New BARC report: “The State of ESG and Sustainability Reporting”

ESG reporting has become an essential tool for organizations aiming to maintain a positive image with their customers, employees, and business partners.

BARC's latest report, The State of ESG & Sustainability Reporting - Challenges and Recommendations for 2025, examines these developments and compares customer experiences across different geographic regions, organizational structures and technical implementations.

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Let's explore the report's key findings and gain insights on how to improve your ESG reporting. 

 

ESG reporting frameworks: What's trending

Companies are adopting different ESG reporting frameworks to meet regulatory and stakeholder expectations. The European Sustainability Reporting Standards (ESRS) lead the way, with 68 percent of respondents adopting them. This is followed by the Global Reporting Initiative (GRI) at 28 percent and the IFRS Sustainability Disclosure Standards (IFRS SDS) at 23 percent. Regional preferences vary widely, with Europe favoring ESRS (74 percent), North America leaning toward GRI (50 percent) and SASB (38 percent), and the rest of the world showing mixed adoption of IFRS SDS and Sustainable Development Goals (36 percent).

These differences underscore the need for multinational organizations to adapt their reporting tools to meet different regional requirements.

How many companies are working on their first ESG reports?

ESG reporting continues to gain momentum. By 2023, 42 percent of companies will have published their first ESG report, with another 20 percent planning to do so by 2024. This means that 62 percent of companies are expected to have ESG reports by next year. However, 11 percent of companies have no plans to publish such reports, indicating that there is room for growth in awareness and commitment. The banking and finance sector is leading the way, with 67 percent already engaged in ESG reporting by 2023.

What are the key drivers for ESG reporting?

Customer reputation stands out as the primary driver for ESG reporting across all sectors and company sizes. Regulatory compliance and improving internal processes are also significant motivators for companies to adopt ESG reporting.

The biggest challenges of ESG reporting

ESG reporting faces numerous challenges that impact its effectiveness and accuracy. While 6 percent of organizations report no significant issues, 94 percent struggle with various obstacles such as:

• Lack of resources is the main challenge. This includes a lack of both financial and human resources, particularly skilled staff for specialized functions. 
• Too many different data sources further complicate the ESG reporting process.  
• Unreliable data: Data quality and lack of reliable data is also one of the main reasons that affect ESG reporting processes. 
• Manual processes significantly increase the risk of errors and delays. 
• Lack of cohesion: ESG reporting is a new methodology, which means that companies need to increase their understanding and awareness of the topic in order to ensure better collaboration between the different departments that need to report on their metrics, leading to the key ESG reporting requirements. 

What are the benefits of ESG reporting?

ESG reporting offers numerous benefits that can significantly enhance a company's overall performance and reputation. By integrating ESG principles, companies can drive positive change and achieve sustainable success such as the key benefits listed below:

• Transparent reporting: ESG reporting enables a transparent and stakeholder-focused reporting  
• Organizational reputation: ESG reporting further enhances the organization's reputation with customers and potential employees, and positively influences their decision-making now and in the long run. 
• Continuous improvement: Having a good sense of ESG metrics can lead to driving continuous and company-wide improvement in sustainability and governance 
• Operational efficiencies: Adopting ESG reporting principles results in operational efficiencies, enhanced performance, reduced wastage and improves a company’s overall competitiveness in the market 
• Sustainable growth: Investors that are ESG-aware are more interested in staying invested in value-based businesses that are keen on sustainable, long-term growth.

 

Why improving your ESG reporting needs a strategic approach

Improving ESG reporting requires a strategic approach to ensure accuracy, consistency and transparency. This includes strengthening data management, adopting standardized frameworks, and fostering collaboration, ultimately leading to better decision-making and sustainable growth.

Key recommendations include: 

• Invest in data management: Efficient data integration solutions and advanced management systems can streamline processes and improve data accuracy and reliability. 
• Standardized reporting frameworks and automated tools: Implementing these can ensure consistency, accuracy, and transparency, enabling better decision-making and building stakeholder trust. 
• Measure the economic benefits of ESG activities: Deeply integrate ESG metrics into financial analysis to better capture and communicate the financial impact of sustainability initiatives. 
• Employee training: Developing internal expertise through comprehensive training programs is critical to effectively managing and analyzing ESG data. 
• Collaboration with external experts: Leveraging external expertise can accelerate the ESG reporting process. 
• Collaboration with supply chain and business partners: Strong collaboration can lead to more cohesive and effective ESG strategies, which are essential for meeting regulatory requirements.

 

The time to invest in robust ESG reporting processes is now

The BARC report underscores the critical importance of ESG and sustainability reporting in today's business environment. As companies navigate the complexities of multiple frameworks and regional requirements, the insights from this report provide a valuable roadmap for achieving transparency, compliance, and continuous improvement in sustainability efforts. Now is the time for companies to invest in robust ESG reporting processes to ensure they are well prepared for the future of sustainable development.

Ready to dive deeper into the findings? Download the full BARC report now and take the first step towards comprehensive ESG reporting. Join the growing movement towards a more sustainable and transparent business landscape.

 

Download BARC ESG report