What is the difference between ESG reporting and sustainability reporting?
ESG reporting and sustainability reporting are related but distinct practices. ESG reporting is a structured, data-driven disclosure of environmental, social, and governance metrics aimed primarily at investors and regulators. Sustainability reporting is a broader term that includes narrative communication of a company’s environmental and social impact for a wider audience of stakeholders. In practice, many companies now produce both, and the line between them is narrowing as regulation tightens. The sections below unpack the key differences across frameworks, audiences, legal obligations, and practical decisions.
Which standards and frameworks govern each type of reporting?
ESG reporting is governed by structured, investor-facing standards such as the ISSB’s IFRS S1 and S2, which have become the global baseline for investor-grade sustainability disclosure. Sustainability reporting is most commonly guided by the GRI Standards, which prioritize impact materiality and are used by a broad range of organizations to communicate their environmental and social performance to multiple stakeholder groups.
A useful distinction is that frameworks define what to report and why, while standards prescribe the specific metrics and data points that must be measured. The two operate together, but they serve different purposes.
In the EU, the regulatory picture is more specific. The European Sustainability Reporting Standards (ESRS) are mandatory for companies in the scope of the Corporate Sustainability Reporting Directive (CSRD). ESRS is unique because it requires “double materiality” – companies must disclose both how sustainability issues affect their own financial value and how their activities affect society and the environment. This dual lens goes further than investor-only frameworks such as ISSB.
Among the ESRS topical standards, ESRS E5 on Resource Use and Circular Economy is particularly relevant for companies in the food and packaging supply chain. It requires disclosure of recycled content, recyclability rates, resource inflows including packaging materials, and waste by treatment method – data points that packaging choices directly generate or constrain.
What does ESG reporting actually measure?
ESG reporting measures a company’s environmental, social, and governance performance using quantifiable, comparable metrics that are material to financial value. Environmental indicators include greenhouse gas emissions, energy use, and resource consumption. Social indicators cover labor practices, supply chain conditions, and community impact. Governance indicators address board structure, executive pay, and anti-corruption policies.
The defining characteristic of ESG reporting is that it is measurement-oriented and increasingly subject to independent assurance, meaning the data must be verifiable, not just stated. This distinguishes it from broader sustainability communication, which may rely more on narrative and qualitative description.
One of the most consequential developments in ESG reporting is the mandatory inclusion of Scope 3 emissions under CSRD. Scope 3 covers indirect value-chain emissions – including those from purchased goods, transportation, and end-of-life treatment of products. According to Morningstar Sustainalytics research, Scope 3 emissions typically account for more than 70% of the food and beverage industry’s total emissions – yet reporting on them was voluntary until CSRD introduced the obligation.
For food brands, this means packaging choices now have a direct and measurable effect on ESG disclosures. Switching from hard plastic trays to a fiber-based alternative that reduces carbon dioxide emissions by a factor of three, as our Jospak® tray does compared to equivalent hard plastic packaging, generates a concrete, reportable Scope 3 reduction, not just a sustainability claim.
What does sustainability reporting cover that ESG does not?
Sustainability reporting covers a broader range of topics, stakeholders, and narrative context than ESG reporting alone. Where ESG focuses on financially material metrics for investors, sustainability reporting addresses the company’s wider impact on society, communities, and the environment, often including qualitative storytelling, long-term strategy, and goals that are not yet quantified.
A practical mental model: an ESG report looks inward, asking how environmental and social risks affect the company’s value. A sustainability report looks outward, asking how the company’s activities affect the world.
Under CSRD’s ESRS framework, the distinction becomes more nuanced. ESRS E5, the standard on Resource Use and Circular Economy, requires disclosures that go well beyond typical investor metrics. Companies must report on their policies for transitioning away from virgin resources, funded initiatives such as product redesign or supplier engagement programs, concrete time-bound targets for recycled content or waste reduction, and quantitative indicators showing how much of their output is designed for circular use.
This creates a significant practical overlap: the packaging data required for PPWR compliance – material composition, recyclability, recycled content, weight – is essentially the same data required for ESRS E5 disclosure. Companies that treat these as separate data-collection exercises are effectively building the same foundation twice. Structuring packaging procurement around materials that generate this data by design is a more efficient approach.
At Jospak, our fiber-based tray is engineered so that the board and barrier film can be separated after use, returning valuable fiber to existing collection systems. That design feature is directly relevant to ESRS E5 circular economy disclosures for any food brand that uses our trays in its supply chain.
Who reads ESG reports versus sustainability reports?
ESG reports are primarily read by investors, lenders, and financial analysts who use them to assess long-term risk and financial materiality. Sustainability reports serve a broader audience that includes employees, customers, communities, regulators, and civil society organizations interested in a company’s real-world impact.
In practice, the audiences are converging. Large corporate buyers now routinely request verified ESG data from their suppliers as a condition of procurement, particularly Scope 3 emissions data and supplier governance information. This means a packaging supplier’s environmental performance data is no longer just relevant to its own reporting; it feeds directly into a customer’s ESG disclosures.
For smaller companies that fall below mandatory CSRD thresholds, this indirect pull is the most immediate practical pressure. The EU developed the VSME standard specifically to help non-listed SMEs respond to ESG data requests from larger partners in a format compatible with CSRD, without taking on the full reporting burden of the directive.
The implication for food packaging supply chains is clear: even if a packaging manufacturer has no direct legal obligation to report, its large food brand customers almost certainly do. Those customers need verified environmental impact data from their packaging suppliers to complete their own Scope 3 and ESRS E5 disclosures. Quantified metrics, such as plastic reduction percentages and CO2 comparisons relative to conventional hard plastic packaging, are therefore a procurement-relevant asset, not just a marketing point.
Are companies legally required to produce either report?
Whether a company is legally required to produce an ESG or sustainability report depends on its size, location, and the regulatory frameworks that apply to it. In the EU, the CSRD mandates structured sustainability reporting for the largest companies, while voluntary reporting remains the norm for smaller organizations. Outside the EU, mandatory ESG disclosure is expanding but varies significantly by jurisdiction.
The CSRD, as revised by the Omnibus I Directive that entered into force in March 2026, now applies to companies with more than 1,000 employees and an annual net turnover above €450 million. This narrowed scope means many mid-sized companies that previously expected to fall under CSRD are now exempt from direct mandatory reporting obligations. The first wave of companies subject to the revised rules will begin reporting in 2028.
Despite the simplification, the practical reach of CSRD remains wide. Research suggests that the revised thresholds still capture the vast majority of large packaged food companies operating in the EU. And even companies formally outside the scope face indirect pressure: investors, banks, and large corporate customers increasingly expect ESG disclosures regardless of legal obligation, and failure to provide them can mean restricted market access or lost contracts.
Outside the EU, mandatory ESG reporting is also advancing. Approximately 40 jurisdictions globally are adopting frameworks aligned with the ISSB’s IFRS S1 and S2 standards, and several US states have introduced their own disclosure requirements. The direction of travel is clear: non-financial reporting is moving from voluntary to regulated, and the pace is accelerating.
Should a company publish an ESG report, a sustainability report, or both?
Most companies with significant stakeholder relationships benefit from producing both, but the priority depends on who is asking. If investors, lenders, or large corporate customers are requesting structured, verifiable data, an ESG report aligned to ISSB or ESRS is the appropriate response. If the goal is to communicate broader environmental and social commitments to employees, consumers, and the public, a sustainability report following GRI standards is the more suitable format.
In practice, the two are increasingly built from the same data foundation. ESG data collected for investor disclosure feeds directly into sustainability narrative reporting, and vice versa. Companies that invest in a centralized, reliable data infrastructure, covering emissions, material flows, certifications, and supplier performance, can serve both audiences without duplicating effort.
For companies in the food packaging supply chain, the data foundation has a third use: PPWR compliance. The material composition, recyclability, and recycled content data required under the EU’s Packaging and Packaging Waste Regulation (PPWR), which began applying from August 2026, overlaps substantially with what ESRS E5 requires for circular economy disclosures. Building this data set once, and using it across regulatory compliance, ESG reporting, and sustainability communication, is the most efficient path.
Our own approach at Jospak reflects this logic. Our BRCGS AA+ certification and FSC CoC certification provide independently verified quality and responsible sourcing credentials. The quantified environmental performance of our fiber-based tray, including its plastic reduction relative to hard plastic packaging and its lower CO2 footprint, generates data that serves customers’ ESRS E1 climate disclosures and ESRS E5 circular economy disclosures simultaneously. A packaging choice that simplifies a customer’s reporting obligations, rather than complicating them, is increasingly part of what it means to be a credible supplier in a regulated market.
