What is ESG Reporting?

9 minutes02/24/2025

Businesses face growing pressure not just from customers or owners but also from shareholders, clients, and the broader community, all demanding greater transparency and accountability. To remain competitive and compliant, businesses must demonstrate their commitment to ethical and sustainable practices. As the climate crisis intensifies, investors expect immediate, measurable actions toward addressing environmental concerns. 

To meet these growing demands, many companies are adopting Environmental, Social, and Governance (ESG) reporting practices. These reports track performance across various domains, including carbon emissions and workplace diversity metrics, providing a clear picture of how companies are addressing their environmental and social responsibilities. 

Compiling such data can be challenging, often requiring contributions from various departments, locations, and data sources. Moreover, ESG reporting involves calculating emissions not only from direct operations but also from subsidiaries, franchises, investments, and the supply chain. 

This article breaks down ESG reporting, its importance, and how we can assist you in creating an ESG report without draining your company’s resources. 

What is ESG Reporting?

ESG reporting covers three key areas: Environmental, Social, and Governance. 

1. Environmental 

The environmental aspect of ESG reporting usually includes metrics such as: 

• Energy efficiency 
• Climate change 
• Carbon emissions 
• Biodiversity 
• Air and water quality 
• Deforestation 
• Waste management 

In addition to direct emissions (such as from building heating or wastewater management), companies must report on Scope 2 and Scope 3 emissions. Scope 2 emissions come from purchased electricity, while Scope 3 emissions come from a company’s entire value chain, including suppliers and customers. Scope 3 emissions can be especially difficult to measure but are critical, as they often represent a large portion of a company’s total emissions. 

2. Social 

The social component of ESG focuses on how a company supports its employees and its wider community. Common areas for disclosure include: 

• Gender inclusivity and diversity 
• Employee engagement 
• Data protection and privacy 
• Customer satisfaction 
• Community relations 
• Human rights and labor standards 

Recently, ESG reporting in this area has gained increased attention, especially after the COVID-19 pandemic exposed vulnerabilities in global supply chains. New frameworks emphasize the importance of protecting workers, both within the company and throughout its supply chain. 

3. Governance 

Governance reporting assesses how a company manages its internal operations, decision-making processes, and compliance with regulations. Key governance metrics include: 

• Leadership and board composition 
• Executive compensation 
• Auditing practices 
• Shareholder rights 
• Ethics, bribery, and corruption policies 
• Lobbying and political contributions 

Good governance correlates with the other ESG areas. For instance, companies with board members who have expertise in environmental issues are seen as more capable of addressing these challenges effectively. 

Why Pursue ESG Reporting?

ESG reporting has become increasingly essential. Initially voluntary in many regions, ESG reporting is now often a requirement as governments strive to meet their Net Zero commitments under the Paris Agreement. Companies have multiple reasons to adopt ESG reporting practices, including: 

• Meeting Client Expectations: Companies often need to report on supply chain impacts as part of their ESG compliance, prompting many to establish their own ESG programs. 
• Risk Management: ESG reports help identify vulnerabilities and opportunities to improve, helping businesses mitigate risks and enhance resilience. 
• Attracting Investors: Robust ESG reporting, backed by verifiable data, demonstrates a company’s commitment to sustainability, which is attractive to socially-conscious investors. 

ESG Reporting Standards

When implementing ESG reporting, businesses can choose from numerous frameworks and standards. While this variety can lead to some confusion, it’s crucial to align with the standards relevant to your industry and region. Some frameworks focus solely on environmental concerns, while others cover all three ESG aspects. Companies aiming for Net Zero carbon goals may prioritize environmental frameworks, but investors typically expect comprehensive ESG disclosures. 

Some of the most widely adopted ESG frameworks include: 

• Global Reporting Initiative (GRI) 
• Carbon Disclosure Project (CDP) 
• Task Force on Climate-related Financial Disclosures (TCFD) 
• Sustainability Accounting Standards Board (SASB) 
• International Sustainability Standards Board (ISSB) 

With so many standards and evolving guidelines, it's essential to familiarize yourself with the reporting requirements that apply to your sector and region.

How to Report on ESG Metrics

The process of compiling an ESG report varies by company and reporting framework. Gathering data from various sources — such as utilities, environmental reports, and human resources — is a complex task, often involving departments across an organization. Additionally, ESG reports must include both qualitative details (like governance policies) and quantitative data (such as carbon emissions or waste production). 

The complexity of this task means that it often doesn’t fall under a single department’s responsibility. Proper coordination is essential to ensure accuracy and protect sensitive data, and the data should be stored in a centralized system to maintain continuity and security. 

Where to Find Example ESG Reports

Samples of ESG reports are publicly available via a quick Google search and can offer insights into different reporting approaches. However, examining these reports may not provide a complete understanding of the effort required to compile the data and analysis behind them.

How ESG Reporting is Evolving

ESG reporting practices are constantly evolving, influenced by global shifts in priorities and emerging frameworks. Notable trends include: 

• Balancing ESG and Economics: While companies are under increasing pressure to adopt ESG strategies, economic instability can challenge their ability to make necessary investments. 
• Energy Uncertainty: The global energy crisis has disrupted efforts to shift toward renewable energy, complicating progress toward climate goals. 
• Green-Hushing: Some companies have opted not to publicly disclose their climate targets or progress, avoiding transparency despite global calls for action. 

Simplify Your ESG Reporting

ESG reporting requires data from various levels of an organization and external parties. Many companies choose to outsource this work, but managing consultants can still be time-consuming and costly.  

The AMCS ESG Solution (formerly Quentic) integrates data systems, ESG strategies, and sustainability standards. Our cloud-based platform streamlines the ESG reporting process by automating data collection and reporting, helping businesses save time and reduce manual effort. 

Whether you’re just starting your ESG journey or looking for a more efficient way to manage your reporting, AMCS can make the process easier and more effective. 

Reach out to us to learn how we can simplify your ESG reporting

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Quentic is now part of the AMCS Group. Learn more here.