10 Reasons to Track a Corporate Carbon Footprint
1 min
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In this article, we’ll explain what a corporate carbon footprint is, why it’s important, how it is measured, and reasons why your company should track it too.
The voice of impact
ESG / CSR
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MEASURE
ACT
COMFORM
What is sustainability reporting and why is it important?
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Sustainability reporting isn’t just something companies do to tick a box anymore. It’s become a key part of how businesses build trust, manage risk, and show what they stand for.
“ In fact, a recent KPMG study found that over 96% of the world’s largest 250 companies now publish sustainability reports – a sign of just how central this has become. ”
And it’s not just about keeping regulators happy. Research from McKinsey suggests that companies that take environmental, social, and governance (ESG) issues seriously often end up in a stronger position – more resilient, trusted, and ultimately, more valuable.
Still, for many businesses, sustainability reporting can feel a bit abstract. What does it really involve? What are the benefits beyond compliance? And how do you get started in a way that actually supports your wider sustainability strategy?
In this article, we’ll cover:
- What sustainability reporting is (and how it differs from ESG, CSR, and non-financial reporting)
- Why it matters – from managing risk to building trust
- Whether it’s mandatory (and where regulations are heading)
- How to choose the right reporting framework
- How to get started – step by step
Whether you're new to reporting or looking to improve your approach, this guide will help you make sense of it all.
What is sustainability reporting?
“ Sustainability reporting is about measuring and communicating how your business impacts the environment, society, and the economy. It involves collecting data on things like your carbon emissions, energy use, waste, water consumption, diversity, supply chain practices, and sharing that information in a structured way. ”
The goal? To give stakeholders, whether that’s customers, investors, employees, or regulators, a clearer picture of how your company is managing its responsibilities beyond just turning a profit.
There’s no one-size-fits-all format, but most reports follow recognised frameworks, like the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), or the newer European Sustainability Reporting Standards (ESRS). These frameworks help companies stay consistent and transparent in how they report their efforts.
“ Done well, sustainability reporting becomes a strategic tool – one that helps you understand where your biggest risks and opportunities lie, where you can improve, and how to track progress over time. ”
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How is sustainability reporting different from ESG, CSR, and non-financial reporting?
With so many overlapping terms, it’s easy to get confused. Here's how sustainability reporting fits into the bigger picture:
- Sustainability reporting is the umbrella term. It takes a broad, long-term view of how a company impacts the world – environmentally, socially, and economically. It’s stakeholder-focused, values-driven, and strategic.
- ESG reporting is often more investor-focused. It zooms in on how environmental, social, and governance issues affect a company’s financial performance and risk exposure. While ESG reporting often uses data similar to sustainability reporting, it frames that data through the lens of materiality to investors. Frameworks like SASB and TCFD/IFRS S2 are commonly used here.
- CSR reporting (Corporate Social Responsibility) is an older concept that tends to focus on philanthropy and community engagement, rather than systematic tracking of sustainability metrics. CSR reports might highlight volunteering initiatives or donations, but they’re generally less strategic or data-driven than sustainability or ESG reports.
- Non-financial reporting is the broadest term. It includes any business information that isn’t financial, from diversity policies to ethics and environmental impacts. Sustainability reporting is one type of non-financial reporting, but not all non-financial disclosures are tied to sustainability.
So while these terms overlap, their focus and audience differ:
| Term | Focus | Audience |
|---|---|---|
| Sustainability reporting | How the company impacts people, planet, and economy | Stakeholders (broad) |
| ESG reporting | How ESG factors affect company performance and risk | Investors, financial analysts |
| CSR reporting | Company-led social/environmental initiatives | Public, consumers |
| Non-financial reporting | Any business info that isn’t financial (incl. sustainability) | Regulators, stakeholders |
Many companies combine elements from each, depending on who they’re reporting to and what they want to communicate.
What are the benefits of sustainability reporting?
“ Sustainability reporting has become a key part of business strategy – not just for meeting regulations, but because it enables companies to understand risks, improve performance, and build trust with stakeholders. It helps companies turn data into action, whether that’s cutting emissions, identifying inefficiencies, or showing stakeholders they’re serious about long-term impact. ”
Here are some of the key ways it creates value:
1. Enhances risk management
Sustainability is closely tied to long-term resilience. With climate change, resource scarcity, and social pressures creating real risks for business, sustainability reporting helps companies identify those risks early and prepare for them.
