Beyond Carbon: Overlooked Metrics That Should Be in Your ESG Report

When companies think about Environmental, Social, and Governance (ESG) reporting, carbon emissions often dominate the conversation. Measuring and reducing carbon footprints is vital in combating climate change, but ESG encompasses far more than just carbon metrics. To create a truly comprehensive and impactful ESG report, organizations must look beyond carbon and incorporate other critical metrics. Here are some overlooked areas that deserve attention in your ESG reporting.

1. Biodiversity Impact

While carbon reduction gets much of the spotlight, biodiversity preservation is equally important in building a sustainable future. Businesses should evaluate how their operations impact ecosystems, from deforestation and water usage to habitat disruption. Metrics like the percentage of sustainably sourced materials, reforestation efforts, and impacts on endangered species can illustrate a company’s commitment to maintaining ecological balance.

For example, companies in industries like agriculture, energy, or real estate development are particularly positioned to report on how they protect and restore natural habitats.

2. Circular Economy Metrics

The concept of a circular economy—where waste is minimized, and materials are reused—is gaining momentum. Metrics like product lifecycle assessments, recycling rates, and the percentage of products made from recycled materials can highlight an organization’s role in reducing waste.

Electronics and fashion industries, which often face criticism for contributing to landfill waste, can particularly benefit from integrating these metrics into their ESG strategies.

3. Water Stewardship

Water scarcity is a growing global issue, and companies must take responsibility for their water usage. Reporting water-related metrics, such as total water withdrawal, water intensity (water use per unit of output), and the percentage of wastewater recycled or treated, can demonstrate a company’s commitment to sustainable water management.

For companies in water-intensive industries like manufacturing, food production, or textiles, these metrics can showcase leadership in addressing global water challenges.

4. Social Equity and Inclusion

The “S” in ESG is often underreported compared to its environmental counterpart. Metrics around social equity, such as pay equity by gender or ethnicity, representation in leadership roles, and employee turnover rates, can reveal much about a company’s culture and commitment to inclusivity.

Other key indicators include supplier diversity and investments in community development, which reflect a company’s broader societal impact.

5. Governance Transparency

Governance metrics often receive less attention but are crucial in building trust with stakeholders. Reporting on topics like anti-corruption measures, lobbying expenditures, and board diversity provides transparency about the company’s leadership and decision-making processes.

Additionally, detailing how ESG goals are tied to executive compensation can show that leadership is held accountable for sustainability outcomes.

6. Mental Health and Employee Well-being

In the wake of the pandemic, mental health and employee well-being have taken center stage. Companies can include metrics such as access to mental health resources, employee satisfaction surveys, and sick leave utilization to reflect their dedication to creating a supportive workplace.

Why These Metrics Matter

Broadening the scope of ESG reporting does more than just meet stakeholder demands—it aligns organizations with emerging global priorities. As regulators, investors, and consumers demand greater accountability, companies that adopt a more comprehensive ESG framework will stand out as industry leaders.

How to Get Started

Incorporating these overlooked metrics doesn’t happen overnight. Start by conducting a materiality assessment to identify which areas resonate most with your industry and stakeholders. Collaborate with third-party organizations and leverage tools like the Global Reporting Initiative (GRI) or the Task Force on Climate-Related Financial Disclosures (TCFD) to standardize your reporting practices.

By looking beyond carbon, companies can create ESG reports that tell a more complete story about their impact on the planet, people, and governance. In doing so, they will not only mitigate risks but also unlock new opportunities for growth and innovation.