How to write a sustainability report step by step

A sustainability report is the document a company uses to explain its environmental, social and governance (ESG) performance over a financial year: what impacts it creates, how it manages them and what results it achieves. Done well, it is not a marketing brochure but a report built on verifiable data that serves both to account to stakeholders and to inform internal decisions.

Report, non-financial statement and the new framework

The terms are often used interchangeably, but it helps to tell them apart:

• A sustainability report is the document, voluntary or regulated, that sets out a company's ESG performance over a financial year.
• The non-financial statement was the mandatory document for certain large companies under the NFRD (Directive 2014/95/EU), transposed in Spain by Law 11/2018. The NFRD has been repealed by the CSRD: sustainability reporting is now embedded in the management report under the European Sustainability Reporting Standards (ESRS). The timetable is set by Directive (EU) 2026/470, in force since 18 March 2026, which member states must transpose in March 2027.

The practical consequence: if your company falls within the scope of the CSRD, your report is no longer voluntary and must follow the ESRS. If it does not, you can keep publishing a voluntary report, usually under GRI standards.

The steps to prepare a sustainability report

1. Materiality analysis

The starting point is deciding what to report on. The materiality analysis identifies the environmental, social and governance topics that matter to your company and its stakeholders. Under the CSRD, this takes the form of double materiality: you must assess both how sustainability affects the business (financial materiality) and how the business affects people and the environment (impact materiality). The revised ESRS make this exercise more flexible with a top-down approach that starts from the most relevant topics instead of working through every datapoint. A voluntary GRI report needs, as a minimum, impact materiality.

2. Selecting indicators (KPIs)

Once the material topics are defined, you choose the sustainability indicators (KPIs) that will measure performance in each one. They should be quantifiable, comparable across years and traceable to their source. Common examples: greenhouse gas emissions by scope, water and energy consumption, recycling rate, diversity or workplace accident indicators. Our guide to the main ESG KPIs covers the most widely used ones.

3. Choosing the reporting framework

The framework sets the structure and the level of demand:

• ESRS: mandatory for companies within the scope of the CSRD. They cover general requirements, climate change, pollution, water, biodiversity, circular economy, social matters and governance. The delegated act with the revised ESRS was adopted on 3 July 2026 and cuts more than 60% of the mandatory datapoints, as well as removing voluntary disclosures. They apply to financial years starting on or after 1 January 2027, with early adoption possible for 2026 financial years.
• European voluntary standard: adopted the same day and based on the VSME, it acts as a cap on the information an in-scope company can request from the SMEs in its value chain.
• GRI: the most widely used voluntary standards worldwide, useful for companies outside the CSRD scope or reporting to international stakeholders.
• Complementary frameworks such as the ISSB standards (IFRS S1 and S2), aimed at investors, which absorbed the TCFD recommendations.

4. Data collection

This is the most labour-intensive phase. You need to gather data on energy, fuels, water, waste, purchasing, travel, human resources and the supply chain, from invoices, internal systems and suppliers. Data quality is critical: an indicator is only useful if its origin is verifiable. This is where specialised software saves the most time, by centralising sources and applying up-to-date emission factors. It pays to assign an owner to each data point, define the unit and period, and record the calculation method so the information can be audited later.

5. Drafting

With the data consolidated, you draft the document. A good report combines figures with context: publishing an emissions table is not enough, you have to explain the trend, the causes and the measures taken. The language should be clear, honest and free of greenwashing; every relevant claim must be backed by data.

6. Assurance

Under the CSRD, the sustainability report requires external assurance at a limited assurance level. Directive (EU) 2026/470 removed the planned move to reasonable assurance, so limited assurance is the settled requirement; the European limited assurance standard must be adopted before 1 July 2027. Even when it is not mandatory, independent third-party verification increases the credibility of the report with investors, customers and authorities.

Typical structure of a sustainability report

Common mistakes to avoid

• Reporting everything without prioritising. Without a solid materiality analysis, the report becomes long and irrelevant. Fewer topics, but material and well handled.
• Publishing figures without traceability. Data that cannot be audited undermines the credibility of the whole document.
• Confusing targets with achievements. Announcing ambitious goals without measurable results is one of the greenwashing signals regulators watch most closely.
• Leaving data collection until the end. It is the bottleneck; set up a continuous collection system throughout the year.
• Not comparing across years. The value of a report lies in the trend; without historical series it loses its usefulness for decision-making.

Frequently asked questions

Is a sustainability report mandatory?

It depends on the company's size and profile. After the Omnibus package (Directive (EU) 2026/470), the obligation to report under the CSRD focuses on companies with more than 1,000 employees and net turnover above €450 million, meeting both criteria at once. The first reports cover financial years starting on or after 1 January 2027 and are published in 2028. Companies outside that threshold can publish a voluntary report.

GRI or ESRS?

If your company is within the scope of the CSRD, the ESRS are mandatory. GRI remains the most widely used voluntary reference and is largely compatible with the ESRS, so many companies work with both.

How long does it take to prepare a report?

The first report usually takes several months, mainly because of the materiality analysis and data collection. In later years the process is shorter if a consolidated data system is in place.

Is external assurance required?

Under the CSRD, yes, at a limited assurance level, and that level is not set to rise to reasonable assurance. Outside that scope it is not mandatory, but it adds credibility and is advisable for reports aimed at investors.

Automate your report data

The most demanding part of a sustainability report is gathering reliable, traceable data. Manglai's carbon footprint software centralises your energy, water, fuel and waste consumption, calculates your emissions with up-to-date emission factors and helps you prepare the indicators required by the ESRS and GRI, so that drafting and assurance start from a solid base.