Which stakeholder group is most directly influenced by sustainability reporting?

Sustainability reporting primarily serves to communicate a company's environmental, social, and governance (ESG) performance to its stakeholders, making it particularly relevant to shareholders and investors. This group is directly influenced because they rely on accurate, transparent information about a company’s sustainability practices to assess risks and opportunities. Investors increasingly consider ESG factors when making investment decisions, as these elements can significantly affect long-term financial performance and risk management.

A company’s sustainability report can provide insights into aspects such as resource usage, regulatory compliance, social impact, and governance practices, which can all influence investment decisions. Consequently, shareholders and investors are often keenly interested in sustainability reporting as it directly relates to their financial interests and the overall value of their investment.

While employees, competitors, and government regulators are also impacted by sustainability practices, the primary audience for sustainability reporting, which focuses on long-term operational and financial implications, tends to be shareholders and investors looking for assurance that the company is managing risks associated with sustainability effectively.