ESG reporting

ESG reporting has moved from a voluntary exercise to a compliance requirement for most large organisations. With frameworks like CSRD and ESRS setting increasingly detailed disclosure standards, the pressure on finance and sustainability teams to deliver accurate, consistent and auditable ESG data has never been higher.

But many organisations find that their ESG reporting process is more fragile than it looks from the outside. Data comes from multiple departments. Definitions differ between teams. Methodologies are stored in spreadsheets or the memory of one or two individuals. And when an auditor or assurance provider starts asking questions, the answers are harder to produce than expected.

ESG reporting and the Fidugius esg reporting manual

WY ESG REPORTING IS HARDER TO MANAGE THAN IT APPEARS

The challenge with ESG reporting is not a lack of ambition. Most organisations have set ESG targets and defined their material topics. The problem is what happens between strategy and disclosure.

ESG performance data typically flows through finance, HR, procurement, operations and sustainability, often without a shared structure for definitions, responsibilities or measurement methodologies. The result is data that cannot be easily compared, verified or explained.

Common issues include:

Different teams applying different definitions for the same ESG metric
Unclear ownership of data collection across departments and entities
ESG questionnaires filled in inconsistently each reporting cycle
Methodologies that exist informally but are not documented
Difficulties defending ESG performance figures during external assurance

These are not problems that can be solved by working harder at year-end. They require a structural approach.

THE IMPORTANCE OF ESG REPORTING

ESG is an acronym for Environmental, Social, and Governance and refers to the framework used by companies to assess their impact on the environment and society, as well as their management practices. Companies report to their stakeholders on their policies and efforts to manage ESG risks and opportunities in their ESG report. Until recently, ESG reporting was voluntarily and companies were not bound to any directive. However, more and more regulators are requiring companies to report on ESG in accordance with a certain framework.

For example, the EU requires all large EU-listed companies to report on ESG from 1 January 2024 in accordance with the Corporate Sustainability Reporting Directive (CSRD). As of 2025. large companies and from 2026, small and medium-sized EU-listed companies have to adhere to the directive.

OBJECTIVES OF ESG REPORTING

ESG reporting serves several purposes, including:

Transparency: ESG reporting provides transparency on a company’s sustainability performance, which can help build trust with stakeholders and enhance the company’s reputation.

Risk management: ESG reporting can help companies identify and manage ESG risks, such as climate change, resource scarcity, labour practices and supply chain issues.

Opportunity identification: ESG reporting can help companies identify new business opportunities, such as energy efficiency, circular economy initiatives or community engagement programmes.

Stakeholder engagement: ESG reporting can help companies engage with stakeholders and understand their concerns, priorities and expectations.

Regulatory compliance: In some cases, ESG reporting is required by law or regulation, such as the EU’s Corporate Sustainability Reporting Directive (CSRD).

CONTENT OF AN ESG REPORT

An ESG report contains qualitative and quantitative data on the three factors. It is important for each company to assess the most relevant or material topics, as diversity exists in what is relevant to each company. For example, the environmental impact of an oil and gas company may differ from that of a telecom company.

Step 1: Understand the organization’s context
Prepare a long list of topics to use as a starting point by referencing international reporting standards (such as the GRI and SASB), media research, a peer review and a risk and trend analysis of the industry.
Step 2: Identify actual and potential impacts
Determine the specific relevance of each topic to the company through (online) surveys and interviews, collecting input from customers, associates, investors, NGOs, suppliers, producers and governmental organizations. Examine the management’s view on the most important topics and how they relate to the strategic growth drivers.
Step 3: Assess the significance of the impacts
Based on long list of ESG relevant matters, determined their significance and impact and prioritise them to create a short list of material topics.
Step 4: Prioritize the most significant impacts for reporting
Create a list of material topics, discuss them with management and get their approval.

Following the ESG materiality assessment, the ESG material topics for a retail food store and e-commerce business may be as follows*:

Environmental topics
	CO2 emissions and climate change	Reduce greenhouse gas (GHG) emissions in our supply chain and own operations (stores, DCs and logistics) and increase energy efficiency in our own operations.
	Food waste	Promote responsible handling to reduce food waste and increase reuse of food waste along the supply chain, in distribution and operations as well as in customers’ homes.
	Sustainable agriculture	Promote agricultural practices that support healthy ecosystems, economic viability and social equity
	Sustainable packaging	Reduce the use of plastic and other packaging materials, decrease the weight of packaging, and increase the recyclability, reusability and recycled content of packaging.
Social topics
	Healthy products	Increase the share and availability of healthy products in our brands’ assortment and provide information to enable healthier and more sustainable diets for customers and associates.
	Fair labour practices in the supply chain	Promote respect for human rights, wages and incomes and labour practices throughout the supply chain and pay a fair price to suppliers and farmers.
	Associate safety, health and wellbeing	Create a healthy and safe work environment that fosters associate well-being.
Governance topics
	Product safety and quality	Guarantee the highest safety and quality standards for the products our brands sell and, at minimum, comply with applicable local legislation.
	Available and affordable products	Ensure product availability and affordable pricing of our brands’ products to meet the (dietary) needs of customers.
	Diversity and inclusion	Ensure equal treatment of all associates independent of gender, age, religion, race, caste, social background, disability, ethnicity, nationality, membership in workers’ organizations, political affiliation, sexual orientation, or any other personal characteristic protected by law.

