How to Read (and Use) a Sustainability Report

Sometimes, the most revealing insights in a sustainability report come from what’s not said, rather than what is.

As internal employees, reading these reports matters - it signals that we care, that we’re paying attention. Beyond that, sustainability reports can be powerful tools for internal influence. We can use them to fact-check, initiate conversations amongst colleagues, and raise feedback or concerns to management in a constructive way. Ultimately, they allow us to connect strategic decisions to our company’s stated sustainability commitments - and to ask the right questions when those connections seem unclear.

When I was researching for my master’s thesis, I often found myself sifting through pages of green promises and ambitious projects, searching for something concrete. Metrics for measuring impact or tracking resource allocation were often in their infancy. That was six years ago.

Since then, the landscape has evolved dramatically. With the EU’s Corporate Sustainability Reporting Directive (CSRD), large companies are now required to report on sustainability impacts, risks, and opportunities using the European Sustainability Reporting Standards (ESRS).

This shift has brought structure, comparability, and digital accessibility to sustainability data. Digital tagging now makes it easier to search for information, and standardisation has raised the overall quality of reporting. It even sparked an unspoken competition among companies to produce the “best” sustainability report - until the EU narrowed the CSRD’s scope due to concerns about reporting burdens (cue the Omnibus Directive). Still, the vast majority of major players, including those spotlighted by Milieudefensie, remain within scope.

But let’s be honest: ESRS-aligned sustainability chapters can easily exceed 150 pages. And as the industry continues to define what’s truly material, these reports can feel dense and overwhelming.

That’s where this short guide comes in - to help you quickly identify the most important (and most telling) pieces of information.

What to Look For

1. ESRS 2 — General Disclosures

a. GOV-1: Governance & Oversight of Sustainability Matters

• Paragraph 23: Look for sustainability-related skills and expertise on the board.

• How are these described and evidenced - if at all?

• Are directors receiving sustainability training or bringing relevant experience to the table?
  
  

b. GOV-3: Incentives & Accountability

• Paragraph 29: Are management incentives linked to sustainability targets?

• If yes, which targets? And are they tied to performance evaluation or compensation? Based on which terms?
  
  

c. SBM-2: Stakeholder Engagement

• Were relevant external stakeholders engaged? If so, how and when? Consider the communities affected by the organisation’s activities.

• How were they selected, and how did their input shape the company’s double materiality assessment (DMA)?

• Were employees part of the process - and if so, how meaningfully?

d. SBM-3: Material Impacts, Risks & Opportunities

• Paragraph 48a: Review the results of the DMA. Do they seem reasonable, comprehensive, and consistent with your gut feeling (given the organisation’s operations)?

• Paragraph 48d: Look at disclosures about the financial effects of material risks and opportunities.

• Is there a narrative explanation, a quantitative figure, or both? Or was an exemption used?

• How are these financial effects described, and do they align with what’s in the financial statements?
  
  

2. Policies, Actions & Targets

Across these three categories, check whether:

• Someone is clearly accountable for delivery.

• Adequate (monetary) resources are allocated to achieve the targets.

• The commitments seem time-bound, measurable, and realistic.
  
  

3. Climate Targets

Pay close attention to which scenarios the company uses.

• Are they aligned with recognized pathways (e.g., IEA Net Zero, IPCC 1.5°C)?

• How ambitious are they compared to sector peers?

• Are interim milestones transparent — or does everything hinge on 2040 or 2050 targets?
  
  

4. Industry-Specific Metrics

Depending on your sector, certain ESRS disclosure requirements will be especially relevant:

• Finance & Insurance:

• E1-9: Climate Risks — Which climate scenarios are applied, and do the assumptions align with those in the financial statements?

• If the company has applied the phase-in option, why, and for how long?
  
  

• Energy & Utilities:

• Look for pricing assumptions, energy mix disclosures, and Scope 3 emission coverage.
  
  

• Manufacturing & Supply Chain:

• Pay attention to resource efficiency, circularity, and labor conditions in upstream operations.
  
  

And of course, there’s always room to expand this list.

For more specific information on the ESRS data-points and where to find which information, see the IG 3 List of Datapoints as an Excel Workbook, here: ESRS implementation guidance documents | EFRAG

What indicators do you look for in your industry? What red (or green) flags have you spotted?

Drop your insights below or reach out if you’d like to exchange perspectives.

Happy reading - and happy questioning!