According to the Carbon Disclosure Project (CDP), 52% of companies disclosed climate-related risks with potential for significant financial or strategic impact. At the same time, 63% identified opportunities linked to climate action, highlighting how sustainability reporting can surface both challenges and areas for growth.
2. Drives efficiency and cost savings
By tracking resource use, emissions, and waste, businesses can pinpoint inefficiencies and fix them. Sustainability reporting often uncovers areas for improvement that lead to reduced operational costs, especially when integrated with energy-saving initiatives or smarter procurement practices.
A McKinsey study found that companies combining emissions reduction with cost controls achieved up to a 40% emissions cut and a 15% boost in financial performance.
3. Supports better decision-making
With growing pressure from regulators, customers, and investors, businesses are making more complex decisions under greater scrutiny. A robust sustainability report offers a clearer view of performance and future risk, providing the insights needed to guide your long term management strategy, sustainability priorities, and broader business decisions.
It also helps companies prepare for tightening regulations. For example, climate-related disclosures are now mandatory in many regions, and those who already have structured reporting processes in place are better positioned to comply.
4. Builds stakeholder trust
Transparency is now expected, not optional. Customers, employees, investors, and business partners increasingly want to support companies that align with their values.
Sustainability reporting gives companies a way to show, not just say, what they stand for. It provides proof of action on issues like climate change, diversity, and ethical sourcing. According to the Edelman Trust Barometer, 88% of institutional investors say companies prioritising ESG initiatives are better long-term bets.
Key benefits of sustainability reporting:
| Benefit | Impact |
|---|---|
| Risk management | Identifies emerging risks and helps future-proof the business |
| Cost optimisation | Reveals inefficiencies and drives resource savings |
| Strategic clarity | Supports long-term decision-making and regulatory compliance |
| Investor appeal | Aligns with ESG expectations and attracts sustainable finance |
| Brand differentiation | Helps build a more credible, trusted reputation |
| Stakeholder engagement | Strengthens relationships with customers, employees, and business partners |
What is a sustainability reporting framework?
“ A sustainability reporting framework is a structured set of guidelines that helps companies decide what to report, how to measure it, and how to clearly and consistently report sustainability related information to stakeholders. ”
Think of it as a blueprint; it doesn’t dictate your goals or strategies, but it gives you the tools to communicate them in a way that’s meaningful to your audience. Frameworks help ground your commitments in credible data and align your disclosures with global expectations.
Some frameworks are broad and stakeholder-focused, while others are designed specifically for investors or regulators. Depending on your objectives, you might use just one or combine several to meet different needs.
Here’s a look at the most widely used sustainability reporting frameworks and what they offer:
| Framework | Focus | Best for | Key features |
|---|---|---|---|
| GRI (Global Reporting Initiative) | Broad ESG impact across environmental, social, and governance topics | Stakeholder communication, overall transparency | Covers a wide range of sustainability topics; widely adopted; aligns with SDGs |
| SASB (Sustainability Accounting Standards Board) | Financially material ESG issues by industry | Investor-focused reporting | Industry-specific metrics, focused on financially material sustainability performance and impact on the company |
| TCFD / IFRS S2 (Task Force on Climate-related Financial Disclosures) | Climate-related risks and opportunities | Climate disclosure and risk management | Developed by the International Sustainability Standards Board (ISSB); focuses on governance, strategy, risk management, and metrics; adopted into IFRS |
| CDP (Carbon Disclosure Project) | Climate, water, and forest impact disclosures | Benchmarking environmental performance | Questionnaire-based; aligned with TCFD; includes scoring system |
| IIRC (International Integrated Reporting Council) | Integrated reporting of financial and non-financial performance | Communicating long-term value creation | Emphasises connectivity between ESG and financial data |
| CSRD (Corporate Sustainability Reporting Directive) | Mandatory ESG disclosures in the EU | EU-based or EU-operating companies | Requires audited, standardised sustainability disclosures aligned with ESRS |
| ISO 26000 | Social responsibility and ethical behaviour | Voluntary guidance for CSR integration | Covers topics like human rights, labour, and governance |
| UN Global Compact / SDG reporting | Alignment with the UN’s Sustainable Development Goals | Companies committed to global responsibility | Encourages transparency across 10 principles of the UNGC |
How to choose the right sustainability reporting framework
You don’t need to follow every framework, just the ones that make sense for your business. The right fit depends on your goals, stakeholders, and reporting requirements, whether driven by regulation or internal strategy.
Here are a few things to consider:
- Your audience: For investors, use frameworks like SASB or TCFD/IFRS S2. For broader transparency, GRI is a strong choice.
