Does a Sustainability Report Have to Comply with EmpCo?

The European Commission has clarified that mandatory sustainability reports prepared under the CSRD generally do not fall within the scope of EmpCo. Their purpose is to provide structured sustainability information to investors and other stakeholders, and they are typically not part of commercial consumer communication.

The Commission has not made an equivalent statement regarding voluntary sustainability reports, for example those prepared in line with the VS standard. Our assessment is that if a report is prepared to meet supply chain requirements, financing requests or the information needs of business partners, this would generally argue against classifying it as consumer-directed communication. The situation may be different if the report is specifically intended to inform end customers about a company’s sustainability performance and influence their purchasing decisions. In this case, the report itself may also fall within the scope of EmpCo.

What matters under EmpCo is how and in what context sustainability information is communicated to consumers, for example through marketing and commercial communication. If statements and arguments from a sustainability report are used in consumer communication, they must comply with the applicable EmpCo requirements.

The Sustainability Report as Supporting Evidence

A sustainability report brings together information on environmental, social and governance topics, as well as targets, measures and progress. It therefore provides an important basis of data and evidence. Statements from these reports are often reused in other communication formats.

This is precisely where context can be lost. A detailed and carefully qualified description of a climate target can quickly become a statement such as: “We are on our way to climate neutrality.” Such a shortened claim may be problematic under EmpCo if the underlying pathway, measures and necessary evidence are missing.

The key difference lies in the communication context: While a sustainability report provides space to disclose methodology, assumptions, data sources and limitations, this context is often absent from a product page, social media post or sales presentation. The same statement may therefore be acceptable in one context and risky in another.

For this reason, it is worth reviewing broad sustainability claims, overly simplified headlines and potentially misleading imagery already during the reporting process. These are often precisely the elements that are later reused in other communication formats.

Why “EmpCo Compliance of the Report” Does Not Go Far Enough

In practice, we are frequently asked: “Please review our sustainability report for EmpCo compliance.” The request is understandable, but it does not fully address the core issue.

EmpCo does not assess a report as a whole. It focuses on individual claims, their effect and the context in which they are used. A report may be formally well structured because it follows a recognised standard and still contain wording that becomes misleading when taken out of the reporting context. This shifts the focus of advisory work.

Instead of reviewing completed reports retrospectively, the focus is increasingly on systematically questioning the underlying claims:

• What sustainability claims are we making, and where do they appear outside the report?
• Which of these claims can actually be substantiated?
• Where do implicit promises arise that may not have been intended but could nevertheless be understood that way?
• And where are clearer boundaries, figures or context needed to make a statement understandable?

Sustainability Communication Is Becoming More Precise

EmpCo is likely to make companies more cautious in how they formulate sustainability claims. Sustainability narratives will be scrutinised more closely, while figures, evidence and clear boundaries will become increasingly important. This does not have to be a disadvantage. On the contrary, more precise statements are often more credible.

Instead of saying “We operate sustainably”, companies could communicate more specifically:

• “We have reduced electricity consumption at site X by 18% since 2021 by installing a rooftop photovoltaic system.”
• “Our climate targets initially cover Scope 1 and Scope 2 emissions.”
• “We conduct annual ESG risk assessments for key supplier groups.”

Statements like these make it easier to understand what a company has actually achieved, what its measures apply to and where their limitations lie.

What Companies Should Do Now

A meaningful approach to EmpCo begins during the preparation of sustainability reports and takes their later use into account.

Companies should therefore:

• Clarify target audiences: Who is the report intended for, and where will its content later be reused?
• Consider claims early: Which statements can be robustly derived from documented performance and data?
• Avoid broad claims: Terms such as “sustainable”, “green” or “climate-friendly” should be specified and substantiated.
• Document evidence: Data, assumptions and limitations should be recorded in a transparent and traceable way.
• Prioritise communication content: Define which claims can be used externally and which require additional explanation or qualification.

Sustainability reports therefore do more than document performance, targets and measures. They increasingly serve as a reference framework for subsequent communication and are central to determining what a company can credibly say — and what it cannot.