The Future of Reporting

Mar 31, 2021 | Articles, Monthly Briefing

In the last few years, sustainability reporting has accelerated into mainstream business practice. Once a voluntary exercise, done by a few leading companies as a show of accountability and transparency to stakeholders, reporting on sustainability today is driven by growing regulation and demands from investors who are increasingly interested in the connectivity between ESG factors and enterprise value.

As the practice of corporate sustainability reporting has grown, so too has the landscape of sustainability reporting standards and frameworks. The current state is one of fragmentation, with various actors jostling for influence as they strive to improve the status quo. One of the main challenges for companies preparing reports, is keeping up with the numerous developments in the global sustainability reporting landscape.

To help our clients navigate this complex and changing landscape, Corporate Citizenship has reviewed the latest reporting trends and interviewed leading sustainability reporting experts, to develop a vision for sustainability reporting in 2030. Our hope is that this will help companies focus their efforts on moving towards a future state where sustainability reporting will be a meaningful and useful exercise for report preparers and report users alike.



The primary purpose of a sustainability report, is to communicate relevant and useful information to stakeholders, in order to empower decision-making. From a report preparer’s perspective, the aim is also to build understanding, engagement and trust with stakeholders. With this purpose in mind, we believe that five key developments will shape the future of sustainability reporting by 2030.

  1. Convergence of standards and frameworks

While the alphabet soup of sustainability standards and frameworks is likely to get messier before it gets better, we anticipate that there will be a consolidation of the main global standard setters and a convergence of approaches to sustainability reporting.

In 2030, companies can expect that they will be reporting based on a dominant, widely accepted global sustainability standard. Whether these standards are based on double materiality[1] or take a narrower approach to focus on financially material sustainability impacts, remains to be seen. Which standard-setting organisation becomes the dominant global force will also be related to regulation, as we describe in the next key development.

As stated in the trends covered in Corporate Citizenship’s 2021 Actions for Business, there are already some signals of convergence. Last year, the main sustainability reporting standards (CDP, CDSB, GRI, IIRC and SASB) released a joint statement on their vision to work together towards a more coherent global sustainability reporting system. The IIRC and SASB also announced their merger to create the Value Reporting Foundation by the middle of 2021. A further key development has been the International Financial Reporting Standards (IFRS) Foundation – which sets the common rules so that financial statements can be consistent, transparent, and comparable around the world – entering the sustainability reporting conversation and proposing to establish a Sustainability Standards Board (SSB).

We asked Tim Mohin, Executive Vice President and Chief Sustainability Officer at Persefoni (formerly CEO of GRI), for his view on convergence among the sustainability reporting standards. He shared, “Just like with the IFRS and financial reporting 20 years ago, there will be standardisation of the global sustainability reporting landscape. The IFRS has garnered significant support for taking on sustainability standards. At the same time, the European Commission is considering a European Standard Setter (ESS) for sustainability topics. And there is a possibility that China develops its own standards. While no-one knows the outcome, it’s clear that sustainability disclosure will be mandatory and integrated into financial reporting.”

  1. Mandatory reporting requirements

In the last decade, there has been substantial increase in sustainability reporting regulations issued by government bodies around the world (Carrots & Sticks 2020 Report). While regulation alone is insufficient, it is necessary in almost every market to garner action across the private sector as a whole. With less than a decade left for national governments around the world to achieve the Sustainable Development Goals and ensure that we are on track to commitments in the Paris Agreement, we believe that this trend will continue to accelerate.

In 2030, companies should expect that mandatory reporting will become commonplace across all major global markets. The initial focus of regulations on sustainability reporting will be on climate change. Mohin shared his view on this, commenting, “With any rapidly maturing market, it is hard to separate signals from noise. But the signal is very clear that climate and its impacts will be regulated. Mandatory disclosure of emissions is only a first step. We can expect mandated emission reductions and new carbon trading markets. In addition to regulation, investors are demanding carbon disclosure from their portfolio companies.” He further added that companies should “get started early” and not wait to be hit by a costly scramble for compliance down the road.

Recent examples of regulatory moves:

  • Since 2018, the EU’s non-financial reporting directive (NFRD) has required large companies to disclose information on the way they operate and manage social and environmental challenges. In February 2021, the European Financial Reporting Advisory Group (EFRAG) published a report proposing a roadmap for the development of a comprehensive set of EU sustainability reporting standards.
  • In February 2021, the U.S. Securities and Exchange Commission (SEC) issued a statement directing the Division of Corporation Finance to “enhance its focus on climate-related disclosure in public company filings”.
  • In the UK, the Government announced its intention to move towards mandatory TCFD-aligned disclosures across all sectors of the UK economy over the next five years, in an Interim Report published in November 2020.
  • Most major markets in Asia-Pacific have taken steps toward mandating or encouraging disclosures in some or all aspects of ESG for many years. One of the more recent additions is the China Securities Regulatory Commission (CSRC), which has introduced mandatory broad ESG disclosures for all listed companies and bond issuers in 2020.
  1. Integrated reporting

Having an annual report that doesn’t reflect sustainability information in the context of a company’s ability to create value, will become something of the past. In 2030, a company’s annual report, as the main document of reference for stakeholders, will need to tell an integrated story on value creation, showing the connectivity between sustainability and financial information. This won’t meet all stakeholders’ needs, as investors are the primary audience for annual reports, and additional reporting on some topics for other audiences will remain necessary.

