A recycling rate. A gender pay gap. The number of directors from an ethnic minority background sitting on a board. These are now part of how businesses measure and report their environmental, social and governance (ESG) performance. UK regulation is increasingly requiring businesses to report specific sustainability information, leaving little room for vague claims about performance. Choosing the right key performance indicators (KPIs), and defining them clearly enough to produce reliable data, is becoming as fundamental as tracking the more traditional metrics, like revenue and margin.
What Are ESG KPIs?
ESG KPIs are defined, measurable metrics that an organisation uses to track and evaluate its performance in environmental, social and governance areas. While a company’s sustainability strategy sets its long-term goals, ESG KPIs provide a way to measure progress towards them.
Key Takeaways
- ESG KPIs turn broad sustainability goals into measurable indicators that businesses can use to track performance, set targets and identify where action is needed.
- A credible ESG KPI depends on clear definitions, consistent methodologies and auditable data.
- Putting KPIs in context and tracking trends can help businesses identify emerging risks, decide where intervention is needed and monitor progress towards defined targets.
- Environmental KPI reporting is widespread, and social and governance reporting is increasingly being adopted by UK organisations.
- ESG dashboards can bring data together in real time, making it easier to spot emerging risks and take preventative action before they become incidents that need to be reported.
ESG KPIs Explained
An ESG KPI turns a sustainability objective into something an organisation can measure and manage. For example, a company aiming to reduce its environmental impact might track carbon emissions against a baseline and reduction target, then use the results to assess progress and decide where action is needed. The KPI, therefore, provides a consistent way to connect a broad sustainability goal with a specific measure of performance.
The need for reliable ESG KPIs is becoming more imperative as reporting expectations increase. The UK Sustainability Reporting Standards (UK SRS), based on the International Sustainability Standards Board’s (ISSB) global reporting baseline, were issued in February 2026 and are currently voluntary. Meanwhile, the Financial Conduct Authority (FCA) has proposed rules requiring certain listed companies to report against them beginning 1 January 2027, but the proposal is subject to finalisation.
KPMG’s 2025 research found that 72% of surveyed companies cited some level of regulatory pressure as a driver for ESG assurance, while 57% cited pressure from financial markets. Against this backdrop, KPIs need clear definitions, consistent measurement methods and enough supporting information to remain reliable over time, including when a long-term target outlasts the people who originally set it.
Examples of ESG KPIs
ESG KPIs fall into three broad categories: environmental, social and governance. Each category covers a different aspect of business performance, ranging from resource use and emissions to employee well-being, ethical conduct and board oversight.
Environmental
Environmental KPIs measure resource use, greenhouse gas emissions and waste, as well as the environmental impact of products and operations. Examples include water usage, energy consumption and intensity, renewable energy use, sustainable raw materials, waste generation and recycling rates.
Social
Social KPIs measure how a business affects its employees, supply chain workers, customers and communities. Examples include pay equity, diversity and inclusion, employee engagement and turnover, training and development, workplace safety, product safety and compliance, customer satisfaction, human rights, and ethical sourcing.
Governance
Governance KPIs measure how a business is directed, controlled, and held accountable, making them a core component of corporate governance and ESG. Examples include board diversity, ethics and anti-corruption violations, cybersecurity incidents, ESG compliance, reporting transparency and the proportion of executive compensation linked to ESG performance.
Oracle NetSuite's Hospitality Masterclass
What Makes a Good ESG KPI?
To withstand external scrutiny, a good ESG KPI starts with a clearly defined and consistently applied methodology. Anyone reviewing the KPI should be able to understand exactly how the number was calculated, regardless of whether they are the company’s sustainability expert or someone from a regulatory body. The KPI should also have a defined unit of measure, whether tonnes of CO2, kilowatt-hours (kWh) or megawatt-hours (MWh) or incidents per 100,000 hours worked, that follows a recognised methodology where one exists, so results can be compared with peers and explained to stakeholders.
A good KPI should be built on data that can withstand audits. Compared to manual reporting, software that draws directly from primary sources, such as utility metres, HR platforms or supplier records, can reduce the risk of missing or untraceable data. The data must also be granular enough to break down by site, region or business unit, so that when performance shifts, there’s a clear record of where and why that occurred.
25 ESG KPI Examples
The following 25 KPIs represent all three ESG pillars, covering environmental impacts, social performance and governance measures that are gaining ground alongside them. The right combination will vary by business, industry, operations and the ESG issues most relevant to pertinent stakeholders and reporting requirements.
Environmental KPIs
Environmental KPIs anchor most ESG programmes, largely because of the existing regulatory significance of carbon and energy reporting in the UK. The environmental KPIs below relate to emissions, resource consumption and a company’s general environmental footprint.
