The single most significant operational challenge facing companies striving for compliance with the new European sustainability directives (like CSRD) is data integrity and consistency. ESG reporting requires collecting qualitative and quantitative information from numerous siloed departments and systems (Finance, Operations, HR, EHS, etc.)—often for multiple reporting frameworks simultaneously.
This fragmentation leads to unreliable data and a multiplication of effort. The same data points are frequently gathered in different formats for different internal and external reporting purposes. This increases the risk that different departments might provide different values for the same indicator, resulting in reports that are inconsistent and unreliable to investors and auditors. A lack of clear, shared definitions for terms, even simple ones, further risks inconsistent interpretations and undermines data integrity, especially when rushing to meet regulatory deadlines.
To combat this “alphabet soup” problem and avoid the negative outcomes of greenwashing, companies are advised to adopt a technology-forward approach:
• Establish a “Single Source of Truth”: The goal is to centralize and define a single, verifiable source for individual data elements, ensuring consistency across all disclosures (management statements, financial reports, marketing communications).
• Leverage Technology: Companies are increasingly planning to increase their ESG technology budgets over the next few years. Specialized data management tools and software can intuitively and efficiently collect and validate data across different frameworks at once. For instance, verified workforce makeup data can feed into all relevant reporting workstreams simultaneously, minimizing manual efforts.
• Navigate Complexity: Dedicated software helps analysts and reporters navigate complex reporting requirements and materiality inventories, allowing experts to focus on analysis rather than manual follow-up.
Investing in robust ESG data infrastructure is essential for minimizing reputational risks, maximizing credibility, and streamlining the path toward achieving integrated, auditable reporting.
Tired of collecting the same data 10 times? Automate your reporting, establish a ‘Single Source of Truth,’ and ensure auditable data integrity at the ESG Congress: esg-congress.com