What makes a good ESG report – and who are you really writing it for?

What makes a good ESG report – and who are you really writing it for?

It is no longer a question of whether companies report on ESG – but how. ESG reporting is no longer an add-on to existing business activities; it has become an integrated part of the strategic decision-making space. In that context, it is crucial to clarify the report’s real purpose. What actually defines a good ESG report? Is it enough to follow established frameworks and technical standards, or does it require a deeper understanding of the individual company’s business model, value chain and actual impact?

If ESG reporting is to be more than an exercise in compliance and expectation management, we must insist that it reflects reality – not just ambition. That requires not only methodology, but also reflection, courage and professional judgement.

What is a good ESG report?

We are living in a time where ESG reporting is no longer a voluntary extra. It is an expectation – and for many companies, a requirement driven by customers and business partners. EU regulation, particularly CSRD and VSME, sets clear requirements, and the market is following closely behind. Investors, banks, customers and employees are asking sharper questions, and the answers must be more than polished statements of intent.

As a result, ESG reports are being produced at scale. But the decisive factor is not whether a company has a report. The decisive factor is what the report actually does. So what defines a good ESG report? Is it one that simply follows the correct structure? One that presents the most charts? Or is it one that sets direction, demonstrates honesty – and is actually used?

Yes, frameworks matter. They must be followed. This is not optional, and that is a good thing. Structure ensures comparability, data quality and consistency. But far too many believe that this alone is sufficient. That a report is “complete” once the templates are filled and VSME or CSRD has been followed to the letter.

That is a mistake.

Because this is precisely where reporting risks collapsing under its own form. To create real value, an ESG report must be capable of much more than compliance. It must be reflective. It must be brave. It must be willing to articulate what is difficult. And it must be directly connected to the company’s core business – not as a parallel narrative, but as an integrated part of the overall strategy.

The gap between vision and reality

Many companies have strong ambitions. They want to position themselves as frontrunners – those who lead the way and set the standard for their industry. There is nothing wrong with that. Ambition is necessary.

The problem arises when ambition is not followed by action – or when the ESG report becomes a glossy version of reality. When the report highlights only what is going well and either downplays or omits the areas where performance is weak, a credibility gap inevitably emerges. This becomes a form of silent censorship, where imperfections are muted and successes are amplified.

But is reporting objective if only half the picture is shown?

If a company deliberately chooses not to disclose its most material challenges, the report loses its value – and ultimately its function. A good ESG report does not need to be perfect. It may openly show that the company is not yet where it wants to be – provided it acknowledges this honestly and explains how it intends to improve. That is where trust is built.

Who is the report actually speaking to?

One of the most common mistakes companies make is failing to ask the most fundamental question: Who is this report written for?

Is it the board which needs a clear assessment of ESG-related risks?
Is it the bank seeking to understand the company’s resilience and transition capability?
Is it customers and employees, who want insight into what the company is doing in practice?

An ESG report without a clearly defined audience often ends up speaking to everyone – and therefore to no one.

At the same time, many overlook the fact that a report is only as strong as the person writing it. ESG reporting requires technical competence, but it also requires deep industry understanding. It is not possible to produce a meaningful ESG report without understanding the company’s reality, value chain and business model.

ESG reporting is not just about structure – it is about judgement. And judgement fails when complex issues are reduced to automated language or generic template text.

An ESG report is not a writing exercise. It is a leadership act.

The board’s responsibility – and the part no one talks about

One area still receiving far too little attention is the role of the board. ESG reporting is often treated as something that simply needs to be “done” to look good. This is a fundamental misunderstanding.

ESG is a strategic discipline and must therefore be anchored at the top of the organization. The board carries overall responsibility for strategy and risk management, and ESG is increasingly integrated into both.

The board should not merely approve the report. It should actively engage with what the report is meant to achieve and how it is used.

The climate account – and the honesty of what is possible

One of the most technically demanding – yet strategically important – elements of ESG reporting is the climate account.

A climate account does not need to be perfect. It needs to be well considered, transparent and improvement oriented. That is where it becomes a strategic tool rather than a reporting obligation.

ESG is a tool – not communication

All of this leads to one clear conclusion. ESG is not communication. It is business. It is leadership. And it requires courage.

ESG reporting is not an end in itself. It is a tool for gaining insight, taking responsibility and moving in the right direction. And it does not start with templates. It starts with the willingness to tell the truth – even where that truth is uncomfortable.