ESG Communication Strategy: How to Report ESG to Stakeholders in Australia

Strong ESG performance loses value if stakeholders don’t understand it. Poor communication creates cynicism. Transparent, honest communication builds credibility and trust. This guide covers how to communicate ESG effectively to different stakeholder groups.

For context on ESG strategy development, see our complete ESG strategy guide.

Principles of Effective ESG Communication

Transparency: Be honest about performance, challenges, and improvement areas. Stakeholders respect honest assessment more than glossy claims.

Clarity: Use clear language. Avoid jargon. Explain why ESG issues matter to your business. Make it understandable.

Materiality: Focus communication on material ESG issues. Don’t dilute message with irrelevant initiatives.

Consistency: Message should be consistent across channels (investor communications, marketing, employee channels, website).

Authenticity: Be genuine. Customers and employees can sense greenwashing. Authentic commitment is credible.

Accountability: Make clear who’s responsible for ESG. How will you measure progress? What happens if you fall short?

Reporting by Stakeholder Group

Investors

What they want: Understanding of material ESG risks and opportunities affecting financial performance. Board oversight and management quality. Clear targets and progress tracking. Consistent, transparent disclosure.

Communication channels: Annual financial reports (increasingly including ESG disclosure), dedicated sustainability reports, investor days/webinars, one-on-one investor meetings, ESG data requests (MSCI, Bloomberg, etc.).

Key messages: How ESG is managed, material risks and opportunities, governance structure, targets and progress, forward outlook, value creation.

Frequency: Annual formal reporting. Quarterly updates if material changes.

Employees

What they want: Understanding of company ESG commitments and how they contribute. How ESG affects their role. Career and development opportunities. Inclusivity and respect. Transparency about challenges and progress.

Communication channels: Employee town halls, internal communications, training programmes, leadership messages, ESG committees, pulse surveys, intranet, performance reviews.

Key messages: Company ESG strategy and why it matters, how they contribute, progress and wins (celebrate success), challenges and areas for improvement, opportunities for involvement.

Frequency: Ongoing. Annual highlight of ESG progress in anniversary or key milestone communications.

Customers

What they want: Assurance that products/services are responsibly produced. Impact of their purchases. Sustainability options. Transparency on practices.

Communication channels: Product labels and packaging, website content, marketing materials, customer feedback channels, sustainability reports, certifications.

Key messages: Product/service sustainability, supply chain responsibility, customer impact (if purchasing sustainable option, here’s the positive impact), next steps (what can customers do).

Frequency: Integrated into ongoing marketing and product communication. Annual sustainability report for deeper stakeholders.

Communities and Local Stakeholders

What they want: Understanding of local environmental and social impacts. Opportunities to provide input. Community benefits. Grievance mechanisms. Transparency on operations.

Communication channels: Community meetings, local newsletter, public consultations, community advisory committees, local media, website.

Key messages: Local operations and impacts, community benefits and investment, environmental/social safeguards, grievance mechanism and resolution, progress on addressing concerns.

Frequency: Regular (at least annual). Transparent response to concerns or incidents.

Regulators and Government

What they want: Regulatory compliance, transparency, industry practice information, input on policy.

Communication channels: Regulatory reporting and filings (AASB, APRA if applicable), policy consultations, industry association engagement, direct regulator communication.

Key messages: Compliance status, approach to emerging regulatory requirements, industry perspective.

Frequency: As required by regulation. Proactive engagement on emerging policy.

Suppliers and Contractors

What they want: Clear ESG expectations. Support for improvement. Recognition of performance. Fair treatment.

Communication channels: Supplier contracts and guidelines, supplier forums and training, audit feedback, recognition programmes, direct engagement.

Key messages: ESG expectations and standards, how to meet them, support available, consequences of non-compliance, recognition of leaders.

Frequency: At engagement and ongoing. Annual updates on performance and expectations.

Formal ESG Reporting

What to Include

• Governance: Board oversight structure, executive accountability, ESG integration in strategy
• Material issues: Which ESG issues are material and why
• Targets and progress: Clear targets, progress metrics, timeline. Show multi-year trends.
• Management approach: For each material issue, how you manage it. What systems, policies, investments?
• Challenges and areas for improvement: Honesty about where you’re falling short. What are you doing about it?
• Stakeholder engagement: How you engage stakeholders, what you learned, how input shaped decisions
• Forward outlook: Future priorities, upcoming initiatives, response to emerging issues
• Data and metrics: Specific KPIs. Multi-year data showing trends. Methodology notes.

Reporting Standards

GRI (Global Reporting Initiative): Most widely-used voluntary standard. Comprehensive framework covering broad ESG issues. Third-party verification available.

SASB (Sustainability Accounting Standards Board): Industry-specific, financially material metrics. Investor-focused. Useful for investor communication.

TCFD (Task Force on Climate-related Financial Disclosures): Climate risk disclosure framework. Increasingly expected, especially for financial institutions.

AASB (Australian standards): For large listed companies, AASB S1/S2 are mandatory. Covers materiality, governance, strategy, metrics.

Common approach: Use AASB (if mandatory), supplement with GRI for comprehensiveness, SASB/TCFD for specific issues. Don’t need to use all—choose what makes sense for your business and stakeholders.

Report Format

Integrated report: Combined financial and ESG reporting in annual report. Shows integration of ESG with financial performance.

Standalone sustainability report: Dedicated ESG/sustainability report. Allows deeper disclosure and storytelling. Often published alongside annual report.

Digital/website-based: Web-based ESG disclosure. Dynamic, interactive, more accessible than PDF. Can include video, data visualisations.

Hybrid: Annual report summarises key ESG; website hosts detailed disclosure and data.

Avoiding ESG Communication Pitfalls

Pitfall 1: Greenwashing. Exaggerating ESG performance or impact. Stakeholders see through it. Be honest about what you’re achieving.

Pitfall 2: Excessive detail without clarity. Long, dense reports few people read. Summarise for broad audience; detailed content for those wanting depth.

Pitfall 3: Missing context. Reporting numbers without explaining significance. Why do these metrics matter? How do you compare to peers?

Pitfall 4: Focusing on easy wins while ignoring hard issues. Only reporting positive initiatives while avoiding material challenges damages credibility.

Pitfall 5: Inconsistent messaging across channels. Investor communication says one thing, marketing says another, employees hear something else. Consistency matters.

Frequently Asked Questions

Do we need formal sustainability reporting?

If you’re a large listed company, AASB S1/S2 likely mandate it. For unlisted companies, consider investor/customer expectations. Formal reporting builds credibility and signals commitment. Even simple annual ESG summary is valuable.

How do we balance transparency with confidentiality?

Don’t share commercially sensitive information (specific supplier details, technology). Do share enough to be meaningful. Stakeholders want transparency on material issues, not trade secrets.

What if we’re not performing well on an ESG issue?

Be honest. Explain why it’s challenging. Describe improvement plan. Timeline? Resources allocated? Honesty about challenges is more credible than glossing over them.

How often should we report ESG?

Formally (full report): annually. Updates: quarterly or as material changes occur. Ongoing communication through other channels (social media, website) is continuous.

Moving Forward

Effective ESG communication is transparent, clear, material, consistent, and authentic. Different stakeholders want different information through different channels. Invest in good ESG reporting and communication. It builds credibility and stakeholder trust.