Sustainability reporting: Measuring and communicating to drive growth

Financial reporting has always played a central role in corporate decision-making. Through established processes for collecting, measuring, and presenting data, reporting provides valuable information for assessing a company’s financial health, the effects of past decisions, and promising paths for growth, helping entrepreneurs and managers preserve the company’s financial and economic sustainability. Therefore, reporting is much more than an administrative requirement: It is a fundamental process for allocating resources and making informed decisions.

In recent years, the scope of reporting has expanded, bringing about a veritable cultural revolution in the field. Alongside financial results, many other data points have gradually become features of the reporting landscape: information on energy consumption, emissions, safety, human capital, supplier relationships, and governance quality. In addition to all this, in Europe, sustainability is garnering greater attention, to include its environmental, social, and governance dimensions and its impact on financial and economic stability. This concern has culminated in the well-known Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS), designed to regulate extensively (and perhaps excessively) sustainability reporting requirements and processes. More recently, the Omnibus package has narrowed the range of companies subject to mandatory reporting and simplified the standards, seeking a balance between transparency and competitiveness.

Despite the importance of reporting nonfinancial information, many companies, particularly small and medium-sized enterprises (SMEs), are outside the scope of these requirements. Yet even when reporting is not mandatory, it can create opportunities. Consider the fact that what stakeholders need to know does not necessarily align with what the law requires. For instance, a major customer at the head of a supply chain wants to understand its suppliers’ environmental and social reliability; a bank needs to assess exposure to energy and climate risks; a qualified young professional considers the working conditions a company offers and whether it’s committed to achieving sustainability goals. Being able to meet these information needs makes organizations more aware of the relative impacts and risks, potentially opening up opportunities that would otherwise remain out of reach.

However, many companies still perceive the sustainability transition more as a risk than an opportunity. Case in point: According to the European Investment Bank’s 2025 survey, only 27% of European companies view the transition toward stricter climate standards as an opportunity, compared with 36% that see it as a risk. Sustainability reporting can help change this perception by enabling businesses gain a better understanding of both sides of the coin.

Effective reporting begins with measurement. Stating an intention to reduce environmental impact means little unless a company tracks its energy consumption and emissions per unit produced; claiming to care about employees carries little weight if the company doesn’t monitor workplace accidents, turnover, and training. Metrics turn broad intentions into verifiable objectives. They also reveal connections between financial and nonfinancial dimensions that traditional accounting and reporting may only partially capture.

Data on the environment, human and social capital, and governance become truly useful when incorporated into budgets, investment decisions, and management control systems. In this way, such input contributes to a more sustainable economy over the medium to long term while creating opportunities for growth and financial and economic sustainability, particularly for SMEs.

A small or medium-sized enterprise with robust sustainability indicators can break into more demanding supply chains, engage more effectively with banks and investors, support innovation projects with reliable data, and shore up its appeal as an employer. What’s more, it can turn external demands, often perceived as a cost, into valuable business knowledge. The advantage doesn’t come from the report itself, but from the awareness the company develops by producing it. In other words, the benefit springs from the processes as well as the results.

But measurement alone is not enough. The value of information also depends on how it’s communicated, keeping in mind that different audiences have different needs. For instance, customers seek supply chain data, banks focus on risks, employees are attuned to working conditions, and communities are interested in local impacts. A good sustainability report provides material information to different stakeholders while preserving credibility and avoiding information overload. The key to compiling such a report lies in the concept of double materiality: impact materiality (the company’s effects on the outside world) and financial materiality (the outside world’s effects on the company). The starting point should be the issues that matter to the company and its stakeholders; these issues should be reflected in understandable metrics that are chosen in consideration of their collection costs, which should be proportionate to their value. The European standard for voluntary sustainability reporting is moving in this direction.

New technologies, including artificial intelligence, can facilitate reporting processes, provided that data quality and accountability are always properly managed. This is where the sustainability and digital transitions—the so-called twin transition—converge. On the one hand, digital technologies can facilitate data collection and processing; on the other, sustainability helps manage energy consumption, impacts on employment, and the risks associated with digital transformation. For smaller companies, often quick to innovate but constrained by limited resources, pursuing these two paths in tandem is particularly crucial.

To sum up, reporting can serve as a bridge, translating complexity into traceable data, data into actionable information, information into decisions, and decisions into opportunities for growth and greater financial and economic sustainability.

This article is also available (in Italian) in Repubblica Affari&Finanza as part of the joint initiative Idee per la Crescita . In addition to Annalisa Prencipe , participants in the event dedicated to sustainability reporting included Carlotta Ventura , Chief Communications, Sustainability and Regional Affairs Officer at A2A, and Lorenzo Solimene , Partner at KPMG Sustainability Services. Click here for all the other articles and videos from the event .