* Derived from the Ahold Delhaize annual report 2022.

ESG REPORTING PROCESS

Once the material ESG topics have been determined, the following actions should be taken:

Collect data and information: The company will need to collect data and information about its performance on its ESG topics. This may involve gathering data from internal sources, such as operational records and management reports, as well as external sources, such as industry benchmarks, stakeholder surveys and third-party assessments.

Account on ESG: The company will account on the collected data and information in an information system to have a single point of truth for all ESG data.

Analyse and interpreting data: The next step is to analyse and interpret the data and kpi’s to identify trends, patterns and areas for improvement to meet targets. This may involve conducting quantitative and qualitative analysis to assess the company’s performance on each ESG issue and to identify potential risks and opportunities.

Report on ESG performance: The final step is to report on the company’s ESG performance to stakeholders. This involves preparing a sustainability report that provides information on the company’s ESG performance, goals and strategies. The report should be accurate, comprehensive and relevant to stakeholders’ information needs.

ENSURE TIMELY AND RELIABLE ESG REPORTING

For any company, it is important that reporting on ESG is timely and reliable. While financial reporting processes have developed over 100 years, ESG reporting has to be realised fast. To ensure reporting on ESG is timely and accurate, the following should be considered:

Establishing governance and accountability: A company should establish a clear governance structure and accountability framework for ESG reporting. This should include defining roles and responsibilities, setting performance targets, and establishing processes for data collection, analysis, and reporting.

Using recognised frameworks and standards: A company should use recognised ESG reporting frameworks and standards, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), or the Task Force on Climate-related Financial Disclosures (TCFD), to guide its reporting process and ensure consistency and comparability across different reporting periods and companies.

Set up accounting & reporting manual: A manual provides guidance and instructions for the collection, analysis and reporting of ESG data and ensures that the reporting process is consistent, transparent and auditable. All employees are informed of requirements and can be held accountable for non-compliance.

Conducting independent verification: A company should engage an independent third party to verify its ESG data and reporting. This could involve obtaining an assurance opinion from an external auditor or engaging a specialised ESG verification firm to review the company’s data and reporting.

Engaging stakeholders: A company should engage with its stakeholders, including investors, customers, employees and community members, to understand their information needs and to ensure that the reporting is relevant and useful to them.

Continuously improving: A company should continuously review and improve its ESG reporting process to ensure that it remains accurate, relevant and reliable over time. This could involve updating performance targets, refining data collection and analysis methods, and incorporating stakeholder feedback.

WHAT CONSISTENT ESG REPORTING REQUIRES

Reliable ESG reporting — the kind that stands up to external scrutiny and supports management decisions — depends on a few fundamentals being in place.

Every metric needs a clear definition, agreed across the organisation. How is energy consumption measured? What counts as a work-related injury? Which entities are in scope for which KPIs? Without documented answers to these questions, ESG questionnaires will be answered differently every cycle.

Methodologies need to be documented and accessible. Not stored in a presentation from two years ago, but available to the people collecting and submitting data — in clear, practical language.

Ownership needs to be explicit. Someone needs to be accountable for each KPI: for the definition, the data collection, the calculation and the submission. When that is unclear, data quality suffers.

And the whole framework needs to stay current. Regulations evolve. Materiality assessments change. New entities come into scope. A static document cannot keep up, but a living platform can.

HOW FIDUGIUS SUPPORTS ESG REPORTING

The Fidugius ESG Reporting Manual brings all ESG reporting guidance together in one structured, searchable platform. It connects ESG policies, KPI definitions, accounting treatments, cost centre allocations and reporting responsibilities in a single knowledge environment.

This means finance and sustainability teams across your organisation work from the same definitions and methodologies, every period, every entity. ESG questionnaires get filled in consistently. Methodologies are documented and auditable. And when assurance providers ask questions, the answers are right there.

The platform can be deployed within your own SharePoint environment or as a managed SaaS solution, and is designed to be maintained independently by your own team.

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