Companies everywhere are under pressure to show how their operations impact people and the planet. Sustainability reporting makes this visible. It explains what a business is doing to manage environmental, social, and governance (ESG) issues—backed by data that investors, regulators, and other stakeholders can trust.
Done well, sustainability reporting helps companies stay compliant, earn stakeholder confidence, and make better decisions. But it’s not always simple. The right framework, clear data, and smart use of technology make all the difference.
Why sustainability reporting is essential
Sustainability reporting is no longer just a nice-to-have—it’s quickly becoming standard business practice. Companies face a growing web of mandatory disclosure rules in jurisdictions worldwide. For example, the European Union’s Corporate Sustainability Reporting Directive (CSRD) significantly expands which businesses must publish detailed sustainability information, and similar frameworks are taking shape elsewhere.
Beyond compliance, sustainability reporting is a powerful risk management tool. By regularly collecting and analyzing ESG data, companies can pinpoint where they’re vulnerable to climate-related events, supply chain disruptions, reputational damage, or social backlash. With clear insights, leadership teams can make better decisions that protect long-term value.
Transparency is also essential for earning trust. Investors, employees, and customers increasingly demand evidence of real climate action and social responsibility. Most sustainability reports aren’t doing that (read our latest analysis on that here). However, reports that show clear progress and credible targets will stand out from the crowd and help stakeholders understand where a company is headed and build confidence that it can deliver.
Finally, reporting unlocks better internal decision-making. By turning raw operational data into insights, companies can benchmark their sustainability performance year over year, compare themselves to peers, and strengthen their sustainability compliance posture as they plan for the future.
What do sustainability reports contain?
A good sustainability report shows both what a company aims to do and what it’s actually doing. Here’s what to include:
- Governance: Who oversees sustainability? How does the board and leadership team stay accountable? Well-defined governance shows investors and regulators that sustainability is embedded in business operations, not treated as a side project.
- Environmental data: Emissions (including Scope 1, 2, and often 3), energy use, water consumption, waste management, and climate risks. Consistent, auditable data makes climate plans credible.
- Social metrics: Workforce diversity, health and safety, community engagement, and supply chain responsibility. These disclosures demonstrate a company’s broader commitment to people, not just profits.
- Strategy and targets: Long-term ESG goals and how they connect to overall business strategy and risk management plans.
- Performance benchmarks: Year-over-year progress and comparison to industry peers help show whether a company is ahead or lagging.
- Reporting standards: Clear references to frameworks used, such as CSRD, GRI, or TCFD.
Sustainability and ESG reporting frameworks
Frameworks help companies report consistently and comparably. Here’s a quick overview of the most common ones:
- CSRD (Corporate Sustainability Reporting Directive): European Union regulation that requires detailed disclosures on sustainability impacts, risks, and opportunities, using European Sustainability Reporting Standards (ESRS) and uniquely applies a double materiality lens.
- ISSB (International Sustainability Standards Board): Develops global standards focused on financially material ESG issues, aligned with investor needs.
- GRI (Global Reporting Initiative): Widely used for impact reporting—how a company affects the economy, environment, and people.
- SASB (Sustainability Accounting Standards Board): Industry-specific guidance on financially material sustainability factors.
- TCFD (Task Force on Climate-related Financial Disclosures): Recommends how to disclose climate-related risks and opportunities.
- CDP (Carbon Disclosure Project): A platform where companies disclose environmental data for investors and customers.
- UN PRI (United Nations Principles for Responsible Investment): Not a reporting standard, but a set of principles that guide investors on integrating ESG into decisions.
Most companies use a combination to meet the needs of different stakeholders.
Sustainability reporting best practices
Strong sustainability reporting follows a clear plan. Here’s how to set yours up for success:
Define a clear purpose and scope
First, decide why you’re reporting. Are you meeting regulatory requirements like CSRD? Sharing your strategy with investors? Or driving internal action? Clarifying this helps you determine what to measure and how deeply to disclose it. Next, define what the report covers: which business units, time periods, and geographies. Consistency across reports builds credibility and avoids confusion.
Collect and organize data efficiently
Sustainability data lives all over your business. HR, operations, finance, and supply chain teams all have pieces of the puzzle. Centralize this information in a shared system that stays up to date. Consider appointing a cross-functional ESG committee to keep communication smooth and responsibilities clear. Many companies now use ESG reporting tools powered by AI to automate data gathering, clean up messy datasets, and categorize information, all of which reduces manual effort and human error by extension.
Analyze and benchmark performance strategically
Data alone isn’t enough. Benchmark your performance against peers and your own past results to understand what’s working and what needs more attention. Focus your analysis on what matters most: material issues that investors and other stakeholders care about. This ensures your report remains relevant and decision-useful.
Align with reporting standards
Mapping your report to multiple frameworks helps you meet diverse stakeholder needs and stay ahead of evolving regulations. Leading companies also proactively align with new standards before they become mandatory, positioning themselves as trusted, transparent partners. Keep an eye on updates, as rules and best practices change fast. Falling behind can mean missed compliance deadlines or disclosures that don’t meet new expectations.
How AI is transforming sustainability reporting processes
Sustainability teams often spend huge amounts of time on repetitive, manual tasks like finding the right data, checking it against complex frameworks, and producing multiple reports for different stakeholders. AI for sustainability reporting can handle this heavy lift, allowing people to focus on the big picture: strategy, decisions, and action.
AI can automatically read thousands of pages of internal reports, policies, and spreadsheets, flagging missing disclosures or misalignments with standards like CSRD, ISSB, or TCFD. It can benchmark your disclosures against peers, organize vast ESG datasets, and instantly surface insights that would take teams weeks to uncover manually.
| Case study: How a large North American public company managed mounting ESG pressure A large North American public company used Manifest Climate’s platform to navigate mounting ESG pressures. They needed to meet more detailed investor demands and stay ahead of new disclosure rules. By leveraging Manifest’s AI tools, they pinpointed reporting gaps, aligned their sustainability data with CSRD and ISSB requirements, and built stronger governance processes—saving time and avoiding compliance surprises down the line. Read the full case study |
Manifest Climate’s platform uses AI trained on real climate disclosures to spot gaps, show how you stack up against industry best practice, and keep track of evolving standards, automatically mapping the same piece of information to multiple frameworks so you’re not duplicating effort. This turns ESG reporting into a continuous process rather than a once-a-year scramble.
But AI doesn’t replace human judgment. It enhances it. The real value lies in how sustainability, risk, and compliance teams utilize AI-driven insights to engage stakeholders, develop robust strategies, and guide the company toward achieving meaningful climate goals.
As sustainability disclosure rules expand and stakeholder expectations rise, AI is the only scalable way for companies to keep pace without burning out teams or risking non-compliance.
Build a stronger reporting strategy, starting with compliance
Sustainability reporting is essential, but it shouldn’t drain your time and resources. Modern AI tools take the repetitive, manual work out of reporting, so your teams can focus on building a more resilient, future-ready business.
Manifest Climate’s solution helps you stay on top of fast-changing requirements and turn reporting into an always-on advantage. Our platform:
- Maps your existing disclosures against major frameworks like CSRD, IFRS S1 and S2
- Delivers AI-driven insights and peer benchmarking to highlight strengths and gaps
The result? Less time buried in spreadsheets, more time making decisions that move the needle on climate action.
Ready to future-proof your sustainability reporting? See how Manifest Climate can help.
