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Sustainability reporting: What companies need to know

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Why sustainability reports are becoming increasingly important

(Corporate) sustainability reports are the further development of the former environmental reports. They complement a company’s annual report and are a key element of its information policy. 

Relevant stakeholders such as customers, investors, banks and business partners increasingly expect transparency around issues of sustainability. Sustainability reports are an important tool for companies to show how they deal with environmental, social and governance (ESG) topics, convey their sustainability strategy transparently and build trust.

At the same time, these reports enable systematic analysis of a company’s own value chain and business activity. For example, they allow companies to identify opportunities and initiate targeted changes towards more sustainable and efficient structures and processes. A well-compiled report, therefore, is not only an instrument of communication, but is also a strategic control mechanism for internal transformation. As such, companies can improve their competitiveness and set themselves up for the future.

What makes an impactful sustainability report?

  • Materiality assessment and IROs: The double materiality assessment is a key component of future-proof sustainability reporting. An essential element of the materiality assessment is the identification of company-specific impacts, risks and opportunities (IROs).
  • Profile, vision and strategy: The report clearly sets out what the respective company represents – “Who are we?”, “What do we stand for?” and “How do we realise our sustainability strategy?”
  • Goals and measures: What has the company achieved in the areas of environment, social responsibility and governance (ESG) in the last business year? What goals does it have for the coming business years?
  • Figures, data, progress: A good report will contain clear quantitative sustainability metrics and show how they have developed in comparison with previous years.
  • Management systems and risks: How is sustainability managed within the company and how does it deal with risk? 

The CSRD presents major challenges for companies

The EU’s Corporate Sustainability Reporting Directive (CSRD) expands direct and indirect reporting obligations significantly. Companies that are subject to mandatory reporting must publish a sustainability report in line with the European Sustainability Reporting Standards (ESRS Set 1) as part of their annual business report. This is no small task: with over 1,000 data points across more than 300 pages, it’s a major challenge for many.

The requirements are complex and gathering the data can be time-consuming. How much the demands have risen is indicated by a study by the Sustainability People Company from June 2025, in which two thirds of the sustainability managers asked revealed they now have much more to do than three years ago.

Free tool for sustainability reporting

This is precisely where the Sustainability Code (DNK) comes in: instead of the previous reporting standard, since August 2025 the DNK now offers a comprehensive range of support services that simplify reporting for companies and their sustainability staff. They are aimed at both companies that are obliged to report under the CSRD – either directly or indirectly – and those who wish to report voluntarily based on the new VSME. At the heart of our services is the free tool for digital reporting: the DNK Platform. This guides you step by step through the reporting process, saving you time and effort. The DNK Checklists integrated in the platform help you find your way around. They contain the data points of ESRS Set 1 and VSME in clear and comprehensible form, indicate mandatory and optional input, and simplify complex formulations and technical terms.

Check out the DNK Platform

When companies have to produce a sustainability report

For certain companies, sustainability reporting is a legal obligation. Whether or not this applies to your business depends on various EU standards. You can find out more in the following articles

But even if they are not directly obliged, many companies decide to report voluntarily in line with the VSME: