In recent years, sustainability has gone from being an option to a moral, legal and strategic obligation for companies. But, beyond good intentions, how do you demonstrate a real commitment to the planet and society? That is where the sustainability report comes into play, an essential tool that reflects the responsible management of an organization, its achievements and its challenges in environmental, social and economic matters.
If you have heard of it but do not know exactly what it includes or how it is made, we will explain it to you now.
What is a sustainability report
The sustainability report is a document in which a company transparently communicates its environmental, social and governance (ESG) performance. In other words, it shows how the organization contributes to sustainable development, beyond financial results.
It is a periodic annual report that presents clear and verifiable information about the impact the company has on its environment, its employees, its clients and the community. Today, it is not just a matter of image, the law obliges many companies to prepare and publish it, especially those with a certain size or turnover. But even for those that are not obliged, doing so represents a great opportunity to strengthen their reputation and attract investors, clients and talent committed to sustainability.
Content
The content of a sustainability report can vary depending on the sector and the methodology used (for example, GRI Standards, Global Compact or ESRS Standards under the new European Corporate Sustainability Reporting Directive, CSRD). However, it usually has these blocks:
- General information about the company: structure, business model and strategic objectives.
- Sustainability commitments and policies: corporate values, ethical principles and alignment with the Sustainable Development Goals (SDGs).
- Environmental performance: energy consumption, CO2 emissions, waste management, water or natural resource use.
- Social performance: labor rights, equality, health and safety, training or community impact.
- Governance: management structure, transparency, risk control and regulatory compliance.
- Indicators and results: comparable year over year metrics that allow progress to be measured.
Purpose
The main purpose of the sustainability report is to be accountable to stakeholders (employees, clients, suppliers, investors, public administrations and society). It serves to demonstrate with data that sustainability is not an empty promise, but a real and measurable practice.
Furthermore, its preparation drives companies to evaluate their own performance, detect areas for improvement and define strategies more aligned with current environmental and social challenges. In many cases, this report becomes an internal management tool, helping to make more ethical and sustainable decisions.
Companies that must comply with the law
Since the entry into force of Law 11/2018, later adapted to European regulations, companies with more than 250 employees, with a turnover exceeding 40 million euros or total assets exceeding 20 million are obliged to prepare and publish their sustainability report.
As of 2024, with the new CSRD Directive (Corporate Sustainability Reporting Directive), this obligation is gradually extended to more types of companies, including listed SMEs and large business groups. The objective is to unify criteria, increase transparency and ensure that the reported information is verifiable, comparable and useful for all market agents.
Benefits of a sustainability report
Although many companies prepare this document due to legal requirements, the real advantage lies in what it brings both inside and outside the organization.
- Reputation and trust. A well prepared sustainability report reinforces the company credibility before clients, investors and society. It demonstrates consistency between what is said and what is done.
- Better internal management. By collecting and analyzing environmental, social and governance data, the company identifies risks and opportunities that often go unnoticed.
- Access to sustainable financing. Increasingly, banks and investors value sustainability as a key criterion. A solid report facilitates access to green funds and ESG financing lines.
- Competitive advantage. Companies that transparently communicate their environmental and social performance improve their brand positioning and differentiate themselves from their competitors.
- Talent attraction and retention. Professionals, especially younger ones, seek to work in organizations with a purpose. Showing a real commitment to the planet and people helps to build team loyalty.
- Regulatory compliance. Preparing a sustainability report ensures that the company is aligned with current legislation and reduces exposure to sanctions or loss of public tenders.
How to create your sustainability report
These are the essential steps to prepare a sustainability report:
- Assign responsibilities. The first thing is to define who will be in charge of the process. Generally, a sustainability or CSR team is created to coordinate the collection of information, establish indicators and write the report. It is also essential to involve other key areas: finance, human resources, communication, production or environment.
- Plan. Before writing, a work schedule must be designed, which implies defining the project phases, deadlines, available resources and communication objectives.
- Identify contents. In this phase, it is determined what information is relevant to include in the report and for this, the company impacts are analyzed in three dimensions:
- Environmental: energy, waste, emissions, water consumption.
- Social: diversity, labor rights, training, equality.
- Governance: ethics, transparency, anti corruption.
- Materiality matrix, which is a key tool in any sustainability report. It serves to prioritize the most important topics for both the company and its stakeholders. It is prepared through interviews, surveys or context analysis, and is represented in a graph where two axes cross:
- Relevance for stakeholders (employees, clients, suppliers, society).
- Economic, social or environmental impact for the organization.
- Preparation. Finally, the drafting, design and validation phase of the report arrives. The document must be clear, visual and transparent, combining quantitative data with examples and narratives that illustrate sustainable actions. It is advisable to follow recognized standards such as the GRI Standards, and once finished, submit it to external verification to guarantee the reliability of the information.
When all this is done, the sustainability report must be published on the corporate website and disseminated through the company communication channels, ensuring its accessibility and visibility.
