ESG (Environmental, Social, and Governance) reporting is no longer a voluntary movement. Most companies over a certain size now have mandatory ESG disclosure requirements, wherever they’re located.
For consultants, compliance teams, and sustainability advisors, this shift means getting serious about which rules apply, what data to track, and how to guide clients through the reporting process and come out compliant at the other end. Whether you’re supporting a multinational firm or a growing startup, understanding ESG reporting requirements is now mission-critical.
Let’s break down the ESG reporting requirements many companies are now facing.
Common types of ESG reporting standards and frameworks
Not all ESG frameworks are created equal. Some are voluntary. Others are mandatory. And many have evolved or merged in recent years to bring more clarity and consistency.
Most frameworks aim to make ESG information useful for investors and stakeholders. Here are the key ones to know:
International Sustainability Standards Board (ISSB) standards
The ISSB, developed by the International Financial Reporting Standards (IFRS) is working to build a global baseline for sustainability-related financial disclosures. Their first two standards—IFRS S1 (general requirements) and IFRS S2 (climate-specific)—draw directly from the now-disbanded Task Force on Climate-related Financial Disclosures (TCFD) and other frameworks.
More than 30 countries are considering adoption, including Canada (CSDS), Australia (ASRS), and Japan (SBBJ). For global businesses and consultants working across jurisdictions, the ISSB offers a helpful benchmark.
Corporate Sustainability Reporting Directive (CSRD)
CSRD is the European Union’s mandatory ESG disclosure law. It initially applied to more than 50,000 companies, but recent changes under the EU’S Omnibus Proposal will exempt approximately 80% of those companies initially expected to comply. The CSRD requires detailed, audited reporting on how sustainability risks impact business and how business impacts the environment and society (a concept known as double materiality).
Unlike older voluntary frameworks, CSRD initially set a much higher bar. This bar is likely to come down lower as a result of the Omnibus proposal, however, achieving CSRD compliance will still require companies to conduct double materiality assessments, collect granular data, and disclose across a wide range of sustainability topics.
→ Unsure what to do about recent CSRD changes? Read our take on it here.
California climate rule (SB 253 and 261)
California is raising the bar for climate transparency in the U.S. Two new laws—SB 253 and SB 261—require large public and private companies to disclose emissions (Scope 1, 2, and 3) and climate-related financial risks.
These rules apply to companies doing business in California, not just those headquartered there. At the same time, other states like New York and Colorado are moving in a similar direction, especially as the U.S. Securities and Exchange Commission (SEC) climate rule stalls in Washington.
Task Force on Climate-related Financial Disclosures (TCFD)
The TCFD no longer exists as a standalone framework, but its legacy lives on. It helped define best practices for climate-related disclosures and now forms the backbone of ISSB’s IFRS S2 standard. Many companies still use TCFD as a structure for climate risk reporting, especially in voluntary contexts.
GRI and SASB
The Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) were early players in the ESG reporting world. GRI focuses on broader impact and stakeholder reporting, and is still widely used for this purpose. SASB is geared toward investor-facing disclosures, and the SASB standards now make up the bulk of what is required for ISSB disclosure. Together, GRI and SASB shaped the ESG landscape, and can still serve as helpful tools for companies not yet subject to mandatory rules.
What are the requirements for ESG reporting?
There’s no one-size-fits-all checklist. Requirements vary by region, industry, and whether the reporting is mandatory or voluntary. But here’s what most ESG frameworks have in common.
Stakeholder engagement and materiality assessment
Stakeholder engagement is a foundational part of effective ESG (Environmental, Social, and Governance) reporting. To identify what matters most in their disclosures, companies need to actively engage with the people and groups who are affected by or have influence over their operations—this includes investors, employees, customers, suppliers, regulators, and community members. The goal is to understand which sustainability issues are most significant from both a business and societal perspective.
This process is often referred to as a materiality assessment. Companies use it to pinpoint the ESG topics that are financially material (i.e., likely to impact business performance) as well as those that are societally material (i.e., significantly affecting people or the environment). Some frameworks, like the CSRD, require companies to perform double materiality assessments that account for both. By identifying what truly matters to stakeholders, companies can ensure their ESG reports are not only compliant but also relevant, focused, and credible.
Effective stakeholder engagement also builds trust. It signals that the company is listening, adapting, and genuinely committed to sustainable business practices. Over time, this dialogue can shape ESG priorities, guide strategy, and strengthen relationships with regulators, investors, and other key audiences.
Regulatory and compliance requirements
Mandatory rules—like CSRD or the California climate laws—require strict alignment with defined standards. Voluntary frameworks (like GRI or TCFD) offer flexibility but still demand rigour.
The bottom line: Companies need to know which rules apply and ensure their disclosures meet those specific requirements. A mismatch could result in compliance failures or missed opportunities to build trust.
Third-party assurance and verification
As ESG reporting becomes more detailed and standardized, companies are facing increased pressure to ensure the information they disclose is accurate, trustworthy, and defensible. That’s where third-party assurance and verification come in.
