Understanding the ESG Reporting Code Structure

Designed to enhance transparency and accountability in sustainability reporting, the Environmental, Social and Governance (ESG) Reporting Code provides listed issuers with a structured and coherent framework for ESG disclosures. Part A of the Code lays the groundwork by defining its purpose, scope and overall reporting approach. It introduces the two-tier disclosure model comprising mandatory requirements and “comply or explain” provisions, while setting out the key reporting principles of materiality, quantitative measurement, balance and consistency. This section also highlights the board’s overarching responsibility for ESG strategy and oversight, underscoring the importance of integrating ESG considerations into corporate governance. Part B and Part C together establish the core disclosure obligations under the Code. Part B outlines the mandatory disclosures that must be included in every ESG report, focusing on governance structure, the application of reporting principles, and the determination of reporting boundaries. These requirements ensure a consistent baseline of transparency across all issuers. Part C, by contrast, adopts a flexible “comply or explain” approach and covers a wide range of environmental and social topics, including emissions, resource efficiency, labour practices, supply chain management and anti-corruption. Issuers are required to either comply with these provisions or provide well-reasoned explanations for any non-compliance. Part D reflects the evolving importance of climate-related risks by introducing enhanced climate disclosures aligned with international standards, including the IFRS Sustainability Disclosure Standards. It requires issuers to report on climate governance, strategy, risk management, and metrics and targets, including greenhouse gas emissions. Collectively, the four parts of the Code create a balanced disclosure framework that promotes comparability and credibility while allowing flexibility to accommodate diverse business models and levels of ESG maturity.