- Regulatory requirements: If you're operating in the EU, the CSRD may apply. Other regions may require climate disclosures under frameworks like CDP or IFRS.
- Business priorities: Focus on frameworks that align with the topics most relevant to your impact, whether that’s climate, social issues, or governance.
- Reporting maturity: New to reporting? Start with one flexible framework (like GRI) and build from there.
Choose the frameworks that help you stay compliant, communicate clearly, and keep your reporting focused on what matters most.
Is sustainability reporting mandatory?
Whether sustainability reporting is mandatory depends on where your business operates, your industry, and your size.
In some regions, particularly the EU, reporting is no longer optional. Under the Corporate Sustainability Reporting Directive (CSRD), thousands of companies are now required to disclose detailed sustainability information.
Other jurisdictions are following suit – the UK has introduced mandatory climate-related financial disclosures for large companies, and the US is rolling out stricter SEC rules for listed firms.
“ Even in places where it isn’t yet legally required, there’s growing pressure from investors, customers, and employees for businesses to be transparent about their environmental and social impact. In practice, many companies are choosing to report voluntarily, either to stay ahead of regulation or meet stakeholder expectations. ”
Sustainability reporting in the United States
In the United States, sustainability reporting is becoming increasingly important, driven by a combination of regulatory requirements, investor expectations, and market trends.
Here’s a look at what companies operating in the US need to know about sustainability reporting:
Regulatory landscape
While the US does not yet have a comprehensive federal mandate for sustainability reporting akin to the European Union's Corporate Sustainability Reporting Directive (CSRD), several regulations and guidelines encourage or require disclosure of certain sustainability-related information:
- Securities and Exchange Commission (SEC): The SEC has proposed new rules to enhance and standardize climate-related disclosures for investors. These proposed rules would require publicly traded companies to disclose information about their greenhouse gas emissions, climate-related risks, and governance of climate-related risks.
- Environmental Protection Agency (EPA): The EPA provides guidelines for reporting on various environmental factors, including greenhouse gas emissions and pollution levels, which many companies include in their sustainability reports.
- State-Level Initiatives: Some states, like California, have enacted more stringent environmental regulations that indirectly affect corporate sustainability reporting. Companies operating in these states must adhere to state-specific requirements that often exceed federal regulations.
Investor expectations
US investors are increasingly factoring sustainability into their decision-making processes. Asset managers and institutional investors are pushing for greater transparency and standardized reporting on ESG factors. Key initiatives include:
- Principles for Responsible Investment (PRI): Many US-based investors are signatories to the PRI, which encourages the incorporation of ESG issues into investment practice.
- Sustainable Accounting Standards Board (SASB): SASB provides industry-specific standards that guide companies on what sustainability information is most material to investors. Adopting SASB standards can help companies meet investor expectations and improve their attractiveness to sustainability-focused investors.
Market trends
The US market is witnessing a growing demand for sustainable business practices. Consumers, particularly younger demographics, are more likely to support companies with strong sustainability credentials. This trend is pushing companies to adopt and report on sustainable practices to maintain market competitiveness.
Voluntary frameworks and standards
Many US companies voluntarily adopt international sustainability reporting frameworks to align with global best practices and meet stakeholder demands. The most commonly adopted frameworks in the US include:
- Global Reporting Initiative (GRI): GRI standards are widely used by US companies to report on a broad range of ESG issues.
- Task Force on Climate-related Financial Disclosures (TCFD): The TCFD framework is gaining traction in the US for its focus on climate-related financial risks and opportunities.
- Carbon Disclosure Project (CDP): Many US companies report to CDP to disclose their environmental impacts and management strategies.
How to get started with sustainability reporting
Getting started with sustainability reporting doesn’t have to be overwhelming. By breaking the process into a few clear steps – from identifying what matters most to choosing the right framework and collecting the right data – you can build a report that’s both practical and meaningful.
Here’s a simple step-by-step approach to get started:
1. Identify what matters most
Start by figuring out which sustainability topics are most relevant to your business and stakeholders. This could include emissions, energy use, supply chain ethics, employee wellbeing, or waste. Tools like stakeholder surveys or materiality assessments can help you focus your efforts where they’ll have the most impact.
2. Choose your reporting framework
Pick the framework (or combination) that best fits your goals, industry, and legal obligations. Whether it’s GRI for broad transparency, SASB for investor relevance, or CSRD for EU compliance, your framework will shape what and how you report.
