ESG vs. Sustainability Reporting: What Is the Difference?

As more people realize how important it is to use sustainable methods, it becomes more important to understand the different ideas that go along with them. 


The terms ESG and sustainability are two very popular terms that are often used interchangeably by a lot of people, including experts and business executives. 


However, there are some key differences between ESG and sustainability reporting that you should know about. The overall difference is that ESG is specific, comprehensive, and measurable. On the other hand, sustainability is a vague term. 


Let’s talk in depth about the different aspects of ESG and sustainability so you can fully understand them. 


What is Sustainability?

Sustainability has recently come to be associated with “going green” and “lowering your carbon footprint.” Therefore, the majority of people consider things like lowering energy use and monitoring water usage when they think of sustainability.


These are definitely the important part of sustainability, but this perception has also constrained the concept of sustainability. This is one of the main reasons why many businesses still struggle to fully grasp the importance of sustainability reporting. 


They find it difficult to monitor and report performance even though they have a general notion of what they need to achieve. 


One of the most reliable ways of fulfilling sustainability reporting requirements is for companies to engage an outsourced accounting service in Singapore and let the experts handle these essential procedures.  

What is ESG?

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Investors assess an organization’s performance in relation to predetermined standards using the environment, social, and governance (ESG) framework. In order to improve investment choices, such criteria are used to gauge how exposed a certain organization is to risk. 


ESG has been continually growing in popularity because both investors and general consumers nowadays want to know the impact of a company on the environment and overall social structure. 

Hence, more companies are encouraged to focus on making a positive ESG impact and show this impact to the public via sustainability reporting.  


It shows that ESG is much more specific and data-driven than sustainability. It deals with three different dimensions instead of just presenting the concept of going green. 




The majority of us associate sustainability most closely with the environmental factor. It is concentrated on enhancing a company’s environmental performance.


This may entail actions like lowering carbon emissions, enhancing resource efficiency, cutting waste, and adhering to environmental laws. Risk management related to the climate is another example. 


But in addition to sustainability, ESG also includes governance and social initiatives that improve a company’s overall performance and profitability. These initiatives are not always part of sustainability.



The social component of a company focuses on how it affects its workers, clients, and community. Inside, this might refer to topics like data and privacy, workplace safety, employee engagement, diversity and inclusion, and customer pleasure.


As you can see, compared to typical sustainability initiatives, the social dimension of ESG covers a far wider range of topics. The leadership and structure of a company are the main topics of the governance component. 



The governance dimension includes matters such as executive compensation, board composition, shareholder voting rights, auditing procedures, and anti-bribery and anti-corruption measures. Moreover, ESG places a strong focus on risk management. 


Any organization that is serious about ESG should make monitoring and reducing risks across all three dimensions a top priority.


Core Differences Between ESG and Sustainability Reporting

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An organization that wants to communicate its corporate social and environmental responsibilities to a wide variety of stakeholders will go through the sustainability reporting process to create a comprehensive sustainability report on a regular basis.


The report will compile and disseminate whatever information a company chooses to make public on its commitments to and activities in the social and environmental spheres. 

By doing this, a company will inform all relevant parties—including consumers, staff, and anyone else interested in the organization’s actions—of the brand’s sustainable development plan.


On the other hand, ESG is distinct from sustainability because it is a criterion that has been established by regulators, investors, and ESG reporting organizations. At the same time, sustainability is a catch-all phrase for acting favorably toward a wide range of stakeholders. 


Sustainability reporting reflects this distinction that a company is moving in the right direction. Although a lot of the requirements for ESG reporting may also be utilized to create a sustainability report, the two reports’ objectives and intended readers are different. 


Overall, both ESG and sustainability reporting hold great significance for organizations in helping them achieve their sustainability goals and create a positive impact on ESG. 


Companies can outsource accounting services in Singapore and rely on professionals to deal with reporting measures and fulfill legal regulations.