ESG Reporting: What it is, Why You Do It, and How to Get Started


Being a responsible business is more than just good PR.  It’s also good for your bottom line. Sustainable practices can be up to 40% more profitable than traditional ones, according to The Prince’s Accounting for Sustainability Taskforce Report 2017


But how do you know if your business is truly sustainable? One way is by measuring key environmental, social and governance (ESG) metrics through an annual ESG report.

How to define ESG for your company

Defining ESG for your company is essential to developing a successful ESG reporting framework.


To define ESG for your company, start by evaluating your current operations and identifying areas where you can improve your environmental, social, and governance practices.


Consider the impact of your business on the environment, including your carbon emissions, waste management practices, and use of natural resources.


Next, evaluate your social impact, including how your business interacts with its stakeholders, such as employees, customers, suppliers, and the wider community. This includes aspects such as diversity and inclusion, labour practices, product safety, and customer privacy.


Finally, evaluate your governance practices, including your internal policies and procedures, board structure, executive compensation, and risk management practices. Consider how these factors impact your company’s overall sustainability and ethical rules.

What is ESG reporting?

ESG reporting is a way to measure the social and environmental impact of your business. It’s part of sustainable development, where companies can be more sustainable without sacrificing growth or profits.


ESG reporting helps companies meet their sustainability goals by providing insight into how well they comply with environmental laws, operate ethically, and make decisions that will benefit customers, employees and shareholders in the long run.


It also helps companies improve their sustainability performance by using this information to guide for future decisions.

Why is ESG reporting important?

As a business leader, what is the point of ESG reporting? When incurring environmental and social costs, knowing whether the benefits justify those costs is important.


Due to the rising demand for more sustainable products and services, being aware of your impact on society will help attract consumers who expect companies to be mindful of their effects on global issues. 


By implementing a management system that allows you to assess these impacts over time, businesses can see how their actions influence their environment and society.


If they find that some practices aren’t effective or efficient enough (e.g., using excessive water in production), they can investigate new ways of doing things (e.g., reducing water consumption).

a large body of water with a factory on the horizon with a lot of smoke coming out of it.

Understanding how your company affects its employees will also help organisations improve workplace policies and management structures—which benefits everyone involved!


But how do you go about measuring these impacts? It’s important to note that ESG reporting doesn’t mean simply measuring environmental and social costs—it also means determining the value of those impacts. 


The most effective way to do this is by comparing your performance against industry standards. By benchmarking your company against similar businesses, you can identify areas where it excels and those in which it might need improvement.

How to get started with ESG reporting

ESG reporting is an excellent tool for investors, but it’s not suitable for everyone. To get started, you should clearly plan what you want to achieve and how you will go about doing it.


Before starting your report, you will also need to define your objectives and audience.  The purpose of your report can vary greatly depending on who it’s meant for, if it’s just an internal document or if it will be published online, if it is intended as an investment guide, and so on.

A birds eye view a person sitting at a table with a Samsung tablet and a printed report.

Once these considerations are made, there are several factors worth considering when choosing ESG reporting tools: data needs; ease of use; ability to deliver reports quickly; compliance with investor requirements (if applicable), etc.


One of the most common ways organisations identify, report, assess and display their ESG performance is by using management system software that encompasses their environmental controls. 


As a fully integrated management system, the Agility System has the capabilities with its built-in environmental impact module to support the environmental management system.


We can help you build a system that not only can link into your ESG dashboard to support reporting but also facilitate the integration of sustainability initiatives into your processes, the management of documentation, the maintenance of compliance, and the automation of labour-intensive routines.

How can management system software help with ESG reporting?

Our Business/Integrated Management System software (particularly the Environmental Impact module) provides important data that supports your ESG performance by giving you the following capabilities:

Monitoring and reporting

Your environmental management system should have the tools to ensure that you can keep track of and report on your ESG performance, providing you, senior management, and your colleagues with valuable insights and data as and when required.

Identifying areas for improvement

Your management system, as advocated by ISO, should follow the process approach. This will allow you to tie your ESG metrics into the core processes of your businesses, helping you easily identify areas for improvement and take action based on these findings. 


If you are unfamiliar with the process approach, we’ve covered why it is essential to quality management in this article. The same principles also apply to environmental management.

Sharing results with stakeholders

As previously mentioned, using the management system for ESG reporting not only simplifies tracking and monitoring of your performance but should also make it easier to display your results, particularly to external stakeholders, customers and auditors. 


Management system software should allow you to export all your reports and data into easy-to-read customisable dashboards that can be updated in real-time. This information gives you a more straightforward way to allow stakeholders to understand your organisation’s ESG performance.


The bottom line: Using technology to track and report on your ESG performance can help you improve your organisation’s sustainability, create value for stakeholders and reduce costs through process improvement. 

What are the challenges of ESG reporting?

Before you get too excited about the benefits of ESG reporting, it’s essential to understand that there are several challenges that come with it.


The first challenge is ensuring your staff has the knowledge and experience to compile this information. Without sufficient resources, it may be difficult or impossible for your company to collect comprehensive data on its ESG performance in a timely manner.


Another challenge is ensuring your stakeholders understand how their decisions affect social and environmental issues.


If you have employees who haven’t been trained on this topic yet, they might not understand why they should care about these issues in the first place—or even understand what their job has to do with them at all! 


This makes it difficult for them to incorporate these concerns into their everyday work habits and create long-term plans designed around sustainable business practices.

What are the benefits of ESG reporting?

There are many benefits to ESG reporting, including:


  • Improves the sustainability of your business 
  • Enhances reputation with all stakeholders 
  • Demonstrates transparency by sharing ESG performance information
  • Helps identify opportunities for improvement
  • Proven that companies that report on ESG issues outperform their peers.

If you want to be a leader in sustainability and corporate transparency, ESG reporting is a great place to start. The first step to achieving this is setting goals for the future.


Next, set up an internal structure to regularly monitor progress against these goals. Finally, develop a plan for sharing your progress with stakeholders so that they can see what you are doing and how it’s also working out for them.


If you want to be a leader in sustainability and corporate transparency, ESG reporting is a great place to start. The first step to achieving this is setting goals for the future.


Next, set up an internal structure to regularly monitor progress against these goals. Finally, develop a plan for sharing your progress with stakeholders so that they can see what you are doing and how it’s also working out for them.


Sustainability is a major focus for businesses now and will be for the foreseeable future.  With so much at stake for our planet, the benefits of ESG reporting are clear. If your company doesn’t currently have this type of reporting in place, it’s time to get started!


The Agility System software supports the gathering of data that aids ESG reporting.  Book your free demo today, and a member of our team will be in touch to discuss your business needs and help you begin your journey to a sustainable process-based approach.

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Picture of Peter Shields
Peter Shields
Peter is a Quality, Risk & Compliance expert with extensive experience working with process-based management systems in the Energy, Nuclear & Defence sectors since 1979.
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