3. Collect your data
You’ll need both qualitative insights and hard numbers – from emissions data and diversity metrics to supply chain policies and social initiatives. Make sure your data sources are reliable, and validate your figures where possible to maintain credibility.
4. Build your report
Organise your content around the framework’s structure. Use plain language, include data visuals where helpful, and explain the story behind your numbers. Many companies also include case studies or goals to show progress and ambition.
5. Publish and engage
Once the report is ready, share it on your website, with investors, internally, and across other relevant channels. The aim isn’t just to tick a box, but to open up a conversation with the people your business impacts.
6. Track progress and keep improving
Sustainability reporting isn’t a one-off task – it’s part of an ongoing process. Keep reviewing your data, tracking against your goals, and updating your stakeholders on progress year over year.
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What about Greenly?
If you're looking to simplify your sustainability reporting and move from data to action, Greenly can help. Our carbon management platform is designed to make reporting clear, accurate, and aligned with the latest frameworks – whether you're just getting started or levelling up your strategy.
Here’s how we support your sustainability journey:
- Carbon footprint assessments: Measure your Scope 1, 2, and 3 emissions with precision, across your operations, value chain, and products.
- Compliance-ready reporting: Align your disclosures with frameworks like GRI, CDP, TCFD/IFRS S2, and CSRD. We’ll help you collect the right data and stay ahead of regulatory changes.
- Life Cycle Assessments (LCA): Understand the full environmental impact of your products or services and make more informed decisions.
- Decarbonization strategies: Use our tools and expert guidance to set science-based targets and create realistic, high-impact reduction plans.
- Sustainable procurement support: Identify greener suppliers and improve the sustainability of your value chain with data-driven recommendations.
Whether you're reporting to stakeholders, preparing for regulation, or looking to build a long-term climate strategy, Greenly’s platform and team are here to help. Get in touch to see how Greenly can support your goals.
Sources:
- KPMG: The State of Sustainability at the World’s Top Firms, Sustainability Magazine
https://sustainabilitymag.com/articles/kpmg-the-state-of-sustainability-at-the-worlds-top-firms - McKinsey & Company, The ESG Premium: New Perspectives on Value and Performance
https://www.mckinsey.com/capabilities/sustainability/our-insights/the-esg-premium-new-perspectives-on-value-and-performance?utm_source=chatgpt.com - Greenly, What is ESG Reporting and Should You Be Doing It?
https://greenly.earth/en-gb/blog/company-guide/what-is-esg-reporting-and-should-you-be-doing-it - Greenly, The Sustainability Accounting Standards Board (SASB)
https://greenly.earth/en-gb/blog/company-guide/the-sustainability-accounting-standards-board-sasb - Greenly, The GRI (Global Reporting Initiative): How to Implement It
https://greenly.earth/en-gb/blog/company-guide/the-gri-global-reporting-initiative-how-to-implement-it - Greenly, TCFD Standards: All You Need to Know
https://greenly.earth/en-gb/blog/company-guide/tcfd-standards-all-you-need-to-know - Greenly, What Are IFRS Sustainability Disclosure Standards?
https://greenly.earth/en-gb/blog/company-guide/what-are-ifrs-sustainability-disclosure-standards - Greenly, CSR Meaning: All You Need to Know
https://greenly.earth/en-gb/blog/company-guide/csr-meaning-all-you-need-to-know - CDP, CDP 2023 Disclosure Data Factsheet
https://cdp.net/en/insights/cdp-2023-disclosure-data-factsheet - McKinsey & Company, Decarbonize and Create Value: How Incumbents Can Tackle the Steep Challenge
https://www.mckinsey.com/capabilities/sustainability/our-insights/decarbonize-and-create-value-how-incumbents-can-tackle-the-steep-challenge?utm_source=chatgpt.com - Edelman, 2020 Institutional Investor Trust Report
https://www.edelman.com/sites/g/files/aatuss191/files/2020-11/Edelman%202020%20Institutional%20Investor%20Trust_FINAL.pdf - Greenly, What is the Corporate Sustainability Reporting Directive (CSRD)?
https://greenly.earth/en-gb/blog/company-guide/what-is-the-corporate-sustainability-reporting-directive-csrd - Greenly, UK Companies Act 2006: Objectives and Environmental Concerns
https://greenly.earth/en-gb/blog/company-guide/uk-companies-act-2006-objectives-and-environmental-concerns - UK Government, Academy Trust Financial Management: Good Practice Guides
https://www.gov.uk/government/publications/academy-trust-financial-management-good-practice-guides
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