For most finance teams, environmental, social, and governance (ESG) reporting feels like a nonstop challenge.
PR Newswire, citing ESG Book, reports that more than 1,200 ESG policy interventions have been introduced worldwide since 2011. That’s more than double the number from the decade before. As this regulatory pressure keeps evolving, pressure grows for finance teams—they’re often left scrambling to pull data from scattered systems and spreadsheets across departments to meet deadlines and avoid penalties.
This manual work eats away at the time finance teams should have for meaningful work like scenario planning, analyzing trends, and partnering with leadership on decisions. The way to make ESG reporting audit-ready and compliant is to minimize manual work at every possible turn and build automated, repeatable processes.
This guide explains what ESG reporting is, why it’s such a challenge for finance teams, and how finance and ESG teams can simplify it with the right technology to remain compliant, and make reporting useful for the business.
ESG reporting is the process of collecting, analyzing, and sharing data that shows how a company manages its environmental impact, treats people, and governs its business.
Sometimes called sustainability reporting, ESG blends hard numbers—like emissions, energy use, and diversity metrics—with contextual data such as policies, board practices, and inclusion initiatives.
Here’s an example of what ESG reporting components looks like:
The goal of ESG reporting is to give regulators, investors, employees, and other stakeholders a clear view of how responsibly the business operates, along with the opportunities, challenges, and risks it faces in these areas.
According to the 2026 CPM Trend Monitor from BARC and BPM Partners, ESG was among respondents' top priorities for corporate performance management, marked especially important in Asia-Pacific and Europe.
Regulatory pressures, investor expectations and the need to align business practices with societal and environmental goals has grown the focus on ESG. By demonstrating accountability, attracting sustainable investments and building trust with stakeholders—evolving ESG from something organizations do to remain compliant to a strategic priority for corporate performance—companies can gain a competitive edge.
An ESG score is an external rating (like a report card) given by third parties such as MSCI or Sustainalytics.
These agencies evaluate your disclosures, public filings, and sometimes media coverage to assign a score that investors and lenders use to compare companies. A strong ESG report makes it easier to achieve a higher ESG score, which can improve access to capital and boost reputation in the market.
Companies with higher ESG scores are often seen as less risky and more attractive to investors, because the score suggests they manage environmental and social risks well. Lower scores, on the other hand, can raise red flags about regulatory risk, reputational issues, or weak governance.
The main reason ESG reporting matters is that it reassures investors and the public that a company is delivering on its commitments.
For example, if a company commits to improving board diversity, reporting makes that promise real by showing year-over-year progress—like how the percentage of women or underrepresented groups on the board changes over time.
This kind of transparency also has financial implications.
ESG has also become a bigger priority in business deals over the past year, according to KPMG’s 2024 Global Due Diligence study, which means the way you report your activities can directly influence how attractive your company looks in the market.
"The benefits of being regulatory-aligned is that your business will be in better shape—the nature of the regulations are really specific around governance and risk,” Mark Lumsdon-Taylor, Partner and Head of Sustainability at MHA, explained on a recent episode of The CFO Show. When businesses recognize that they’re part of a larger, interconnected supply chain, the importance of ESG becomes clear, Mark continued.
And when companies fall short, they risk losing money in penalties. In 2022, the U.S. Securities and Exchange Commission (SEC) fined Goldman Sachs $4 million for failing to follow its own ESG policies, even though it marketed its products as ESG-compliant.
Beyond avoiding penalties, ESG disclosures also matter because they:
ESG reporting depends on where your company operates and who you report to.
In Europe, for example, the Corporate Sustainability Reporting Directive (CSRD) has made ESG reporting compulsory for large and listed companies, with deadlines kicking in from 2024. In the U.S., the Securities and Exchange Commission (SEC) has finalized climate disclosure rules that will soon require public companies to report on emissions and climate-related risks. Other regions—including Canada, the U.K., and parts of Asia—are moving in the same direction.
For small and medium-sized companies, ESG reporting usually isn’t required by law (yet), but investors, lenders, and even customers are asking for it more and more. As a result, many businesses report voluntarily because it helps them stay competitive, access capital, and build trust with stakeholders.
The ESG reporting process usually follows these steps:
First, gather information from across the business. Here’s a list of common ESG data points and the departments that usually own them:
|
ESG Area |
Examples of Data |
Typical Owners/Departments |
|
Environmental |
Energy use, water consumption, waste, carbon emissions (Scope 1–3) |
Operations, Facilities, Supply Chain |
|
Social |
Workforce diversity metrics, employee turnover, health & safety records, training programs |
HR, People & Culture, Compliance |
|
Governance |
Board composition, executive pay policies, anti-corruption practices, ethics guidelines |
Legal, Compliance, Board Secretary |
|
Finance/Procurement |
Supplier sustainability data, ESG-related costs, vendor risk data |
Finance, Procurement, Vendor Management |
The challenge is that all this data sits in silos, and pulling it together manually takes a lot of time and usually means chasing teams for updates. Centralizing the data in one platform makes it easier to get to a single version of the truth.
An Excel-native ESG reporting solution like Vena, for example, can help solve this by pulling data from systems across HR, operations, supply chain, and finance into one place.
Because ESG data comes from different systems and teams, the next step is to bring it all into one place. From there, it needs to be reviewed for accuracy, cleaned up, and aligned with the ESG reporting framework your company follows.
