Sustainability reporting

Sustainability reporting refers to the disclosure, whether voluntary, solicited, or required, of non-financial performance information to outsiders of the organization. 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).

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.

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

In the EU, the mandatory practice of sustainability reporting for certain companies is regulated by the Non-Financial Reporting Directive (NFRD), recently revised and renamed Corporate Sustainability Reporting Directive (CSRD). 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.