Today, integrated reporting is still a relatively new practice and has its challenges. Many companies have embraced it, but there is a large spectrum of how this has been done. This is largely due to the fact that truly integrated reporting first requires integrated thinking, and the new language and approach take time and effort for management teams to adopt. To move toward better integrated reporting, developments such as the IIRC and SASB integration will hopefully bring more practical guidance and alignment.

Janine Guillot, CEO of SASB, recently shed some light on how the merger of the two standards will help in pursuit of this objective. According to Guillot, “the <IR> Framework drives a holistic view of the value creation process through governance and business model disclosure, and the connectivity of information, while SASB Standards add comparability to sustainability-related data across peer companies.” More information on how SASB Standards and the <IR> Framework complement each other and will potentially work together, can be found on SASB’s blog.

United Utilities has been reporting on its corporate responsibility for over two decades, and moved to adopt integrated reporting in its 2015 Annual Report. We spoke to Chris Matthews, Head of Sustainability at United Utilities, to get his view on the value of integrated reporting. Matthews shared that, “Integrated reporting just made sense, as a separate report sends the wrong message to stakeholders internally and externally by separating sustainability from business strategy.” He added, “Reporting is about establishing legitimacy. Companies should be communicating how they are creating value for everyone, not just investors.”

  1. Audience-led

Sustainability reporting in the future may be mandated, but its value is far beyond compliance. Reporting represents an opportunity to engage stakeholders on issues that matter to them and in ways that resonate with them. Like any good communications exercise, it should start with a clear definition of who the target audience are and understanding what matters to them.

In 2030, we can expect to see more targeted audience-led sustainability reporting, and communications happening through a multi-channel approach rather than a single sustainability report. Companies will have to get to grips with the fact that, as reporting has become more mainstream, stakeholders have also become more sophisticated and their needs have evolved, in some cases requiring in-depth details on a company’s approach to managing a specific topic. A one-size-fits-all approach simply can’t meet the diverse needs of stakeholders.

Leading businesses have already started to tailor their approach, developing communications with specific audiences in mind. Matthews also commented on this point, acknowledging that not all stakeholders read United Utilities’ integrated annual report, so the company also seeks to translate its sustainability story for specific audiences. One example of this is a booklet on the company’s community activities for stakeholders more interested in that topic. Building on this point, Matthews pointed out the need to “tell your story in a way that will be consumed”. Producing a long document that nobody reads, defeats the purpose. He also added, “When people read the report, it has to be authentic and not just PR. People will think more of you if you are open about the challenges and the difficulties your business faces.”

  1. Digitalisation of reporting

The way we live, work, learn and share information is being transformed through technology and digital capabilities. It is time that sustainability reporting caught up. From the data systems unpinning the content of the report, to how the output itself is presented and analysed, digitalisation is set to revolutionise sustainability reporting.

In 2030, we can expect that AI and data analytics will be sufficiently advanced to support the slicing and dicing of data, to get customised views on a wide variety of topics. Reporting data will be available in multiple digital formats, suited to user needs to allow for greater searchability and comparison. We will also see the development of digital taxonomies to help standardise sustainability information and make it easily accessible for analysis. SASB recently released its own digital taxonomy using XBRL for public comment. Previous versions of the current GRI Standards have also looked to use XBRL format.

A few leading companies are already embracing online and digital reporting formats. In an article written for Corporate Citizenship, Jonny McCaig, Global Reporting Director at Unilever, talked about how the company has embraced online reporting. “Several years ago, we moved to a digital-first sustainability reporting approach, to help achieve this. Our aim is to provide our audiences with content organised around the Unilever Sustainable Living Plan, in an engaging format not dissimilar to a good-quality online newspaper.” McCaig went on to add, “We want our reporting to work on two levels: firstly, as an easily searchable and navigable information repository for those audiences who are looking for detailed information on our most material issues and a transparent account of progress against our sustainability commitments; and secondly as a visually rich content hub, to help people make decisions – whether that’s to apply for a job, to buy one of our products or simply to put their trust in us.”

[1] Considering both what is financially material for enterprise value, and what is material based on a company’s significant impacts on society and environment.

Looking to make your sustainability report future-fit?

To help our clients understand where they stand on sustainability reporting currently and how they can move their reporting practices forward with this vision in mind, we have created a map for the sustainability reporting journey.