What is ESG Reporting?
An overview of ESG reporting — what it involves, which frameworks and standards apply, and what level of disclosure is realistic and useful for an SME.
Key Takeaways
- ESG reporting means disclosing your environmental, social and governance performance to stakeholders.
- Multiple frameworks exist — GRI, TCFD, CSRD — and the right one depends on your audience.
- SMEs can start with lightweight, proportionate disclosure rather than full framework compliance.
What ESG reporting involves
ESG reporting is the process of measuring and disclosing your business's performance on environmental, social and governance criteria to relevant stakeholders — investors, customers, employees and regulators. At its most basic, it might mean publishing an annual carbon footprint and a summary of your employment practices. At its most comprehensive, it involves audited sustainability reports aligned to international frameworks with quantitative targets, detailed methodology and third-party assurance. The right level of reporting depends on the size of your business, your customer base, your investors, and any regulatory requirements that apply to you.
Key reporting frameworks
The main ESG reporting frameworks are: GRI (Global Reporting Initiative) — the most widely used voluntary standard, covering a broad range of ESG topics; TCFD (Task Force on Climate-related Financial Disclosures) — focused on climate risk and opportunity disclosure, now mandatory for large UK companies; CSRD (Corporate Sustainability Reporting Directive) — EU legislation that will apply to larger UK businesses operating in Europe; and the UK SDR (Sustainability Disclosure Requirements) — the UK's emerging framework for investment products. SMEs are not typically required to use these frameworks but may be asked to provide data that feeds into a large customer's or investor's own framework reporting.
A proportionate approach for SMEs
Most SMEs do not need a 60-page sustainability report. A proportionate starting point is: measure and disclose your carbon footprint annually; publish a brief statement on your social commitments (workforce practices, community, diversity); describe your governance basics (how decisions are made, conflicts of interest policy, anti-bribery stance); and be honest about where you are in your journey. Hosting this on a dedicated page of your website or in a one-page ESG summary document is sufficient for most supplier due diligence questionnaires and investor enquiries. Build from there as expectations evolve.