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In the world of sustainability reporting we can acknowledge diverse types and names of reports, that very often are used interchangeably,

also because their scope might be overlapping. Let's define 3 mostly used types of reporting and major differences between them.

To begin from the top, we will define the whole complex subject of reporting connected with sustainability and ESG as Sustainability reporting.

This term will serve us as an umbrella for all the types of reports, including 3 main ones listed below.

They are all related, but differ in terms of their goal, their scope and type of data they use.

ESG REPORTS

ESG reporting is a quantifiable assessment of sustainability and business practices, it is very much focused around reaching certain metrics, setting goals for the future, and monitoring them over time. ESG reports require a lot of effort within the organisation (especially if done for the first time) as all the data used must be quantified and monitored over time.

The reports need to follow and meet rigorous standards requirement provided by specific reporting frameworks, e.g. GRI or SASB standards. Using such standards makes ESG reports easy to compare within industries which makes them particularly interesting for potential investors who can evaluate their investments on the basis of diverse ESG criteria (e.g. CO2 emissions or workers diversity). 

What is also very important, some companies are actually obliged to publish their ESG reports by current legislation. For example, EU's Corporate Sustainability Reporting Directive (CSDDD) came into force in January 2023, creating new European Sustainability Reporting Standards (ESRS) for around 50,000 European-operated companies, starting in 2025 (for fiscal year 2024). Therefore many companies already create their first ESG reports to meet regulatory compliance requirements and to appeal to potential investors and other stakeholders.

CSR or SUSTAINABILITY REPORTS

Corporate Social Responsibility reports (or simply CSR reports) are very often called Sustainability reports, which might be confusing with the general term of Sustainability reporting that we described above.

However, regardless of the name used, CSR reports are an assessment of qualitative measures that the company introduces to positively impact society and the environment. CSR reports do not follow a pre-defined framework, they are self-regulated by the company. Therefore they cannot be used to compare sustainability efforts of two companies within the industry. On the other hand CSR reports have an important role to build company's culture and values, as well as to boost engagement and motivation among employees, clients and other stakeholders. Therefore they are often used as an image-building tool for businesses.

In practice, CSR reports tend to be shorter than ESG reports, they are often incorporated into annual reports. As their content is more subjective in comparison to the ESG reports, it is important to build them on transparent and accurate data in order to avoid potential green-washing allegations.

IMPACT REPORTS

Impact reporting is a way to communicate to the public the benefits and effectiveness of sustainable actions taken by the company. Impact reports describe actions that the company implemented in specific areas in order to improve its social and environmental impact, together with meaningful outcomes that those actions brought.

For example, an impact report can provide information that in order to reduce the carbon footprint of its products, a company exchanged all cars in its fleet to electric ones, reducing its CO2 emissions by a specific number of tones.

Impact reports can include both qualitative and quantitative information, depending on the nature of the impact being assessed and the reporting objectives of the organization. They can serve as an important source of differentiation from other companies in the eyes of investors, clients, suppliers and potential future employees.

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