Transparency and Sustainability Reports: What Readers Really Find

Why reports matter more for small businesses, even though they need not write any

A large customer sends out its 120-page sustainability report, the house bank its climate risk report, the auditor a transparency report. For a business with 25 employees, this seems like a foreign world. In fact, however, these reports are increasingly the reason for questionnaires, supplier declarations, and new requirements in tenders. Those who understand what is in them and what is not can better judge what a customer really demands and which partner they can trust.

This article therefore asks: What do readers actually find in transparency and sustainability reports, and how does an owner distinguish insight from impression? To answer it, we first clarify the terms and the legal framework, introduce the thinking model of impression management, look at what studies show about such reports, weigh two views, and finally derive a grid that makes it possible to check a report in a few minutes.

Sustainability report and transparency report: the terms

A sustainability report describes how a company deals with environmental, social, and governance matters, often abbreviated as ESG. It contains indicators such as emissions, energy consumption, workplace accidents, or the share of women in management, plus targets, measures, and risks. A transparency report, by contrast, mostly discloses structures and procedures. Under EU Regulation 537/2014, auditors of public-interest entities must publish such a report annually, covering among other things their owners, their quality control system, and their revenues. Online platforms publish reports under the Digital Services Act on how they moderate content.

What both types of report have in common is the aim of giving outsiders insight so that they can assess the company. How independent are auditors? describes the role the transparency report plays for auditors' independence.

What changed about the reporting obligation in 2026

The EU Corporate Sustainability Reporting Directive, CSRD for short, originally would have required tens of thousands of companies in Europe to produce extensive reports. With the so-called Omnibus I package, the EU scaled these plans back considerably. Following a provisional agreement in December 2025, the amending directive entered into force on March 18, 2026. Since then, only companies with more than 1,000 employees and more than 450 million euros in net turnover are required to report.

For smaller companies, there is the voluntary VSME standard. Under a European Commission draft of July 2026, from financial year 2027 it is also to limit which information large companies may request from suppliers with up to 1,000 employees. Owners should keep an eye on whether and when this limitation finally applies. Sustainability as a selling point describes which data customers typically request and how a small business prepares it.

The thinking model: impression management in reports

Impression management describes how people and organizations steer the impression others have of them. Research on corporate reports understands it as actions purposefully designed to influence an audience's perceptions. In a crisis, impression management shows up as denial, justification, excuses, or deflection, as Deny, justify, deflect describes. In reports it works more quietly: through the choice of topics, tone, images, order, and what is left out.

For readers, the distinction between two kinds of content is helpful. Substantive information can be checked and compared: a figure with prior year, unit, and reference value, a target with a date, a measure with a result. Symbolic information describes attitude and intent: commitments, mission statements, individual examples, photos. Both have their place. But a report that consists almost entirely of symbolic information offers impression rather than insight.

An everyday analogy: a brochure for an apartment shows the nicest rooms in sunshine, with a wide-angle lens. That is not a lie, but it is a selection. Anyone who wants to buy the apartment still looks at the floor plan, the service charge statement, and the minutes of the owners' meeting. A sustainability report also has a brochure and a floor plan, and only the floor plan allows a judgment.

A good report answers the question the reader would ask if allowed to. A weak one answers the question the company would like to be asked.

What studies show about sustainability reports

Caliskan, Esen, and Barkemeyer (2021) compared the CEO letters in annual and sustainability reports of 15 large listed companies in Turkey. Such letters are among the most widely read parts of a report. The authors found many impression management tactics in both types of report. In the sustainability reports, however, they were more uniform and mainly emphasized carefully selected, isolated examples of good practice. Tactics based on measurable performance and comparisons were almost completely absent there. The authors conclude that this limits the usefulness of sustainability reports as an accountability mechanism.

Hamza and Jarboui (2022) examined 539 firm-years of French listed companies in the SBF 120 index from 2010 to 2016. They found a negative relationship between actual social and environmental engagement and tone management in sustainability reports: companies that did more relied less on embellished language. For readers, this is a useful rule of thumb. A conspicuously promotional tone is no proof of little substance, but it is a reason to look more closely.

In a systematic literature review, Janik and Ryszko (2026) analyzed 88 studies on greenwashing in sustainability reports. Research measures greenwashing mainly through discrepancies between disclosure and measurable performance, between symbolic and substantive measures, and through selective presentation, tone, readability, and imagery. At the same time, the authors warn against assuming that companies uniformly pursue a single strategy, and they distinguish documented cases from studies based on untested assumptions. That mandatory standards alone are not enough is shown by Özevin (2026) in a content analysis of the reports of 24 manufacturing companies from Turkey and the EU for 2022 to 2024: after mandatory standards were introduced, the Turkish companies reported considerably more, but mainly with commitments for the future and vague wording rather than impact data.

The figure comes from a study of environmental claims in the EU, discussed in Greenwashing, and concerns advertising and product claims, not only reports. But it shows how large the share of claims that do not withstand scrutiny can be.

Two views: reports as accountability or as staging?

Both readings have evidence. The studies on impression management support the second, as does the finding of Berg, Kölbel, and Rigobon (2022) described in ESG ratings: ratings from different providers often agree little, with correlations between 0.38 and 0.71. The first is supported by the fact that mandatory reports with standards and assurance enforce substantive information that voluntary reports often omit.

I therefore consider not the type of report decisive, but the way it is read. A report is an offer to be checked. Anyone who reads it like a promotional brochure gets impression. Anyone who reads it with targeted questions gets insight, even from a weak report, because what is missing is also information. This applies to the reports of large customers as much as to a small business's own information.

The reading grid: checking a report in ten minutes

From the distinction between substantive and symbolic information, I derive a tool that I call the reading grid. It consists of five questions and is suitable for sustainability reports of customers and suppliers as well as for transparency reports.

1. Are there figures with prior-year values?

   Look for three to five key indicators, such as emissions, energy consumption, or accident rate. If they come with prior-year values, a trend can be assessed. If not, the report remains a snapshot.

2. Is the reference value stated?

   A figure without a reference value says little. Check whether emissions are given in absolute terms or per revenue, unit, or employee, and whether the scope has changed.

3. Do targets have a date and a baseline?

   “We want to become climate-neutral” is an intention. “Minus 40 percent compared with 2022 by 2030” is a target that can be tracked.

4. Has a third party checked it?

   Look for an assurance statement and read whether it confirms limited or reasonable assurance and which information it covers.

5. What is missing?

   Consider which topics would be obvious for this company, such as the supply chain for a retailer or occupational safety for a construction company, and check whether they appear.

For a supplier, the grid has a practical use. A customer with a report like A will probably request concrete, measurable data because it needs them for its own report. A customer with a report like B will tend to request general declarations, but may suddenly tighten its demands as pressure rises. In both cases, it pays to have your own core data set with evidence, as ESG ratings recommends.

Conclusion: reports offer insight if you read them with questions

To the guiding question: in transparency and sustainability reports, readers find both insight and impression. Studies show that precisely the most widely read parts, the CEO letters, highlight selected good examples and avoid measurable comparisons, and that embellished tone tends to occur at companies with less actual engagement. Mandatory reports with standards and external assurance contain more substantive information, but after the Omnibus reform only for large companies.

Two conclusions follow for small businesses. They should read the reports of their customers and partners with a few targeted questions, because these reveal what they will demand in future. And they should measure their own information against the same questions. Transparency is not the amount of what is said, but the share of what can be checked.

• Check the reports of your three most important customers with the reading grid.
• Derive from the results which data these customers are likely to request.
• Create your own core data set with prior-year values, reference values, and evidence.
• Check your own statements for verifiability before publication.