As ESG Reports Grow Longer, New Research Urges Investors to Look Beyond the Greenwashing Binary

Companies pour significant resources into ESG reporting, and investors increasingly treat these documents as essential reading. Yet the expanding universe of sustainability disclosures has created a practical problem: the more pages firms publish, the harder it becomes to tell which statements reflect genuine environmental progress—and which are simply narrative.

New research argues that the debate should move beyond a blunt “authentic versus greenwashing” framing. The more useful question, the authors say, is which parts of ESG reports carry reliable signals about real-world environmental performance. In other words, sustainability reporting may not be uniformly informative; some disclosures appear to align with measurable improvements, while others offer little insight into whether a company is actually reducing its footprint.

That is the premise behind a large-scale study by Ivan Savin, Mateo López Carel and Eva Schlindwein. The researchers examined 1,477 ESG reports issued by companies in the STOXX Europe 600 between 2010 and 2023. Rather than reading reports manually, they applied computational linguistics to detect the central themes companies emphasized. They then tested whether those themes tracked independently measured environmental key performance indicators—such as emissions, energy use and environmental innovation—aiming to see when “what companies talk about” corresponds to “what companies do.”

The results suggest that ESG disclosures are not created equal. The language firms use can be revealing, but its value depends heavily on topic choice. Across the full set of reports, the team identified 34 major topics. Governance dominated the discussion overall, while other themes spanned environmental matters, industry-specific issues, people and communities, finance and public regulation. Environmental themes accounted for close to one-fifth of total report content—substantial, but still secondary to governance-focused material.

The emphasis within environmental reporting also shifted over time. Mentions of greenhouse-gas emissions, electric vehicles, renewable energy and environmental subsidies rose across the 2010–2023 period, reflecting both regulatory momentum and changing market priorities.

To understand what kind of talk is most meaningful, the researchers zoomed in on six environmental themes: greenhouse-gas emissions, sustainable value chains, electric vehicles, renewable energy, energy sources and environmental subsidies. The study finds that only certain themes show a consistent relationship with stronger environmental outcomes. Companies that devoted more attention to “sustainable value chains” and “renewable energy,” for example, were more likely to demonstrate better environmental performance on the independent indicators.

By contrast, emphasizing other high-profile topics did not reliably coincide with improved environmental metrics. The implication is not that discussing those issues is inherently misleading, but that the presence of certain narratives—on their own—may not be a dependable guide to progress.

The takeaway, the authors argue, is practical: sustainability reporting should not be dismissed wholesale, but interpreted more selectively. As disclosure requirements expand and reports grow thicker, investors and policymakers may need to focus less on volume and more on the specific disclosures that best map onto measurable environmental change.

Why it matters

Investors, regulators and other stakeholders increasingly rely on ESG reports to assess risk and corporate credibility, but this research suggests some disclosures are far more informative than others. If markets reward companies for the wrong kind of sustainability narrative, capital may be misallocated and real emissions cuts delayed. The next challenge is turning these insights into better reporting standards—and better tools for interpreting what firms say against what they deliver.