1 January 2023 marked a turning point for European companies due to the entry into force of the ESRS (European Sustainability Reporting Standards), a significant change in the field of corporate sustainability. This regulation redefined corporate obligations and strategies and established new transparency and reporting criteria.

Today, ESRS standards are starting to be implemented and are expected to play a key role in the field of corporate sustainability. However, adapting to these new requirements is a challenge for many organisations; it is a demanding and complex process that generates uncertainty and requires careful planning. This guide is intended to serve as a roadmap to understanding ESRS and sustainability reporting, but only as a starting point and initial orientation.

Preparation for the report

As a complex and multifaceted process, it is essential that the report is preceded by adequate preparation. This initial phase is very important in order to address all aspects of the report and to collect accurate and relevant data.

Stakeholder identification

The first step in preparing a sustainability report is to identify stakeholders. This includes employees, customers, suppliers and investors, among others. It is essential to consider these groups from the outset so that the report reflects their interests and concerns.

Collection and organisation of necessary data

Once stakeholders have been identified, the next step is to collect and organise relevant data. This may include information on:

• Resource consumption: Data on the use of water, energy, raw materials and other natural resources.
• Emissions: Information on emissions of greenhouse gases and other air pollutants.
• Waste management: Data on waste generation, treatment and disposal, including recycling and reuse.
• Working conditions: Information on occupational health and safety, equal opportunities, training and career development of employees.
• Community impact: Data on contributions to the local community, including social investments, community projects and volunteer programmes.

It is essential that all data is accurate, current and verified by reliable sources. Using digital tools and specialised software can facilitate the collection and organisation of this information.

Selection of key performance indicators (KPIs)

KPIs are specific metrics that are established as a reference to evaluate the organisation’s performance in different areas of sustainability. They are not set arbitrarily, but respond to previously defined objectives and the need to measure specific aspects of the company’s activity.

Choosing the right KPIs helps to get a clear and structured picture of the company’s progress in sustainability. To this end, it is essential that the KPIs are appropriate for the sector and the company’s activity, measurable to facilitate monitoring over time, and aligned with ESRS standards, which ensures compliance with current regulations and consistency in the presentation of information.

Structure of the report

In order for the sustainability report to be clear and understandable, it is crucial that it follows a well-defined structure.

Introduction and context of the report

This section provides an overview of the purpose of the report and contextualises the information presented. It is important to explain why the report is being prepared and what it is expected to achieve. It should also include information about the company, its mission and vision, and how it relates to the sustainability objectives.

Methodology used for data collection

This section is intended to detail the techniques used to collect the data presented. This may include measurement methods, data sources, verification procedures and any tools or software used. Explaining the methodology helps to ensure the transparency and credibility of the report.

Results and sustainability analysis

This section presents the results obtained and provides a detailed analysis of the data. It should highlight achievements, identify areas for improvement and provide an interpretation of the results in the context of the company’s sustainability objectives. It is essential that this section is clear and supported by accurate and up-to-date data.

Content of the report

The content of the sustainability report should cover all key areas of the company’s activity. This section details the essential components that should be included to provide a comprehensive and transparent view of sustainability performance.

Environmental impact

• Consumption of natural resources: Describe and analyse the use of resources such as water, energy and raw materials, and include measures taken to improve the efficiency of such use.
• Greenhouse gas emissions: Report on emissions of greenhouse gases and other pollutants. Detail the strategies implemented to reduce these emissions and the results achieved.
• Waste management: Provide information on waste generation, treatment and disposal. Highlight recycling and reuse practices, as well as any initiatives to reduce the amount of waste generated.

Social impact

• Working conditions and human rights: Describe policies and practices related to occupational health and safety, equal opportunities and respect for human rights. Include statistics and examples of initiatives undertaken.
• Community impact: Provide details of the company’s contributions to the local community, such as social investments, community projects and volunteer programmes. Highlight the tangible benefits these actions have generated.

Economic impact

• Economic value creation: Report on the company’s financial results, including revenues, profits and tax contributions. Explain how these activities contribute to sustainable economic development.
• Financial risk management: Describe the policies and practices implemented to identify, assess and manage financial risks. Include examples of successful strategies and the results achieved.

Determine the key areas of the report

One of the difficulties in determining the key areas for the sustainability report is to cover all relevant aspects of interest to stakeholders. This process is essential for the report to be comprehensive and responsive to stakeholder expectations. The essential steps in identifying these areas are described below:

Regulations and standards

One source of reference is the applicable regulations and standards, such as the ESRS (European Sustainability Reporting Standards), to ensure that all guidelines and legal requirements are met. These standards provide a solid basis for identifying the most relevant areas of sustainability reporting.

One source of consultation is the applicable regulations and standards, such as the ESRS (European Sustainability Reporting Standards) and the Delegated Regulation (EU) 2023/2772, to ensure that all guidelines and legal requirements are met. These standards provide a solid basis for identifying the most relevant areas of sustainability reporting.

Stakeholder consultation

Engaging stakeholders (employees, customers, suppliers, investors and the local community) is one way to ensure that the sustainability report reflects their interests and concerns. Conducting consultations and surveys to understand their expectations and concerns will help us to identify the areas that are most important to them and ensure that the report is representative and responsive to their interests.

