ESG Reporting – Retail Industry

ESG Tool Kit: Chapter 4

You are reading part 4 of the 10-part ESG Factsheet Series. Explore all the chapters here.

ESG FAQs  |  What is ESG  |  ESG Ratings  |  ESG Reporting  |  ESG Climate and Risk  |  ESG Human Capital Management  |  Supply Chain and ESG  |  Real Estate and ESG  |  Plastics and Packaging and ESG ESG Glossary of Terms

ESG reporting requires disclosure of data relating to an organization’s ESG performance. Investors use ESG disclosures to make informed decisions about companies’ ESG-related strengths, weaknesses and exposure to risks. When completing ESG reports, retailers focus on the topics and metrics most material to their business, their investors and other stakeholders.

Why do companies complete ESG reports?

Investors are increasingly demanding ESG disclosure from companies in all industries primarily because they consider it financially material to the performance of their investment. While ESG information does not always provide information about a company’s competitive positioning, it can provide insight into risk and resilience, two aspects with which investors are increasingly concerned. ESG data provides a holistic view of a business and allows investors to make informed decisions. ESG reports are also useful for internal communication and transparency with external stakeholders (e.g., customers), and as explained below, disclosing certain material ESG information may become mandatory in the United States.


Greenwashing refers to the promotion of a product, service or entire company as more environmentally friendly than it actually is by making misleading or exaggerated claims in marketing materials or sustainability disclosures. This can be done intentionally or unintentionally by making unsubstantiated claims. It is crucial to differentiate between retailers that are genuinely adopting a culture of ESG and those that are merely masquerading as “green.”

Regulators are increasingly scrutinizing companies’ sustainability claims and investigating allegations of greenwashing. The risk of greenwashing can be avoided through ESG assurance, which refers to the validation of the information to be included in ESG-related disclosures, reports or filings. ESG assurance can be completed internally or through external auditors.


The U.S. Securities and Exchange Commission (SEC) mainly regulates capital markets, but has recently been using its authority to unify existing ESG frameworks and develop reporting requirements for public companies.

Other major ESG standards-setting entities include:

What to Expect

Government regulators are responding to investor and consumer concerns about corporate ESG performance and disclosure by working to establish more consistent reporting frameworks and compliance requirements.

In the United States, ESG reporting is still primarily voluntary, but the SEC is considering guidelines for mandatory reporting for public companies — specifically around climate change, human capital management and political spending — in 2022. These expected regulations would set forth metrics and broadly dictate reporting expectations to help investors make more informed decisions. The mandatory ESG reporting measure passed through the House of Representatives in June of 2021, but it faces some opposition on the grounds that it is too costly for companies and does not focus on the issues most material to each industry and company.

In regions like the UK and the EU, mandatory ESG disclosure regulations have already passed and are in the implementation phase. In the UK, specifically, disclosures must be aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. The EU Sustainable Finance Disclosure Regulation requires the disclosure of an array of sustainability information.

More on retail sustainability

NRF Center for Retail Sustainability
Insights around retail sustainabilty and the future of sustainable commerce, including circularity and ESG tools.
Read more
Retailers Reaching for Net-zero
Skyscrapers reflect forest trees
Guidance for retailers for reducing greenhouse gas emissions and setting science-based targets.
Read more
Laying the foundation for modern resale with ThredUp
A woman shopping.
Retail Gets Real episode 354: ThredUp co-founder and CEO James Reinhart on the outlook for the secondhand industry.
Read more
5 takeaways from NRF’s inaugural Big Show Asia Pacific
NRF President and CEO Matthew Shay at Big Show APAC 2024.
Asia Pacific is one of the world’s fastest-growing markets with limitless opportunities to expand stores and production.
Read more
Retail Circularity: An Action Guide for Retailers
circular economy icons
NRF and Deloitte collaborated to develop a guide for retailers on emerging circular business models.
Read more
5 key findings from the NRF and Deloitte retail circularity action guide
A circularity puzzle.
NRF and Deloitte map the future of circular retail.
Read more

Last Updated: 4/15/2022