evidence: can material disclosures be traced back to source records?
- Claims: are sustainability claims specific, qualified, and supportable?
- Climate: are GHG emissions boundaries and methods clear?
- Assurance: is the report ready for independent review if required?
- Refresh: can the process be repeated next year without starting over?
How Keslio can help
Keslio helps companies turn ESG reporting from a last-minute document into a controlled sustainability reporting process. This can include applicability review, reporting calendars, data request templates, ESG data inventories, evidence folders, methodology notes, claim reviews, sustainability report drafting, and customer-ready response materials.
For climate disclosures, Keslio can support GHG emissions calculations. For broader reporting, Keslio provides reporting and communications support. For buyer-driven requests, Keslio can help through supplier request support.
Need help preparing ESG reporting?
If your team is preparing a sustainability report, customer ESG response, climate disclosure, or internal reporting pack, Keslio can help define the scope, organize the data, document the evidence, and prepare clearer disclosures that are easier to refresh next year.