Third-party assurance refers to an independent review of ESG disclosures by an external auditor or specialist. While not always legally required, assurance is becoming best practice, especially for companies subject to frameworks like CSRD, which require assurance for certain disclosures. Independent verification adds a layer of credibility and helps mitigate the risk of greenwashing, which can damage a company’s reputation and invite regulatory scrutiny.
Beyond compliance, assurance provides tangible benefits internally. It can help companies identify weaknesses in their data collection processes, improve internal controls, and build confidence with investors and stakeholders. It also prepares companies for more rigorous audits in the future, particularly as regulatory expectations continue to evolve.
Ultimately, assurance is about trust. In a space where ESG claims are under increasing scrutiny, third-party verification gives stakeholders confidence that a company’s disclosures are grounded in reliable data and aligned with recognized standards.
What kind of ESG data might be required in disclosures?
Once material topics and frameworks are defined, companies need to report data across all three ESG pillars.
Disclosure of environmental impact
Environmental impact data typically includes greenhouse gas (GHG) emissions across Scopes 1 and 2, and sometimes across Scope 3. Environmental and climate data may also include information on energy consumption and sourcing, water use and waste management, and exposure to physical and transition-related climate risks.
Social responsibility metrics
Data on social responsibility can vary widely depending on the company’s business model, but may include metrics such as workforce diversity and inclusion, pay equality, employee health and safety, human rights due diligence, and community engagement and impact.
Governance and ethical practices
There is no ESG strategy without proper governance. Governance disclosure requirements typically ask for information on board composition and oversight, executive compensation policies, anti-corruption measures, and ethical decision-making frameworks.
How consultants can effectively navigate ESG reporting
If you’re an ESG consultant or advisor, your clients are counting on you to help them avoid missteps. Here’s how to guide them through the ESG reporting process.
Step 1: Identify ESG reporting obligations
Start by figuring out which rules apply based on company size and location, industry-specific risks, and, importantly, the expectations of your client’s investors and other stakeholders. Most large companies will be subject to multiple standards. Others may seek to start with voluntary disclosures to prepare for future mandatory reporting requirements (a smart strategy).
Step 2: Establish ESG data collection processes for the year in question
Help your clients map out key performance indicators (KPIs) and material ESG metrics early. Make sure they have robust data collection systems in place for tracking Scope 1, 2, and 3 emissions. Help them evaluate and implement tools that bring ESG data into one location and reduce manual data entry. As much as possible, encourage clients to align sustainability reporting with existing financial reporting—stick to the same timeframes and try to reuse as many of the processes, systems, and even people as you can.
Step 3: Conduct an ESG gap analysis
In the early days of your relationship with a client, it’s important to lay the foundations by assessing what’s missing—whether it’s data, policies, or procedures. A good gap analysis will benchmark their current performance against industry peers and the expectations of disclosure standards, help clients understand regulatory and reputational risks around disclosure, and point them in an obvious direction for taking those first steps.
→ Getting started with CSRD? Here’s how to conduct a CSRD gap analysis.
Step 4: Develop ESG reports and disclosures
Clients will probably need your help writing clear, consistent reports that follow the standards and speak to your audience. For annual sustainability reports, focus on improving comprehension by presenting only the most material data in clear, visual formats. For more specific disclosures, use software tools that can quickly surface best-practice examples for particular line items, as well as tools that can help generate audit-ready documents for the particular standard you’re disclosing to.
Step 5: Ensure ESG assurance and audit readiness
The assurance process can be a headache or a breeze, depending on how prepared you are. Help your clients get audit-ready by keeping a clean audit trail when collecting and reporting on ESG data. Make sure all claims are linked to source documents and that all data is traceable and defensible. Also, conducting a first-pass compliance review with an AI tool is a great way to improve compliance before getting assurance teams involved.
Step 6: Continuous improvement and stakeholder engagement
ESG reporting never stops. At least — it shouldn’t. Help your clients maintain momentum in their ESG efforts and reporting by setting clear short-term and long-term goals, setting up dashboards and monitoring systems to review progress regularly, getting stakeholders involved and invested in ESG outcomes, and continually updating reporting and data collection processes based on the ever-changing regulatory environment.
Make your ESG reporting hyper-efficient with Manifest Climate
Getting ESG reporting right isn’t easy, but it doesn’t have to be slow or stressful.
Manifest Climate makes it faster to spot gaps, verify data, and align with evolving standards like CSRD, ISSB, and more. Our AI reads ESG reports, flags issues, and helps teams stay on track, whether you’re preparing a first report for a client, helping clients to scale an already mature compliance program, or adding new frameworks and standards to the reporting mix.
If you’re helping others navigate ESG requirements—or doing it yourself—Manifest Climate gives you the clarity, speed, and confidence to get it done right.
Book a demo to see how Manifest Climate can help.
