Unify sustainability and financial reporting & planning

Sustainability reporting (also called ESG reporting) is the disclosure of data on a company’s operations in three areas: environmental, social and corporate governance.

• Holds the organization accountable for its impact in all three areas to investors, regulators, customers and other stakeholders.
• Covers environmental reporting from two angles: how the company’s activities affect emissions, and what risks climate change poses to the company.
• Lets organizations be open about climate and social risks and opportunities, and their potential financial impact on the business.

ESG reporting and sustainability reporting are closely related, and many people use the terms interchangeably. Sustainability is the broader term. ESG reporting focuses on disclosing environmental, social and governance metrics. Sustainability also covers how an organization plans, manages and tracks those goals across the business. Newer standards such as the EU’s CSRD and the ISSB’s IFRS S1 and S2 use “sustainability” wording, which is part of why the term has become more common.

The compliance landscape for sustainability reporting is moving from a variety of voluntary standards and frameworks, towards mandatory frameworks in a number of jurisdictions.

Many competing standards exist for sustainability reporting, including theSustainability Accounting Standards Board (SASB), Carbon Disclosure Project (CDP) and many other standards. However, movement toward a global standard emerged from the recent COP26 conference in 2021 and COP27 in 2022. And today the main regulatory bodies actively work towards commonality across the standards (interoperability)

When the European Union (EU) announced its 750b EUR Green Deal in 2021, it came with a number of reporting requirements for larger companies. The EU taxonomy was introduced to ensure that funding went to so-called green assets instead of old (grey) technology. To measure progress towards the EUs ESG targets, The EFRAG (European Financial Reporting Advisory Group) was tasked by the EU Commission to implement the Corporate Sustainability Reporting Directive (CSRD) and the underlying European Sustainability Reporting Standards (ESRS).

As of 2028, companies headquartered outside the EU, but with EU-based operations of a certain size, will have to report under the CSRD.

One of the critiques on the CSRD was the administrative burden and the compressed timeline for implementation. Early 2025, the European Commission proposed a number of simplifications to address these concerns (known as the Omnibus proposal)

With the Trump administration in the US, the US SEC has put on hold its initial proposed reporting regulations. However, US States like California, New York and Connecticut have implemented own regulatory requirements for Climate disclosure, applying to companies of a certain size that do business in that state.

Countries like Brazil, China, Japan, the UK and South Africa have implemented or are in the process of implementing ESG disclosure requirements. Today approximately 50% of Global Domestic Product (GDP) is under some sort of sustainability reporting requirement.

For many years, sustainability reporting was an annual, voluntary disclosure that public and private companies made to their stakeholders. The disclosures focused on how the enterprise impacts the environment and society, and how the organization is managing these impacts. With an increasing amount of capital (now roughly $35 trillion) flowing into “sustainable” mutual funds and ETFs, increasing stakeholder interest has emerged alongside increasing demand for more detailed and frequent disclosures from public and private enterprises.

Initiatives such as the Inflation Reduction Act (USA) and the EU Green Deal, with the aim of accelerating the energy transition, require reliable sustainability data to evaluate whether investments truly support the transition. Such initiatives specifically address data quality through increased regulatory requirements.

As a result, corporate sustainability and climate change efforts are quickly transitioning from voluntary to mandatory. The EU is implementing its mandatory CSRD framework mandatory, impacting 50,000 European enterprises as well as foreign enterprises with activities in the EU. Other major markets, including China, Brazil, Australia, Japan, UK, South Africa are rolling out similar legislation, adopting the IFRS-SDS (provided by the ISSB).

OneStream Sustainability Solution solves for Regulatory Compliance on sustainability metrics, Carbon footprint calculations, Planning and Forecasting on sustainability metrics and managing renewable energy contracts.

OneStream sustainability reporting & planning brings rigor and structure to the sustainability data collection and analysis by leveraging and aligning practices, processes, structures and data in a single solution. Gain the ability to accurately calculate Scope 1 , 2 & 3 emissions and carbon intensity. Benefit from robust reporting processes, combined with full data lineage and advanced audit capabilities and framework and factor management.

With OneStream, any changes are instantly applied to all reporting output and centrally maintained as native organizational structures. OneStream’s unique Extensible Dimensionality® also allows you to add additional granularity without the need to rebuild your models from scratch. This functionality makes it easier to manage changes in scope.