-
Carbon Footprint (CO₂ Emissions)
Carbon footprint measures a company’s greenhouse gas emissions in tonnes of CO2e across three scopes: Scope 1 covers direct emissions from sources the company owns or controls, Scope 2 covers emissions from purchased energy (such as electricity, heat and steam) and Scope 3 covers indirect emissions from the value chain, including supply chain activity, business travel and employee commuting.
-
Energy Consumption
Energy consumption captures the total energy a business uses to operate. It’s typically reported in kWh or MWh. Organisations can also track energy use relative to an activity measure, such as units produced or square metres of floor space, to assess whether efficiency improves as the business changes in size or output.
-
Renewable Energy Usage (%)
Renewable energy usage shows what proportion of a company’s total energy consumption comes from renewable resources, such as wind, solar or sustainably sourced biomass. It can help businesses track progress towards renewable energy targets and assess changes in the energy mix over time.
-
Water Usage Efficiency
Water usage efficiency tracks how much water a business consumes relative to its output, such as water used per product, per tonne produced or per £1 million revenue. Tracking water use this way helps distinguish changes in efficiency from changes caused simply by business growth.
-
Waste Generation & Recycling Rate
Waste generation and recycling rate measure both how much waste a business produces and the proportion it diverts from disposal through recycling, recovery or reuse. Tracking both figures shows if a business is reducing the waste it generates, as well as how effectively it manages the waste that remains.
-
Air Pollution & Emission Reductions
Air pollution- and emission-reduction KPIs track pollutants released by business operations, such as particulate matter, nitrogen oxides and sulphur dioxide. They are particularly relevant to businesses with manufacturing facilities, vehicle fleets or industrial processes that can affect nearby air quality.
-
Biodiversity Impact
Biodiversity impact shows how an organisation’s operations affect species, habitats and ecosystems, particularly where operations or development alter land or natural resources. Depending on the business, it can be tracked through such measures as habitat affected or restored, changes in ecosystem condition or progress towards biodiversity management targets.
-
Supply Chain Sustainability
Supply chain sustainability measures the environmental impact of a company’s suppliers, including their emissions, resource consumption, energy usage and sourcing procedures. It can overlap with Scope 3 emissions; but Scope 3 measures emissions across the value chain, while supplier-level sustainability metrics can examine the performance and practices of individual suppliers.
-
Deforestation & Land Use
Deforestation and land-use KPIs measure the impact of a business’s operations and supply chain on forests and other natural land. They are particularly relevant to organisations sourcing commodities, such as palm oil, timber, soy or cattle products. But companies farther down the supply chain may also track whether their suppliers are meeting deforestation-free sourcing requirements.
-
Sustainable Product Development
Sustainable product development reflects how environmental considerations are incorporated into product design, including material selection, manufacturing energy use, product efficiency and durability and end-of-life options, such as reuse or recycling. Businesses can use this KPI to track the proportion of products that meet defined sustainability criteria or to measure progress towards specific environmental design targets.
Social KPIs
Social KPIs measure how an organisation affects its employees, supply chain workers, customers and communities. The social KPIs below cover workforce practices, workplace safety, customer outcomes and human rights throughout the supply chain.
-
Employee Diversity & Inclusion
Employee diversity and inclusion track the representation of different demographic groups in the workforce, including gender, ethnicity, disability and other relevant characteristics that are lawful to collect. Data can be segmented by seniority, function or location to identify how representation changes at different organisational levels. Employee surveys can provide a separate measure of whether employees experience the workplace as inclusive.
-
Employee Turnover Rate
Employee turnover rate is the percentage of workers who leave an organisation during a defined period, usually a year. Separating voluntary departures from involuntary ones can provide more useful insight than the overall rate alone, particularly when assessing retention, workforce stability or the reasons employees are leaving.
-
Workplace Safety & Lost Time Injury Rate
Workplace safety KPIs track incidents and injuries that affect employees, with Lost Time Injury (LTI) rate providing a standard measure of injury frequency. LTI rate records the number of work-related injuries that result in an employee being unable to perform their duties and is usually expressed per 100,000 or 200,000 hours worked.
-
Fair Wages & Pay Equity
Fair-wages and pay-equity KPIs assess whether employees are paid fairly, based on defined benchmarks, and whether there are pay disparities. Measures include the gender pay gap, pay gaps in other demographic groups where data can be collected lawfully and the proportion of employees earning at or above a defined wage benchmark.
-
Training & Development Hours
Training and development hours measure the amount of formal learning employees receive over a set period, such as a year. It’s often reported as average hours per employee. Breaking the data down by department, function, job level or employee group can reveal insights into access to training that an organisation-wide average may hide.
