How Do I Describe My Company's Climate Change Policy in an ESG Report?

We do not have a climate policy: are you sure?

When companies reach the climate policy section of their ESG report for the first time, the instinctive reaction is often that they do not have one. That is rarely actually true.

A climate policy, in the context of an ESG report, does not have to be a formal document with a name, a version number, and sign-off from the board. It is simply a description of how your company manages its climate-related impact through the practical initiatives and principles that guide decisions about energy, travel, procurement, and operations. Most SMEs already do some of this, even if it has never been written down or called a policy before.

The purpose of this section is not to test whether you have an academic climate strategy. It is to give a clear, honest account of what your company actually does and, where relevant, what it is working toward.

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A climate policy can be simple

This is the part worth internalising before you start writing: a climate policy can be built entirely from things your company is already doing.

Common examples of climate-related practices that SMEs often have without calling them a policy include:

• Reducing energy consumption in the office
• Buying renewable electricity
• Reducing business travel, particularly flights
• Encouraging remote or video meetings instead of in-person travel
• Recycling old equipment and electronics
• Purchasing more sustainable products or materials
• Reducing waste
• Improving energy efficiency in equipment or facilities
• Replacing vehicles with lower-emission alternatives

If your company does even two or three of these things consistently, you already have the foundation of a climate policy description. The task is not to invent new initiatives but to describe the ones that already exist in a clear, structured way.

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What should a good description include?

There is no single fixed list, and you should only cover what is genuinely relevant to your business. But a strong response often touches on some combination of the following areas:

• Carbon reduction commitments: any targets or ambitions, even informal ones
• Energy efficiency: steps taken to reduce energy use
• Renewable energy: whether you purchase or generate renewable electricity
• Business travel: how travel decisions are made and whether alternatives are encouraged
• Company vehicles: fleet choices, including any shift toward lower-emission vehicles
• Procurement: whether sustainability is considered when choosing suppliers or products
• Supply chain: expectations placed on suppliers, if any
• Office operations: practical measures like lighting, heating, or equipment choices
• Waste reduction: recycling, reduction, or reuse practices
• Resource efficiency: general efforts to use materials or resources more efficiently
• Employee engagement: how staff are involved in or informed about climate initiatives

Pick the areas that are actually true for your company. A software company with no fleet vehicles can simply skip that category rather than writing a sentence about something that does not apply.

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Do not forget to explain how it is actually implemented

This is the part most companies leave out, and it is often what separates a weak answer from a strong one.

It is not enough to list initiatives. A good description also explains how those initiatives are put into practice, which shows a reader that the policy is actually used, not just written down. Consider addressing:

• Who is responsible for climate-related decisions or initiatives (a named role, team, or simply management)
• How initiatives are communicated to employees
• How employees are involved, if at all
• How progress is monitored, even informally
• How the approach is updated over time as the business changes

Even a brief note (for example, stating that initiatives are reviewed annually by management and communicated to staff via internal meetings) adds credibility that a plain list of bullet points does not.

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Keep it realistic

It is tempting, when writing this section, to reach for bold statements. Resist that urge unless you can genuinely back it up.

Avoid commitments like: "We will become carbon neutral next year," if there is no credible plan behind that statement. Overpromising creates a real risk where next year's report will need to explain why the target was not met, which damages credibility far more than a modest, honest description would have.

Instead, describe your current initiatives clearly, and where you want to add future ambitions, frame them realistically. For example, stating that the company is evaluating options for reducing business travel further is honest and useful, whereas promising to eliminate all business travel emissions by next year is not, unless there is a real plan making that achievable.

Honest and achievable commitments are simply more credible than ambitious promises without evidence behind them.

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Structure your answer

A well-organised response is much easier to write and much easier to read. Consider structuring your description around headings such as:

• Climate commitments: any targets or ambitions
• Operational initiatives: energy, waste, resource use
• Business travel: policies or practices around travel
• Procurement: how sustainability factors into purchasing
• Implementation: who is responsible and how it is carried out
• Employee communication: how staff are informed or involved
• Monitoring and continuous improvement: how progress is tracked and the approach evolves

Not every section needs multiple sentences, and not every heading needs to appear if it is not relevant to your business. The structure is a tool for organising your thinking, not a checklist to complete in full.

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Common mistakes to avoid

A few patterns come up repeatedly when companies write this section for the first time:

• Writing only one sentence. A single vague line stating that you care about sustainability gives a reader nothing to work with.
• Listing goals without explaining actions. Stating an ambition without describing what is actually being done to achieve it reads as empty.
• Copying a generic climate policy from the internet. Generic language is easy to spot and does not reflect your company's actual practices.
• Using marketing language instead of describing real practices. Phrases like being committed to a greener future say nothing concrete, so describe what you actually do instead.
• Forgetting implementation and monitoring. A list of initiatives with no mention of who is responsible or how progress is tracked looks like a policy that exists on paper only.

Avoiding these mistakes is mostly a matter of being specific and honest rather than reaching for familiar climate language.

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Example structure

Here is an outline showing how a response might be organised. This is not a complete answer, but a guide to what belongs in each section:

• Climate commitments: briefly state any targets or ambitions your company has, even modest ones, such as reducing office energy use year over year
• Operational initiatives: describe concrete steps already taken, such as energy-efficient equipment or waste reduction practices
• Business travel: explain how travel decisions are made and whether alternatives like video calls are encouraged
• Procurement: note whether sustainability plays a role in choosing suppliers or products
• Implementation: name who is responsible for these initiatives, even if it is simply management
• Employee communication: describe how staff are made aware of or involved in these practices
• Monitoring and continuous improvement: explain, briefly, how the company checks progress and updates its approach

Use only the sections relevant to your business, and write each in plain, specific language reflecting what its actually doing.

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How Wardn helps

Wardn helps companies document their climate policy in a structured way, guiding users through the relevant categories so nothing important gets missed. Because the information is captured consistently, companies can maintain the same description year after year, updating it as initiatives evolve rather than rewriting the section from scratch each reporting period. This also makes it easier to produce ESG reports aligned with the VSME Standard's expectations around climate-related disclosures, without needing a formal sustainability strategy in place first.

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Frequently asked questions

Do we need a formal, written climate policy to complete this section?

No. A climate policy in this context is simply a description of your company's climate-related practices and principles. Many SMEs already have relevant initiatives, like reducing energy use or business travel, that have just never been written down as a formal policy.

What if our company does not have any climate initiatives at all?

If that is genuinely the case, it is better to say so honestly than to invent initiatives that do not exist. However, most companies have at least some relevant practice, such as basic energy efficiency measures or waste recycling, worth describing.

Should we set ambitious climate targets in this section, even if we are not sure we will meet them?

No. Avoid commitments you cannot credibly support, such as promising carbon neutrality without a real plan. It is better to describe current initiatives honestly and frame future ambitions realistically, even if modest.

What's the biggest mistake companies make when writing this section?

Writing only a vague, one-sentence statement, or listing goals without explaining the actions and implementation behind them. A strong description explains what is actually being done, who is responsible, and how progress is tracked.

How long should our climate policy description be?

There is no fixed length requirement. Cover the areas genuinely relevant to your business, as you do not need to address every possible category. A focused, honest description of a few real initiatives is stronger than a long, generic list covering areas that do not apply to you.

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