The business benefits of sustainability reporting frameworks, straight from the experts
Sustainability reporting—also known as corporate citizenship, CSR, ESG, or non-financial reporting—is widely considered a best practice of companies worldwide. The reporting process—and the resulting report—has become essential for strategic decision-making, enabling stronger long-term planning, stakeholder relations, and data-driven insights. With the growing popularity of disclosure, reports are becoming more sophisticated and useful for decision makers and leaders in the company, as well as for external audiences such as investors—who are using the information to make more accurate market evaluations.
For companies with strong corporate citizenship performance, this can offer a number of benefits. Research finds that sustainability reporting results in , , .[i],[ii],[iii]
Beyond the business benefits, however, there is another important reason to report ESG metrics—it is quickly becoming a legal requirement. In Europe, the already requires large companies to prepare non-financial disclosure statements on environmental matters, social and employee-related issues, human rights, anti-corruption, and bribery. In France, non-financial reporting requirements have been the law of the land since 2015, and in Denmark, since 2009.
The United States may ultimately move in a similar direction. Last year, regarding public company disclosures, which proposed for consideration several new topics for reporting relating to sustainability issues, including climate change, resource scarcity, and other issues, such as remuneration ratios that can be indicators of good corporate citizenship. Later in the year, the to increase profit transparency for large multinational corporations. Bloomberg terminals now include a function that provides investors with data from RobecoSAM about a company’s environmental, social, and governance (ESG) performance, including greenhouse gas emissions intensity, resource consumption, and workplace diversity.
Across the board, the clear trend is toward greater transparency on both financial and non-financial dimensions. Organizations such as GRI, IR, and CDP offer frameworks for companies choosing to get ahead of this trend. Many of these reporting organizations are working to become aligned with each other and are becoming increasingly harmonized. Whether your company submits a full GRI report or simply uses one of the frameworks to guide a more informal process, these resources are essential for corporate practitioners.
Sustainability reporting is a reality of the future of this field. With it come many challenges, but also many opportunities. In the recently published , Richard Pearl, vice president and global corporate responsibility officer at State Street Corporation affirms: “External demands may always be an impetus to report on ESG factors, but the opportunities from a thorough review of the policies and programs supporting a more responsible approach to corporate citizenship should not be overlooked. In many ways, it makes the additional expense and time devoted to a strong corporate responsibility report well worth it.”
Featured Speakers:
- Simon Fischweicher, Manager, Disclosure Services, CDP
- Alyson Genovese, Head of Corporate and Stakeholder Relations for the US and Canada, GRI
- Bob Laux, North American Lead, International Integrated Reporting Council (IIRC)
Interested in a deeper dive into sustainability reporting? Consider joining us for our , , , or courses.
View all Sustainability Reporting resources on the topic page:
[i] Du, S., Yu, K., Bhattacharya, C. B., & Sen, S. (2017). The business case for sustainability reporting: Evidence from stock market reactions. Journal of Public Policy & Marketing.
[ii] Dhaliwal, D. S., Li, O. Z., Tsang, A., & Yang, Y. G. (2011). Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting. The Accounting Review, 86(1), 59-100.
[iii] EY and Boston College Center for Corporate Citizenship. (2013). Value of sustainability reporting. Boston: Boston College Center for Corporate Citizenship.