Amid new sustainability regulations, UK companies will need to balance regulatory compliance with compelling storytelling. Daniel Redman, consultancy director at Design Portfolio, explores.

There is mounting pressure for UK companies to report against the Corporate Sustainability Reporting Directive (CSRD) even though many aren’t expected to comply until 2029, particularly if their competitors have already started reporting.

The challenge lies in CSRD disclosures often adding significant length – between 17 and 186 pages – to annual reports. This risks overwhelming stakeholders with dense, technical information, making it harder for them to access the critical sustainability stories within. Companies need to communicate these narratives effectively, without having them overshadowed by endless pages of data.

Is there a way to balance regulatory compliance with engaging, insightful reporting?

There are several strategies companies could explore to meet the growing requirements for sustainability reporting without compromising on message clarity or accessibility:

1) Understand your audiences’ needs 

Companies’ double materiality assessments can be used as an opportunity to understand how different stakeholders interact with the various areas of the reporting suite. Understanding which stakeholders you engage with and how different stakeholders engage with the sustainability story can help shape your reporting approach.

Audiences like talent are increasingly looking at sustainability performance and culture to help them choose new roles. This audience is more likely to look at a sustainability report than the annual report to understand the importance a business places on the key topics they are interested in.

Similarly, customers and suppliers are increasingly more interested in sustainability performance. By tailoring sustainability reports and considering the use of reporting channels to highlight accessible, engaging stories, companies can more effectively connect with these stakeholders, ensuring that the right information reaches the right audience.

2) Consider the role of the separate sustainability report   

With requirements like CSRD mandating that sustainability disclosures be included in the annual report, much of this content becomes formulaic, limiting opportunities to share the company’s unique sustainability journey. With some frameworks requiring over 1,100 data points, this data can often mask the company’s good work and dilute the message.

By shifting the storytelling element to a separate sustainability report, either in digital or print format, companies can create a dedicated space for decision-useful storytelling. This approach allows the annual report to focus on compliance-driven content, while the sustainability report highlights strategic stories that convey why certain material issues are prioritised and where the company is headed.

This setup brings to life the rationale behind key decisions, giving context to the numbers and demonstrating impact through compelling case studies on topics like climate change, human rights and water use. The result is a narrative that goes beyond data, allowing stakeholders to understand the deeper purpose and strategy behind the company’s sustainability efforts.

3) Embrace digital innovation 

We are seeing some companies take a digital-first stance on sustainability reporting by using their corporate website to house the entire sustainability narrative, either in addition to or as a replacement for a standalone sustainability report. This digital approach offers an immersive, interactive platform where stakeholders can engage with decision-useful content through a range of formats, from immersive videos and live case studies to AI chatbots and interactive infographics.

Presenting the full sustainability story online allows businesses to leverage the advanced technical capabilities of their website, making data, messaging and case studies more engaging and impactful. This approach enables different stakeholders to easily access the information that’s relevant to them, bringing the company’s sustainability story to life in an accessible, user-friendly format.

As digital platforms aren’t limited to the reporting cycle, sustainability stories can evolve and stay relevant all year round. With regular updates, a company's sustainability narrative becomes a 'living and breathing' entity, consistently engaging stakeholders with the latest insights and progress.

In conclusion

As CSRD requirements reshape the corporate reporting landscape, UK companies must navigate the challenge of compliance without losing sight of their unique sustainability narratives. 

This provides a new life to sustainability reporting, one that doesn’t just sit in the annual report every 12 months. Instead, by actively understanding diverse audience needs, considering the role of sustainability storytelling across all your reporting channels and embracing digital innovation, companies can transform regulatory obligations into opportunities for meaningful engagement. This approach enables companies to showcase not just numbers, but the values and impact that drive their sustainability journey, making reports both accessible and compelling to all stakeholders.

CSRD has not killed sustainability storytelling; in fact, it has given it more focus than ever before.