-
Employee Engagement & Satisfaction
Employee engagement and satisfaction are typically captured through structured employee surveys, using separate questions or scores to assess how engaged employees feel with their work and how satisfied they are with their employment experience. Tracking both measures prevents treating satisfaction as a proxy for engagement. Changes over time can help identify areas calling for further investigation.
-
Community Investment & Philanthropy
Community investment and philanthropy KPIs monitor the resources a business contributes to its surrounding communities through charitable giving, community programmes and employee volunteering. Measures can include total or relative financial contributions, volunteering hours and the number of people or communities reached, with the methodology defined consistently from year to year.
-
Customer Satisfaction Score (CSAT)
Customer Satisfaction Score (CSAT) is usually collected through a survey sent shortly after a customer interaction, purchase or service experience. CSAT measures a single moment, rather than someone’s overall relationship with a business, which makes it useful for pinpointing specific stages of the customer experience that may need improvement.
-
Product Safety & Compliance
Product safety and compliance KPIs measure the ability of an organisation’s products to adhere to applicable regulatory and safety protocols. These KPIs can include the number of safety incidents, product recalls, customer complaints or formal findings of noncompliance, with results tracked over time and against defined thresholds.
-
Human Rights & Ethical Supply Chain
Human rights and ethical supply chain KPIs reflect how effectively a business identifies and addresses risks, such as forced labour, child labour, discrimination and unsafe conditions, throughout its supply chain. Measures can include the proportion of suppliers assessed relative to defined standards, violations identified, corrective actions completed and the coverage of higher-risk suppliers.
Governance KPIs
Governance KPIs evaluate how a business is run, from who sits on the board to how honestly its own ESG reporting holds up to scrutiny.
-
Board Diversity
Board diversity tracks the diversity within a company’s board, focusing on gender, ethnicity, age, nationality, disability, professional background and similar characteristics. Companies can calculate the representation of different groups as a percentage of board seats, using the measures most relevant to their workforce, stakeholders and reporting requirements.
-
Executive Compensation Linked to ESG
This indicator measures the extent to which executive pay, bonuses and long-term incentives are tied to defined ESG targets, rather than purely to financial performance. It can be expressed as the proportion of variable compensation linked to ESG measures, alongside the specific targets and weighting assigned to them.
-
Anti-Corruption & Ethics Violations
This KPI reports confirmed incidents of corruption or other ethics breaches, such as bribery or misconduct, over a set period. Whistleblowing channel usage often gets tracked together with the incident rate, since a business with policies and training but no reports coming through either has an unusually clean operation or an underused reporting system.
-
Data Privacy & Cybersecurity Incidents
Data privacy and cybersecurity KPIs measure the frequency, severity and response to incidents involving personal or business data and information systems. These metrics can be monitored through number of confirmed data breaches, cybersecurity incidents, affected records, regulatory notifications, and response or recovery times.
-
ESG Compliance & Reporting Transparency
ESG compliance and reporting transparency measures how completely and reliably a company reports its ESG performance within applicable frameworks and requirements. Relevant indicators include the proportion of required disclosures completed, the scope of ESG data subject to independent assurance and the number of material reporting deficiencies or restatements identified.
Selecting Appropriate ESG KPIs
Tracking every possible ESG KPI spreads a business thin, without necessarily making its sustainability programme any stronger. The KPIs worth choosing are the ones that reflect where a company has the most influence in terms of reducing risk or making improvements, and where its industry peers, investors and regulators expect it to demonstrate performance.
Aligning with Strategic Goals
ESG KPIs are more useful when they connect directly to the company’s strategic priorities and the risks it needs to manage. Materiality can help identify which ESG measures matter most to the organisation, taking into account such factors as its business model, operating footprint, industry and exposure to particular environments or social risks. An emissions-intensive manufacturer, for example, will have different priorities from a professional services firm with a much smaller operational footprint.
Meeting Industry Standards
Industry-specific standards and established reporting frameworks can help companies identify the ESG KPIs most relevant to their sector, while making their performance easier to compare to peers’. Sector-based standards, such as the Sustainability Standards Board Standards and broader frameworks like those issued by the Global Reporting Initiative, provide established guidance on which issues and measures may be relevant, while regulatory requirements can add further reporting expectations.
Building an Actionable ESG Scorecard
The difference between a simple report and an actionable scorecard comes down to making the numbers relevant and forward-looking instead of a record of what already happened. A scorecard should put each KPI in context, set a clear objective for it and show how performance moves towards that objective.
