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From the onset of the 1980s, sustainability reporting emerged as a scattered
concept. But with the arrival of the 2000s, sustainability reporting renewed
with vigor. Then in 2004, the term ESG was popularized in a report titled, “Who
Cares Wins”, a collaboration of financial institutions at the invitation of the
UN.



 1. Home
 2. Blogs
 3. Sustainability reporting vs ESG reporting: How different are they?




SUSTAINABILITY REPORTING VS ESG REPORTINGHOW DIFFERENT ARE THEY?




From the onset of the 1980s, sustainability reporting emerged as a scattered
concept. But with the arrival of the 2000s, sustainability reporting renewed
with vigor. Then in 2004, the term ESG was popularized in a report titled, “Who
Cares Wins”, a collaboration of financial institutions at the invitation of the
UN.

From 1980s till the 2000’s, we witness the rise of conscious effort by nations
and businesses alike to build sustainable business practices that push human
developments while safeguarding the planet. With time, sustainability and ESG
reporting emerged which meant enterprises must report on their non-financial
activities.

But with growing policies and changes, these concepts became more comprehensive,
and several distinctions arose. For those who are new to this race, these
phrases may seem interchangeable. However, they are distinct from one another.

This blog aims to clarify the distinction, share facts, and highlight their
importance so that organizations can ultimately decide – what suits their
requirements. Let’s dive in.


SUSTAINABILITY AND ESG REPORTING: DEFINITIONS AND ITS IMPORTANCE




SUSTAINABILITY REPORTING



According to Greenly.earth, sustainability reporting entails the disclosure of
environmental, social and governance (ESG) goals. With sustainability reporting,
a corporate entity takes stock of the action plan implemented to reach its
targets.

With sustainability reporting, enterprises enjoy better risk management,
improved cost optimization, enhanced reputation and more. These benefits result
from accessing social and environmental risks and creating risk management
strategies, set newer goals, integrate sustainable business practices that help
businesses navigate them better.




ESG REPORTING



Greenbusinessbureau.com states that ESG reporting is the disclosure an
enterprise’s data on its initiatives across environmental, social, and
governance aspects. By disclosing this information, a company’s progress related
to these three fields can be examined against benchmarks and targets. Upon
examination, an ESG report is crafted with the intention of providing complete
transparency to the various stakeholders.

The benefits of ESG reporting include:

 * Improve risk management: ESG reporting helps access risk, find suitable
   solutions and build enterprise resilience for the long-term.
 * Comply with regulations: With evolving regulations, ESG reporting helps
   comply with different regulation requirements present across the world.
 * Attract and retain investors: With an increasing ESG concern, investors
   continue to scrutinize enterprises based on their ESG initiatives. With ESG
   reporting, investors gain confidence on a business’s endeavors and attract
   more investors.

Now that we understood the definition and importance, let us focus the
difference between the two reporting concepts.


ESG VS. SUSTAINABILITY: THREE DIFFERENCES



Here is a tabulated version of the key difference between sustainability
reporting and ESG reporting.

Sustainability reporting ESG reporting Sustainability as a concept and reporting
has a broader focus incorporating scientific inputs. ESG reporting has a narrow
focus helping enterprises assess a company’s performance and risks.
Sustainability reporting is used as a communication tool by enterprises. ESG
reporting is considered by investment decisions for businesses. Sustainability
reporting utilizes various metrics such as carbon footprint, energy
consumptions, and water consumption. ESG reporting also uses some of the
sustainability measures but has a more comprehensive inclusion with metrics
related to gender equality, employee benefits, greenwashing among others.
Sustainability reporting has been vague which deters businesses from accepting
it. Also, without a clear measurement for performance and reporting, businesses
find it hard to quantify the result. Given its precision, more businesses adopt
ESG reporting, and it has been proven that businesses having high ESG
performance showcase lower risk exposure and higher returns on investment, along
with increased resilience and performance.

While these differences are minute, their impact upon a company’s performance is
immense. Both sustainability and ESG reporting have their strengths and
weaknesses and it is upon an enterprise’s focus that depends on which reporting
measure they should choose.




OTHER RESOURCES



TOP 5 QUESTIONS ON SUSTAINABILITY AND ESG REPORTING ANSWERED



Sustainability has gained a lot of traction in recent times, but with little
clarity. As businesses strive to incorporate more environmentally conscious
strategies and reporting into their operations, they seek visibility into this
ever-evolving process.

Read more

WHY SHOULD YOU INVEST IN ESG REPORTING?



With an increasing focus on the environment and increasing climate risk, it is
not surprising for businesses to be more transparent with their financial and
non-financial reports.

Read more

TOP 5 QUESTIONS ON SUSTAINABILITY AND ESG REPORTING ANSWERED



Sustainability has gained a lot of traction in recent times, but with little
clarity. As businesses strive to incorporate more environmentally conscious
strategies and reporting into their operations, they seek visibility into this
ever-evolving process.

Read more

WHY SHOULD YOU INVEST IN ESG REPORTING?



With an increasing focus on the environment and increasing climate risk, it is
not surprising for businesses to be more transparent with their financial and
non-financial reports.

Read more
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Risk and compliance
Reconciliation

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