Many businesses are confused when clients request ESG reports because they are unsure what the document should contain. In reality, there isn’t a single mandatory ESG report template for all businesses, but internationally accepted reports generally share a framework. Understanding this framework helps businesses know what data to prepare, avoiding lengthy reports that lack essential information. This article analyzes the components of a complete ESG report.
What is an ESG report and who is it written for?
ESG reports are corporate documents published periodically to present a company’s environmental, social, and governance performance. They usually cover a specific reporting period, often a fiscal year. To understand what does an ESG report include, businesses should first identify its purpose and intended readers. Unlike traditional communication materials, ESG reports rely on quantitative data. Each reported figure should also be supported by appropriate evidence.
The target audience extends beyond the general public. Key readers include international purchasing departments, bank appraisers, investors, independent rating agencies, and regulatory bodies. These readers approach ESG reports differently from ordinary consumers. They examine data, calculation methods, and trends across reporting periods. They also look for evidence that the company has effective governance and management systems. Identifying the intended readers from the outset helps determine the structure and content of the entire ESG report.
Introduction: Leadership Message and Company Profile
The introduction to an ESG report typically includes a message from the Chairman or CEO and an overview of the company. The leadership message should not be a mere formality. This is where readers assess the level of commitment from the leadership team, so the content should clearly state what the company has achieved during the period, what obstacles remain, and the direction for the next period. The company profile provides background information to help readers understand the context of the figures: industry, main products, revenue size, number of employees, number and location of factories, main export markets, and ownership structure. This information is more important than its appearance, because an emissions indicator is only meaningful when the reader knows which production scale it is associated with. The introduction should also clearly state the reporting period, scope, and applicable standards.
Identify key issues
This is the part that many Vietnamese businesses overlook, but it’s the part that international assessors read most carefully. No business has the resources to report on every ESG issue that exists, so the report must demonstrate why it chose to report on this topic rather than another. This process is called materiality assessment. Businesses need to present how they identify issues related to their operations, how they gather input from stakeholders such as customers, employees, suppliers, and the community, and how they prioritize those issues. The results are usually presented as a list or matrix of material issues. A report that clearly presents this section will build trust from the outset, as it shows that the business understands its industry and isn’t simply copying content from other businesses.
What does an ESG report include in the Environment pillar?
The Environment pillar typically occupies the largest space and is also the section that international clients scrutinize most closely. The basic data groups include energy consumption by fuel and electricity type, greenhouse gas emissions by Scope 1 and Scope 2 and Scope 3 if applicable, water extraction and wastewater generation, waste volume by type and treatment method, material usage levels, and recycling rates. In addition to figures, the report should present the calculation methodology, emission factors used, and data period for readers to compare. This section should also highlight initiatives implemented during the period, such as replacing light bulbs with energy-efficient ones, installing rooftop solar panels, or renovating boilers, along with corresponding quantitative results. Figures without a calculation methodology will be considered unreliable, no matter how impressive they may appear.
Social pillar content
The Social pillar focuses on people inside and outside the business. Labor data includes the total number of employees by gender, age, contract type, and region. Other indicators may include employee turnover, women in management positions, and average training hours per employee. Safety data includes workplace accidents, lost workdays, accident frequency rates, and prevention programs.
The report should also present wage policies and mechanisms for dialogue with employees. It should address commitments against child labor and forced labor. Mechanisms for receiving and handling employee complaints should also be described. For export businesses, this information is often relevant to customer social assessments. Therefore, reported data should remain consistent with actual employee records to avoid discrepancies during verification.
The core content of the Governance pillar
The Governance pillar answers two key questions: who is responsible, and what mechanisms are used? Its content typically covers the structure of the board of directors and executive management. It also explains how responsibilities for sustainability issues are assigned. The report should identify any dedicated ESG committee or department and describe reporting mechanisms to senior management.
The Governance pillar also covers the company’s internal policies. These may include business ethics, anti-corruption, information security, data protection, and conflict of interest policies. The report should also explain how the company manages environmental, climate, and other relevant risks. Internal controls over disclosed ESG data should also be described. Many companies already have these policies but have never organized them systematically. Therefore, much of the work involves systematization rather than developing everything from scratch.
Goals, commitments, and roadmap
A report that only presents past data may be considered static. Equally important to readers are the company’s future plans. These should include quantitative and time-bound goals. Examples include reducing energy intensity, increasing waste recycling rates, and lowering workplace accident rates. Each goal should have a clear baseline for comparison and specific implementation measures.
If the company has long-term commitments, the report should clearly define their scope. These may include carbon neutrality or net-zero emissions. The company should also explain how progress toward these commitments will be measured. Goals should be achievable and consistent with the company’s actual capabilities. Failure to meet unrealistic goals in later periods may reduce the credibility of the entire report.
Appendix, index table and verification statement
The final section of the report contains documents that help readers verify the disclosed information. If the company reports according to GRI Standards, this section usually includes the GRI content index. It lists each disclosure and its corresponding page number. This section may also include a summary of data from several years to show trends. It can explain the calculation methodology and emission factors used in the report. A glossary of abbreviations and contact information for stakeholder feedback may also be included. If an independent entity has verified the report, an assurance statement may be attached here. This statement should clearly describe the scope and level of assurance provided.
The appendix is often overlooked, but it can provide important supporting information. It helps reviewers determine whether the reported information is supported by reliable data and appropriate documentation. If your business is preparing its first ESG report, you should first assess the available data. The same approach applies when reviewing an existing report before publication. Businesses should determine whether sufficient data is available for each section discussed above. CCV supports businesses in identifying material issues, collecting data, and establishing appropriate data controls. We also provide GRI sustainability reporting services to help businesses prepare reports according to international standards.