The sustainability report tells how your organization manages its environmental, social and governance (ESG) impacts. But it is not just an external communication tool: if built on recognized standards and reliable data, it becomes a strategic ally to analyze your performance, highlight what works and identify where you can improve.
To create it effectively, there is no single path that works for every organization. However, there are recurring steps that make the difference between a purely formal report and one capable of generating real added value. Here are the 7 essential steps to build a credible, useful document that truly reflects your commitment to sustainability.
Choose the most suitable reporting standard
One of the first steps is to understand which standard to follow for your reporting. If your company falls within the scope of the European CSRD (Corporate Sustainability Reporting Directive), the ESRS (European Sustainability Reporting Standards) are mandatory and represent the starting point for your report.
If you prepare a sustainability report on a voluntary basis, choosing a standard becomes a strategic decision. Adopting a recognized framework guides you in data collection and helps structure information coherently. It also ensures credibility and comparability, allowing stakeholders to assess your performance.
Among the recognized standards are:
- GRI (Global Reporting Initiative), used by organizations of all sizes worldwide for comprehensive ESG reporting;
- SASB (Sustainability Accounting Standards Board), focused on financially material sustainability metrics specific to each sector;
- VSME (Voluntary Standard for non-listed SMEs), designed specifically for small and medium-sized enterprises.
Your choice will depend on stakeholder expectations, the sector in which you operate and the strategic objectives you want to pursue with the report. Many companies also choose to combine multiple standards to address different needs.
Identify material topics
The materiality assessment allows you to identify the ESG topics that are most relevant to your company and your stakeholders. It guides the entire reporting process, clarifying which sustainability aspects to focus on when collecting data and setting improvement objectives.
Without a solid materiality assessment, there is a risk of producing a generic report that is not aligned with either stakeholder expectations or the real impacts of your organization.
The analysis is developed through several key phases, identifying not only the impacts generated by business activities on the outside world (impact materiality), but also how sustainability issues affect the value of your company (financial materiality), especially if you fall within the scope of the CSRD.
Collect the data to include in the report
Drafting a sustainability report requires the collection of numerous data points across the three ESG dimensions. The information to be gathered depends on the identified material topics, the chosen reporting standard and the specific indicators required. Generally, it includes both quantitative data (energy consumption, emissions, workforce diversity percentages) and qualitative data (company policies, implemented initiatives).
To collect data effectively, involve different company functions in a structured way. Clearly define who is responsible for collecting each data point, what the primary sources are (invoices, management software, registers) and how often the information should be updated, to ensure consistency and traceability.
This phase often represents a moment of increased awareness: information gaps, unstructured data management processes or indicators not yet systematically monitored may emerge. This is not a problem—the key is to transparently document any limitations and gradually build a more robust data collection system for future years.
Assess ESG performance and define improvement objectives
Once the data has been collected, it must be analyzed to understand your current ESG performance. This assessment helps identify where the most significant impacts are concentrated, which strengths can be leveraged and which areas require priority action.
Data analysis becomes the basis for defining concrete sustainability objectives, a central element of the report. These objectives make the company’s commitment to continuous improvement explicit and allow progress to be monitored over time.
We suggest formulating objectives according to the SMART principle, ensuring they are Specific, Measurable, Achievable, Relevant and Time-bound. For example: “Reduce Scope 1 and 2 emissions by 30% by 2030 compared to 2023” or “Achieve 50% renewable energy by 2027.” Objectives should be ambitious yet realistic, representing a motivating challenge rather than an unattainable goal.
Write a transparent and credible report
Drafting the report requires a balance between transparency and effective communication. It is important to present both positive results and emerging critical issues: hiding weaknesses undermines the credibility of the document and can expose you to accusations of greenwashing, with reputational consequences and potential legal sanctions.
Avoid generic statements such as “we are committed to the environment” or “we are a sustainable company” without concrete data to support them. Every claim should be backed by verifiable evidence.
If certain objectives have not yet been achieved or if negative performance has been recorded on some indicators, explain the reasons openly and describe the corrective actions being implemented. This approach demonstrates honesty and a commitment to continuous improvement.
Transparency helps build trust with stakeholders and differentiates your company in a context where superficial or misleading communications are easily recognized.
Publish and disseminate the report
A well-prepared report only has value if it reaches its intended audience. You can publish it on your company website in a downloadable format and make it easy to find.
We also recommend creating derived materials for different channels. For example, you can prepare an executive summary for investors and partners, visual infographics for social media, and presentations for employees. Active dissemination shows that sustainability is not just a formality, but an integral part of your corporate strategy and communication.
What happens next?
The sustainability report is not a destination but the beginning of a journey. Reporting is a cyclical process that should be repeated annually, monitoring progress toward the defined objectives. Each new report should show improvements compared to the previous year. Only in this way does reporting become a tool for real transformation.
By analyzing results, identified gaps and stakeholder feedback, the company can strengthen and update its ESG strategies. In this way, the report is not only an external communication tool, but also an operational support for more informed decision-making and continuous improvement.
Ready to start your reporting journey?
At Kyklos Carbon, we support you at every stage, from the materiality assessment to report drafting, ensuring transparency, methodological rigor and effective communication of your sustainability efforts.
Contact us to discover how to make your reporting credible, measurable and truly useful for your business.
Sustainability report: the 7 fundamental steps to create it