As more companies begin aligning their sustainability disclosures with the European Sustainability Reporting Standards (ESRS), one question keeps coming up with our clients: What happens to everything that gets cut?
It’s a fair question. Under ESRS, companies are only required to disclose topics that are found to be material through a double materiality assessment. If a topic doesn’t meet that threshold — meaning it’s not considered significant in terms of the company’s impacts or its financial risks and opportunities — it likely won’t appear in the report at all. This is by design: ESRS aims to streamline disclosures and ensure that what’s reported is decision-useful, not just comprehensive for comprehensiveness’ sake. Including immaterial topics in the same format as required disclosures risks confusing stakeholders or misrepresenting what truly matters to the business.
Even for those topics deemed material, the narrative and storytelling we’ve long incorporated into these reports to appeal to broad audiences will take a backseat to structured disclosures. The result? Sustainability teams are left wondering: How do we keep employees, customers, and community partners informed and inspired when so much of the report is no longer written for them?
The answer requires taking a step back: Not every stakeholder needs the same information from your sustainability reporting and communications. In fact, only a small, specific audience is likely to engage with your ESRS-aligned report at all.
That’s not a limitation — it’s an opportunity. An opportunity for brands to rethink how they communicate about sustainability beyond the confines of regulation, and to find new ways to deliver informative, inspiring stories to the audiences that matter most.
Regulators and investors will be the primary users of your ESRS-aligned report. Everyone else — employees, customers, communities — will benefit more from tailored communications that meet them where they are.
Consumers might benefit from shorter, skimmable progress summaries, video storytelling, or social media content. B2B customers could appreciate a good old-fashioned digital brochure or annual webinar. For employees, internal communications or town hall presentations that connect sustainability to their roles may resonate best. For communities, this might mean a refreshed section of your website, a foundation-specific report, or a social media campaign that highlights your impact.
Ultimately, what gets cut from your ESRS report can be just as revealing as what stays in. Just because something doesn’t pass the materiality threshold doesn’t mean it’s not important — in some cases, it may simply mean that the topic is well managed from a risk perspective.
Take community engagement and philanthropy, for example. A recent PwC analysis of 250 CSRD-aligned sustainability statements found that ESRS S3, the standard specifically addressing Affected Communities, was the least commonly reported ESRS topic.
But efforts to support communities impacted by an organization’s activities across its value chain absolutely remain important to brand equity, stakeholder trust, and even maintaining our country’s social safety net. A recent analysis by Candid found that if government funding were to cease completely, over 14,000 nonprofits across the country would likely exhaust their reserves within three months, putting an estimated 2.8 million jobs at risk. This important work is needed now more than ever.
Those cuts can guide your content roadmap. If your foundation isn’t material, how else can you showcase its impact? If your employee programs don’t make the report, how can you celebrate them in other ways? In the case of corporate foundations, standalone foundation reports are seeing a resurgence to ensure this work gets visibility, even if it falls outside the scope of ESRS.
In 2024, H&M Group released a 35-page Sustainability Progress Report that complements their increasingly ESRS-aligned Annual & Sustainability Report. This Progress Report is stylized and succinct, offering accessible summaries of priority topics that include ambitions, progress, and — where relevant — supporting data. What makes it especially effective is the balance it strikes: pairing digestible narrative with directional transparency, allowing the company to tell its sustainability story in a way that’s compelling to a broader range of stakeholders beyond regulators. H&M also continues to invest in a strong digital presence, with a comprehensive suite of sustainability webpages organized by topic. This content strategy improves discoverability, enhances user engagement, and provides a more dynamic platform for ongoing storytelling.
The shift to ESRS is an opportunity — not just to tighten your reporting processes, but to strengthen your sustainability communications strategy.
At thinkPARALLAX, we’re encouraging clients to treat this moment as a chance to:
This is where content strategy meets compliance. And we’re here to help you bridge the two. If you’re navigating this transition and unsure where to start, we’d love to talk. Get in touch to explore how thinkPARALLAX can help you build a stakeholder-first sustainability reporting and communications strategy — one that goes beyond compliance and connects with each of your audiences.