Companies typically align their reporting with one or more ESG frameworks, such as:
The key is to line up your reporting with the ESG frameworks that are suitable for your business model, and set up your data in a way that can grow with you.
Regulations change often, so the last thing you want is to rebuild your process from scratch every time. Having an ESG planning and reporting software that can adapt with new standards gives you the flexibility to adjust as quickly as the change occurs.
Once the data is collected and cleaned, the next step is turning it into disclosures that show performance, risks, and goals in a way that regulators, investors, and the public can understand. That means telling the stories behind the data to show what the company is doing well, where the gaps are, and how it plans to improve.
AI-enabled software solutions offer a way to ensure compliance, save time, and provide companies with a competitive advantage by offering an alternative to manually digging through spreadsheets to pull out sustainability insights. According to the Thomson Reuters 2024 State of Corporate ESG Report, 77% of survey respondents said they believe AI will have a high or transformational impact on their work over the next five years.
For finance teams, this means less time spent reconciling numbers and more time adding forward-looking context that helps shape a clearer story for stakeholders.
The final step is sharing your ESG disclosures in a format that stakeholders can actually use. This might take the form of an annual ESG or sustainability report, regulatory filings (such as CSRD submissions in Europe or SEC climate disclosures in the U.S.), or even integrated sections within your financial reporting.
The format matters because different audiences look for different things.
Investors may want to see clear year-over-year progress against targets, regulators focus on compliance with standards, and employees or the public may be more interested in the company’s social and environmental impact.
One of the toughest parts of ESG reporting is pulling together reliable data. ESG data comes from everywhere—HR, operations, suppliers, and finance—and stitching it together in a way that’s consistent, accurate, and audit-ready is hard.
Deloitte’s 2024 Sustainability Action Report found that 88% of executives ranked data quality as one of their top three ESG reporting challenges, especially when it comes to managing supplier data. On top of that, 81% cited problems with documentation, including basic control steps like review, sign-off, and certification of ESG data.
These processes are second nature in financial reporting but still immature in sustainability reporting. As a result, teams are more exposed to errors, risk penalties, and struggle to trust their own ESG data when making decisions.
Finance and compliance teams also face other ESG reporting challenges, including:
These challenges are exactly why many finance teams are looking for ways to simplify and standardize ESG reporting.
Mark Lumsdon-Taylor described how organizations can begin to navigate the challenge of ESG reporting. "Our approach is firstly to take a step back and evaluate exactly what you are doing,” he said. “What are you legally as a group, a global institution, or even just as an organization in scope for? For some organizations, it might just be local legislation."
"It has to start at the top of the organization,” Mark continued. "Once you know what data you need to collect, there needs to be a strategic lead for who works with other senior leaders in order to gather what’s necessary.” Often, he says, the strategic lead is the CFO, though larger organizations may have a Chief Sustainability Officer.
An ESG disclosure serves multiple purposes for different stakeholders:
Ultimately, ESG disclosures turn raw data into a communication tool that reassures outside audiences while giving internal teams insights they can act on.
A high-quality ESG disclosure tells a story that’s clear, consistent, and actionable.
The best ones share a few key traits that make them useful for regulators, investors, and the business itself, including:
The strongest disclosures come from companies that weave ESG into their day-to-day operations instead of treating it as an annual reporting exercise.
Mark also emphasizes integrating ESG into existing risk evaluation rather than treating it as an entirely separate exercise is considered good practice. "Whatever you're doing, there will be a fundamental risk attached to it,” he says. “Those businesses that have integrated risk from ESG into their processes and practices at a baseline level rather than treating it as something that the board signs off on once per quarter makes sure everything is joined up and coordinated.”
That means linking ESG goals directly to business objectives, like reducing energy costs through efficiency programs or improving retention through inclusive hiring practices. It also involves:
An ESG dashboard created with Vena Insights, focusing on the "E" of ESG.
An ESG dashboard created with Vena Insights, focusing on the "S" of ESG.
An ESG dashboard created with Vena Insights, focusing on the "G" of ESG.
Doing this with spreadsheets alone is tough, and most rigid ESG tools don’t fit the way finance teams actually work. That’s where a Microsoft-native platform like Vena helps. It allows you to interact with your data in the familiar environments of Excel and Power BI, while giving you built-in governance, scenario planning, and forecasting, so you can centralize ESG data, track progress, and model future impact without forcing your teams to learn a new system.
Start with Vena’s Free ESG Reporting Template. It helps you evaluate your company’s ESG performance and carbon footprint, compare your impact across fiscal years, and track progress against goals.
The template comes pre-configured with widely used frameworks like GRI and IFRS, includes dynamic scenario modeling, and has built-in data governance to reduce errors. That way, your team can plan reduction initiatives, track actuals, and generate regulator-ready reports within Excel and Microsoft tools you already use.
This way, instead of scrambling at year-end to piece everything together, you’ll already have a clear, accurate report ready to share with stakeholders.
Learn more about how Vena can support your ESG reporting and planning.
Evaluate your company’s ESG performance and carbon footprint to compare your impact across fiscal years.
Download NowJessica Tee Orika-Owunna is a content strategist and writer with over seven years of experience creating and repurposing relatable, helpful content for global brands including Contentsquare, Softr, Hotjar and Vena. She specializes in turning everyday product, user, and subject matter expert insights into product-led content that answers real buyer questions and supports better business outcomes.