Materiality analysis

Materiality analysis is essential to identify and prioritise the sustainability issues that have the greatest impact on the company and its stakeholders. In this context, it is crucial to apply the concept of dual materiality, which includes:

• Financial materiality: It is necessary to analyse how sustainability aspects (impact on revenues, costs and financial risks) affect the financial situation of the company.
• Impact materiality: It is important to examine how the company’s activities impact the environment, society and the economy.

Objectives and strategies of the company

When preparing the report, it is essential to consider the company’s sustainability objectives and strategies. Aligning the report with the company’s long-term sustainability goals and public commitments helps to meet external expectations and ensure that the report reflects the company’s strategic vision and priorities.

Report writing and presentation

Once all the data has been collected and organised, the process of writing and presenting the report in a clear and effective way begins. The following are best practices to ensure that the report is understandable and convincing.

Use of clear and accessible language

What is ‘clear and accessible language’? It is language that can be understood by all stakeholders, regardless of their level of technical knowledge. To achieve this, it is essential to avoid the use of excessive jargon and overly technical terms. Instead, opt for clear and straightforward explanations that facilitate the understanding of the information presented.

Incorporation of graphs and tables for data visualisation

Graphs and tables are tools to help visualise data and make information more understandable: bar charts, pie charts and comparative tables to highlight key results and important trends. It is important that all graphs and tables are correctly labelled and easy to interpret.

Content review and validation

It is important to conduct a thorough review and validation of the content before publishing the report. This includes checking the accuracy of the data, ensuring that the report complies with applicable standards and regulations, and performing a linguistic review to correct any grammatical or typographical errors. Different departments and external experts will be needed to obtain a full validation.

Publication and communication

Once the report has been produced, it is important to carefully plan its publication and communication so that it reaches all stakeholders and has the widest possible reach. The key aspects of effective dissemination are described below:

Channels for disseminating the report

Selecting the right channels for dissemination of the report is essential to reach a wide and diverse audience. These channels may include:

• Company website: Publish the report in a dedicated sustainability section on the official website.
• Social media: Use platforms such as LinkedIn and Twitter to share the report and highlight key points.
• Email: Send the report to stakeholders through personalised email campaigns.
• Media: Engage with media outlets to achieve wide coverage.
• Events and presentations: Organise events, webinars or presentations to discuss the report’s findings with stakeholders.

Communication with stakeholders

Maintaining open and continuous communication with stakeholders helps to ensure that the report is well received and understood. This includes:

• Transparency: Provide clear and honest information about the results of the report and how the data was obtained.
• Dialogue: Encourage stakeholder dialogue and feedback through surveys, meetings and discussion forums.
• Regular updates: Inform stakeholders about progress and actions taken in response to the report findings.

Responding to feedback and continuous improvement

Stakeholder feedback is invaluable in improving the quality of future reporting and the company’s sustainability practices. This process includes:

• Feedback collection: Establish mechanisms to collect comments and suggestions from stakeholders.
• Analysing feedback: Evaluate the feedback received to identify areas for improvement and opportunities for development.
• Implementation of improvements: Implement necessary changes based on feedback and keep stakeholders informed of actions taken.
• Continuous assessment: Conduct periodic reviews of sustainability reporting and practices to ensure continuous improvement and adaptation to new regulations and expectations.

Useful resources and tools

Having the right resources and tools is the best way to make the sustainability reporting process efficient and accurate. Here are some of the most useful options:

Templates and digital tools for reporting

Using templates and digital tools can greatly facilitate the reporting process. Some recommended options include:

• Report templates: There are numerous pre-designed templates that can help structure the report in a coherent and professional manner. These templates often include pre-defined sections such as introduction, methodology, results, and conclusions, making it easy to organise the content.
• Data management tools: Software such as Excel, Google Sheets, and specific sustainability data management tools can help to collect, organise and analyse information efficiently.
• Online reporting platforms: Specialised platforms exist to collaboratively create, edit and publish sustainability reports, which can be useful for large teams.

Benefits of using specialised sustainability software

The use of specialised sustainability software offers advantages that can improve both the quality of the report and the efficiency of the reporting process:

• Process automation: These programmes can automate data collection and analysis, reducing the time and effort required to perform these tasks manually.
• Accuracy and consistency: Specialised software brings accuracy and consistency to data throughout the report, increasing the credibility and reliability of the information presented.
• Regulatory compliance: Many programmes are designed to comply with specific standards and regulations, making it easier to produce compliant reports.
• Data traceability: Enables detailed tracking of information, ensuring transparency throughout the reporting process.
• Adaptability to regulatory changes: They facilitate the updating of reports according to new regulations without the need for complex manual modifications.
• Data visualisation: These tools often include advanced data visualisation functions, allowing the creation of attractive and easy-to-interpret graphs and tables.
• Customised reporting: They offer flexibility to tailor reports to the specific needs of each company or stakeholder.
• Collaboration: Facilitate teamwork, allowing multiple users to work on the report simultaneously and make revisions and contributions in real time.
• Integration with other systems: They make it possible to connect with business management platforms, streamlining the reporting process.

Having the right sustainability software in place is therefore a key step towards efficient management of a company’s sustainability reporting and practices. Such software not only facilitates data collection and analysis, but also ensures the accuracy, consistency and compliance necessary to create reports that accurately reflect the company’s sustainability performance.

At Maska we help you transform your sustainability reporting into an opportunity for growth. Enhance your reputation and build a solid ESG differentiator. Don’t get left behind: connect with your stakeholders and make a difference!