Translating KPIs into Practical Insights
A KPI becomes actionable when a change in performance prompts a decision. Trends can help identify where intervention is needed, and if that means increasing investment, assessing a supplier or changing strategy. A sustained decline in recycling rates, for example, could trigger a review of packing materials or a reassessment of the company’s waste handler. The value of the KPI comes from connecting the change in performance to a specific course of action.
Setting Measurable Targets
A good target needs to be specific, measurable and time-bound, and remain achievable vis-à-vis the organisation’s current situation. A reduction of 15% in Scope 1 emissions within the next three years is a much clearer goal than “reduce emissions where possible”. Where applicable, businesses should also establish intermediate milestones to verify that performance is on track to meet the final target.
Communicating Success to Stakeholders
The most comprehensive charts and data in the world are worthless if the people who need to act on them can’t interpret them. The reporting style a business adopts plays a key role in determining whether its ESG scorecard will command credibility with investors, regulators, employees and other stakeholders.
Reporting and Transparency
Reports should be clear about what went into each calculation, including the base year, data sources and methodology used to arrive at the presented result. Organisations that report both progress and shortcomings usually earn greater credibility than those focused purely on positive results.
Effective Communication Techniques
Different stakeholders need different levels of detail. Investors and regulators may want the underlying figures, methodology and progress against targets, while customers and employees may respond better to concise explanations and clear visuals. The underlying data should remain consistent, but the way it is presented can be tailored to each audience. Graphs and charts can make trends and progress easier to understand than blocks of text.
Mitigating Risks Through ESG Dashboards
ESG dashboards don’t prevent risks on their own, but they can give businesses the opportunity to act before potential problems turn into incidents.
Identifying Potential Threats
Dashboards can draw attention to every occurrence that falls outside of defined thresholds or shows a concerning trend, such as a sudden increase in water consumption or a rise in workplace incidents at a certain facility. The sooner a team becomes aware of a looming issue, the more time they will have to investigate the cause and intervene.
Implementing Preventive Measures
Dashboards can help organisations move from identifying ESG risks to taking preventative action. If a metric shows that equipment wear is increasing, for example, the business can schedule maintenance before the problem leads to a safety incident. A rise in supplier compliance issues might prompt additional checks or a review of the supplier relationship, while increasing water consumption could trigger an investigation into the underlying cause. The value of the dashboard is not the alert itself but the ability to act on emerging risks before they become incidents that need to be reported.
How NetSuite Helps Businesses Hit ESG KPIs
Businesses pulling ESG data from disconnected sources risk identifying problems only after they have already affected performance. Without a unified, up-to-date view of the underlying operational data, a rise in energy consumption, a supplier compliance issue or a worsening safety trend can remain buried in separate systems until reporting time. NetSuite Enterprise Resource Planning (ERP) System pulls financial and operational data into a single system, so metrics like energy consumption, waste diversion and supplier spend sit alongside the revenue and cost figures they need to be measured against. NetSuite SuiteAnalytics Reporting & Dashboards then turn that data into dashboards that sustainability teams can monitor day to day, making it easier to notice metrics that are drifting off target, and act before a problem becomes harder to address.
Hierarchical views by site, region and business unit let teams trace a KPI back to the underlying data, rather than reconstructing its origin by hand at reporting time. For a board asking if an ESG KPI stands up under scrutiny, this level of transparency and traceability makes it easier to understand where the number came from and how it was calculated.
The bar for ESG reporting is rising, with regulators and investors placing greater emphasis on accurate, granular data rather than on broad sustainability claims. For businesses, that means having KPIs that can answer questions directly, with clear definitions, traceable data and targets that show whether performance is actually improving. With stricter reporting regulations on the horizon in the UK, businesses that build those systems now will be better prepared to report with confidence and act on what the data shows.
ESG KPIs FAQs
Is ESG a KPI?
No. ESG refers to the environmental, social and governance factors used to assess a company’s sustainability and broader business impacts. A key performance indicator (KPI) is a specific, measurable metric used to track performance against a particular objective.
What is an ESG checklist?
An ESG checklist is a structured list of ESG requirements, disclosures or data points a business needs to address, often used to prepare for reporting, compliance reviews or an audit. It’s a planning or compliance tool, not a performance metric.
What is an ESG framework?
An ESG framework is a structured set of principles, standards or guidelines for identifying, measuring and reporting sustainability-related information. Frameworks help organisations determine which issues and disclosures are relevant and provide a consistent basis for reporting performance.
What are the big four ESG standards?
There isn’t one universally accepted list of four ESG standards. However, the Global Reporting Initiative, the Sustainability Accounting Standards Board Standards, Task Force on Climate-related Financial Disclosures recommendations and the International Sustainability Standards Board’s International Financial Reporting Standards (IFRS) S1 and S2 are among the most influential frameworks and standards used in ESG and sustainability reporting.
