Introduction
Environmental, Social, and Governance (ESG) disclosures have become more than just a corporate responsibility trend — they are now a regulatory, investor, and stakeholder expectation. As ESG regulations like SEBI’s BRSR (Business Responsibility and Sustainability Reporting) tighten in India, the accuracy and transparency of data have become fundamental to effective ESG performance.
But as ESG reporting becomes more complex, data management is increasingly a challenge. From collecting large volumes of information to standardizing metrics across departments, effective ESG reporting begins and ends with strong data governance. In this blog, we explore why data management is crucial, what challenges companies face, and how they can build a robust ESG data ecosystem.
Why Data Management Matters in ESG
ESG reporting is inherently data-driven. Whether it’s tracking carbon emissions, board diversity, supply chain practices, or community initiatives, the reliability of your ESG disclosure depends on the integrity of your data.
Strong data management in ESG helps companies:
- Ensure compliance with regulatory requirements (like SEBI-BRSR, GRI, SASB, TCFD)
- Build trust with investors, rating agencies, and consumers
- Drive internal accountability and continuous improvement
- Support data-backed decision making in sustainability strategy
When done right, ESG data management doesn’t just improve reporting — it enhances corporate resilience and long-term value.
Challenges in ESG Data Management
Despite its importance, most companies — especially in India — are still struggling to build mature ESG data systems. Some common challenges include:
- Data Fragmentation
ESG data comes from multiple departments — HR, EHS (Environment, Health, and Safety), procurement, finance, etc. Without a centralized approach, data remains scattered and difficult to compile. - Lack of Standardization
Different teams may record the same ESG metric (like energy consumption or employee training hours) differently. This makes it hard to consolidate or benchmark the data effectively. - Manual and Outdated Tools
Spreadsheets, PDFs, and static reports are still commonly used. These methods are prone to human error and don’t support real-time updates or validations. - Inconsistent Audit Trails
Without defined data governance, companies may lack proper documentation or evidence to back up their ESG claims — especially when it comes to third-party assurance or investor scrutiny. - Dynamic Regulatory Landscape
New metrics, reporting frameworks, and disclosures (like SEBI’s Green Credit Program) are evolving rapidly. Many companies struggle to adapt their systems to accommodate new requirements.
Best Practices for ESG Data Management
To overcome these challenges, companies must shift their ESG data processes from ad hoc to strategic. Here are some steps to get started:
- Establish a Central ESG Data System: Whether through a purpose-built ESG software or a dedicated platform, ensure there is one source of truth for all sustainability-related data.
- Define Clear Metrics and KPIs: Adopt consistent and standardized definitions for each ESG parameter. Align them with national (e.g., BRSR) and global frameworks (e.g., GRI, TCFD).
- Integrate Across Functions: Break silos between departments. Design workflows where teams like operations, HR, procurement, and finance feed data into the ESG reporting process collaboratively.
The Role of ESG360
At ESG360, we support companies in building an ESG data foundation that is strong, reliable, and future-ready. Our services include:
- ESG data readiness assessments
- Custom templates for BRSR/ESG KPIs
- Capacity building and training for data owners
- Preparation for assurance of ESG reports
Whether you’re just starting or seeking to upgrade your ESG systems, our team helps ensure that your data works for you — not against you.
Conclusion
In ESG, data is the difference between compliance and credibility. As sustainability reporting becomes more regulated and performance-driven, businesses that invest in sound data management will gain a competitive edge — not just in reporting but in decision-making, innovation, and stakeholder trust.
If your ESG data is hard to track, inconsistent, or not aligned with frameworks, it’s time to act — because strong data builds stronger sustainability stories