ESG reporting refers to the disclosure of data covering business operations related to the environmental, social, and governance aspects of a business. It is a way for companies to report on their environmental, social, and governance impacts and activities, and to demonstrate their commitment to sustainability and responsible business practices. ESG reporting is important for organizations for many reasons, including:

• Compliance: There are a growing number of regulations globally requiring organizations to disclose and report on ESG initiatives, sustainability, and governance. An ESG report provides a way for organizations to make proper disclosure and helps ensure regulatory compliance.

• Risk management: ESG reporting is a form of risk management addressing business, sustainability, and social issues. Reporting ESG performance in ESG reports is a way to demonstrate that a company is meeting goals and that its ESG projects are genuine.

• Investor transparency: ESG reporting is more relevant to publicly traded companies looking to attract and inform investors or any other business looking to attract financing. Investors place greater importance on requiring consistent and mandated standards than finance leaders do as preparers.

ESG reporting is encouraged to use reporting which relies on recognized frameworks and standards. Although there is no universal standard yet, ESG reporting does exist in the form of regional and industry-specific standards. ESG reporting is a way for companies to communicate their ESG performance to stakeholders, including investors, employees, and regulatory authorities.