Going Back to the Basics: The Criteria for ESG Sustainability Reporting

by Business Published on: 15 February 2022 Last Updated on: 05 March 2022

ESG Sustainability

The world of business is adrift, moving towards the emerging target for sustainability. Businesses, governments, experts, and regulatory authorities appear in agreement that every entity must be involved in addressing the challenges facing the planet. Let’s put it plainly here: it is becoming extremely difficult to talk about the success of an enterprise if it is not sustainable.

Notably, ESG reporting has largely been voluntary, with only the large companies committing to the process. However, the net is now cast wider and no matter the size and nature of your business, there is no way out. You need to start ESG reporting.

To get it right on ESG reporting, it is time to go back to the basics. Keep reading as we delve deeper to answer the big question, “What are the criteria for ESG sustainability reporting?”

The Criteria for Sustainability in Business 

There are three primary criteria for ESG sustainability reporting, environmental, social, and governance. Therefore, if you target to promote sustainability, these three things should be deeply integrated into your brand’s operations. So, let’s take a closer look.

1. Environmental 


This criterion describes how a company impacts different aspects of the natural environment. The damage to the environment has been a major cause of concern for decades. For example, global warming has been associated with problems such as the loss of fragile ecosystems and the thawing of polar ice. Some good examples of areas of focus for your company include:

  • Conservation.
  • Pollution.
  • Energy use.
  • Air quality.
  • Emissions.
  • Water treatment.

Stakeholders mainly evaluate companies based on the current and potential environmental issues. Take the example of a manufacturing facility that handles toxic wastes. Investors will want to know that the company understands the dangers associated with the waste and has already installed the right strategies to mitigate them.

2. Social

The social criterion is focused on how businesses manage and interact with people, cultures, and other businesses. For example, what is the organizational culture in your enterprise? Does the company work with or assist nonprofits? Do you support communities near your areas of operations? Are you involved in conservation activities?

Some of the things considered in this criterion include:

  • Diversity.
  • Inclusivity.
  • Gender issues.
  • Labor standards.
  • Customer interaction.
  • Staff engagement.

As a business, it is important to demonstrate you are a responsible part of the community. About 76% of business leaders also consider integrity and ethics part of the social aspect in ESG sustainability reporting.

3. Governance 


This aspect relates to how your business runs internally. Your stakeholders want to understand whether the business processes are transparent and accurate. It also includes democracy in decision-making. Other things covered by this criterion include:

  • Whether the business follows the best practices in all areas of operations.
  • Commitment and adherence to the local regulations in the area of operations.
  • Ability to operate without conflicts in the top management. These conflicts are also looked at from a broader perspective of political-related inclinations. Does the company target favors from political leaders to thrive?

Understanding these pillars of ESG sustainability is only the first step in your reporting process. Furthermore, you need to follow an appropriate reporting framework, such as the Global Reporting Initiative (GRI) or the Task Force on Climate-Related Financial Disclosures (TCFD) frameworks.

Finally, the data you gather and report on must be as accurate as possible. The best way to do this is to get appropriate sustainability reporting software. The program can help you to automate data gathering, analysis, and keep the cost of reporting low. Visit Diginex.com to talk to a professional in ESG reporting and pick the best software for sustainability management.

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Sumona is a persona, having a colossal interest in writing blogs and other jones of calligraphies. In terms of her professional commitments, she carries out sharing sentient blogs by maintaining top-to-toe SEO aspects. Follow more of her contributions at SmartBusinessDaily and FollowtheFashion

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