In 1987, the United Nations defined “sustainability” as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Since then, the term sustainability has become a common topic with governments, regulators, and industry groups around the world making sustainability reporting an annual corporate obligation.
Without doubt, the trend is set to continue. As the climate change and ecological crises become more apparent across global and national societies, corporate sustainability reporting requirements will simultaneously increase year on year.
This is certainly true across the GCC Countries such as Oman / UAE / KSA. In Oman for example, publicly traded companies have recently moved from a voluntary sustainability (ESG) reporting requirement in 2024, to a mandatory requirement in 2025, following similar directives in the UAE for example.
Sustainability reporting is related to the assessment and disclosure of their Environmental, Social and Governance (ESG) performance. The assessment is a broad technical analysis of topics ranging from carbon emissions and board diversity to data protection policies and waste management practices.
Why is sustainability reporting important?
An ESG report is first and foremost a transparent message to stakeholders on the company’s ESG initiatives, outcomes and commitments to ensuring their company understands the risks and opportunities related to environmental and social topics around the world. However, a well-thought out ESG assessment and reporting process provides the opportunity to develop strategies that strengthen a companies operations, business model, and stakeholder relationships. Common outcomes of an ESG assessment and reporting process involve things like finding opportunities to reduce energy consumption, lowering waste production (and increasing circularity in a company’s operations), increasing employee satisfaction, development of new products / business lines, increasing brand recognition, development of new investment opportunities, and so forth.
Thus, the reporting mechanism, as intended, triggers foresight to identify risks and opportunities, optimize operational efficiency, including cost savings, and increase overall business resilience as a result. In an increasingly uncertain world, companies who proactively engage with this process, whether it is mandatory or not, are paying themselves a strategic advantage in terms of market competitiveness, compliance with reporting regulations and risk preparedness.
But, what does Environmental, Social and Governance (ESG) mean in practice?
The acronym ESG is repeated over and over again, but what does it mean in practical terms for your business? What types of things do you have to assess and prepare for?
Firstly, it is important to understand that each report will assess different ESG topics depending on what is important, or “material” to your business. A foundational part of the reporting process requires a formal assessment, called the materiality assessment, using systematic global frameworks to identify what topics are to be included in your sustainability strategy and what is to be reported on.
For now, as a general guide, here is an overview of what each pillar of the sustainability report includes.
● Environmental – How a company impacts the planet. This includes carbon emissions, energy use, waste management, biodiversity, and climate risk strategies.
● Social – How a business interacts with people, be that employees, customers or communities. It covers diversity & inclusion, labor rights, health & safety, and community engagement.
● Governance – Assessing the rules and practices that guide a company’s leadership and decision-making processes. This includes transparency, ethics, board diversity, anti-corruption measures, and compliance with regulations.
Those topics have many (many) different sub-topics that may or may not be relevant to the reporting company. Thus, the materiality assessment helps to identify and justify what will be included in the ESG assessment and report.
After the materiality assessment, the reporting company then must assess their compliance (or non-compliance) with those material topics based on the specifications outlined in the relevant ESG / Sustainability Standard which they are responding to. These standards include, for example, the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB) - which are covered in our next blog piece on the sustainability reporting requirements in Oman.
After ensuring compliance with those metrics and material topics, the reporting process involves documenting the methodology, supporting documentation, and outcomes of the assessment, along with in depth descriptions of key performance indicators. Moreover, ESG reports (and separately ESG frameworks and strategies) often outline current barriers, future commitments, and the plan / roadmap to enhancing and strengthening the reporting company’s ESG commitments.
How Three Pillars Consulting support sustainability reporting
We know the sustainability reporting world can seem daunting. There are many things to consider that are both technical and detailed and the rules are continually evolving. Three Pillars Consulting (and their ClimateTabTM software) try to make this process as simple as possible, working with large and small businesses, we identify risks and develop opportunities in climate change, environmental management and sustainability to meet reporting requirements.
Our services are a comprehensive package from start to finish and beyond. Our expert team provide:
● ESG Reporting & Compliance: Ensuring reports meet your disclosure and regulatory requirements and align with global standards.
● Expert Team Analysis: Identifying what your company needs and how your company will implement ESG metrics into its operations.
● Specialty Services: Greenhouse Gas (GHG Accounting), Decarbonization Road-mapping, Life-Cycle Assessments and all technical matters needed for your report.
● Long Term Value: Identifying both risks and opportunities to build you a sustainability strategy that drives business resilience, reputation, and value for the long haul.
Contact Us Here for ESG reporting made simple.
