Data for the sustainable enterprise: Going beyond reporting to create business value

The practice of sustainability reporting isn’t just evolving—it’s being reinvented, as new requirements drive wholesale change in the nature and scope of corporate disclosures. Companies worldwide, particularly those operating in multiple jurisdictions, face wider, stricter mandates than ever. The EU’s Corporate Sustainability Reporting Directive (CSRD) and the IFRS Sustainability Disclosure Standards, to name two, both have a global reach. Mandates such as these also require disclosure of performance metrics that some businesses might not even collect today. (Does your company currently report on its production of microplastics?) What’s more, certain requirements call for companies to obtain third-party assurance.

As a result, businesses can no longer rely upon the same manual, informal processes and spreadsheets that often underpin voluntary sustainability reports. Instead, they must capture sustainability data in ways that an auditor can readily examine. Bringing tech systems and supporting business processes up to these standards can involve a lot of work. Indeed, if you’re not obtaining external assurance on your sustainability report now, you probably do have a lot of work ahead—and, potentially, little time to complete it. (Some companies with a presence in the EU will start disclosure under the CSRD in 2025, based on data collected in 2024.) Here is a checklist for CFOs and CIOs to guide their preparations for new types of reporting requirements.

Narrow the scope. Before adding tech capabilities, business leaders should determine which sustainability topics they’ll need to manage and report on, under applicable new requirements. Under CSRD, for example, EU standards identify more than 1,000 data points, plus other qualitative information, that companies might need to report. But companies are obliged to make disclosures only on those sustainability topics they view as material, in either sense of the word: the topic has a material effect on the company’s financial performance, or the company’s activities have a material impact on the environment or society. The results of a careful materiality assessment will therefore help managers define the company’s tech and data requirements.

Build around the tech systems you have. Many companies have financial and other systems that can help them generate and manage some of the data they need for sustainability reporting. For example, manufacturers might track their energy spending through ERP systems, and they may have instruments in plants to gauge electricity consumption. They can combine this data from these sources with third-party information on the carbon intensity of their energy sources to estimate carbon emissions. All that data also needs to be collected, processed in a way that auditors can trace, and reported.

In general, we see companies doing this in one of two ways. Either they augment existing finance systems with sustainability-specific modules and functions. Or they set up a dedicated data lake for sustainability-related information, which can provide wider access to data, and they install specialised sustainability reporting systems, which help with keeping data current, maintaining an ‘audit trail’ of changes, and formatting data for external disclosures as well as internal reports (see graphic below). One global food and beverages company opted for the latter approach with the aim of making their sustainability data more easily available for analysis with AI models.

Assign responsibilities. Once leaders know what sustainability data to report, they need to put people throughout the organisation in charge of collecting the necessary data and making sure it is accurate enough for external assurance. Certain companies may find they need to designate 50 or more new ‘owners’ of sustainability data across departments, territories and subsidiaries. Because they already have relationships with colleagues who look after budgets across the business, CFOs are often well positioned to see that responsibilities for data get properly assigned.

Set standards, support adoption. Unless the newly appointed owners of sustainability data have experience with financial reporting, they may need training in data management. Even people who have reporting experience can benefit from a skills refresh. Consider a procurement manager who purchases office furniture. The financial details likely get collected automatically when the invoice is processed. But data on the carbon emissions from the chairs’ and desks’ manufacture may not be. So leaders must make sure that the procurement manager and any other employees who are newly appointed to serve as data owners have the training and time to request data and review its quality.

Companies might administer these changes—which apply broadly—in any number of ways. One large pharmaceutical business, for example, put its controls and internal audit teams in charge of strengthening governance of its sustainability data to the same level as its financial data. They identified the data sources for key metrics in its prior sustainability reports and built controls to help confirm the completeness and accuracy of that data. To formalise things, they integrated those controls into an existing enterprise system for financial reporting and detailed the data-governance structure. Finally, the company trained employees to manage and monitor the data effectively. As a result, the company was able to generate reliable sustainability metrics for both external and internal stakeholders, in line with regulatory requirements and the company’s own commitments.

Sustainability data doesn’t have to go only into external disclosures. Leaders and managers can also use this data to guide their efforts at improving performance, just as they now use other measures of business activity (for example, customer conversion rates). These management efforts can also extend beyond the company’s own operations. Some businesses use the emissions data they collect from suppliers, along with third-party data such as independent sustainability ratings, to identify areas where progress toward sustainability goals needs to accelerate, and propose ways of getting there.

In our experience, few companies’ executives ask managers to factor sustainability metrics into business decisions on a consistent basis. Embedding sustainability data into the organisation’s decision-making processes is therefore likely to involve changes both to technology and to management practice.

The technology changes are, in some respects, easier to implement. Sustainability data must be updated and delivered at a frequency that corresponds to the pace of decision-making. Capital-allocation or budgeting decisions that include potential carbon emissions from proposed projects, for example, might take place each quarter—which means that contextual data, such as internal carbon budgets or reports on prior projects (for making comparisons to new proposals), should be updated quarterly too. By contrast, plant operators might need to know every hour whether equipment is functioning within certain thresholds for energy efficiency. In addition, sustainability data must be presented in ways that managers can readily access and make sense of, via data banks or self-service tools or management reports or other mechanisms.

Take, for example, the carbon intensity of a pound of copper, a material which is crucial to increasing the use of renewable electricity and electricity-powered technologies. For reporting purposes, a copper-mining company might disclose this carbon-intensity value at a specific point in time or as an average during a given period. But the carbon intensity of any given pound of copper tends to vary from day to day, as multiple factors, such as the grade of copper ore being mined, fluctuate. If mining-site managers have dashboards that show these factors in real time, they can adjust equipment to help improve operating efficiency and lower carbon emissions.

Similarly, companies that own large vehicle fleets are using Internet of Things systems to track vehicle movements in detail and configuring AI applications to find fuel- and emissions-savings efficiencies that might be gained from changes to routes or dispatching patterns. Managers also use the data to better understand the costs and environmental impact of their vehicle purchasing, financing and maintenance programs—and uncover further opportunities to reduce costs by buying electric vehicles and accessing tax incentives for these fleet upgrades (see graphic below).

To reach decisions that take sustainability data into account, managers must have more than just the data. They also need executives to establish guidelines, targets, incentives and other reference points that define a decision logic in line with the company’s priorities. When a global health and nutrition company undertook a review of its energy-sourcing program, managers chose to include an array of different factors in their assessment: not just financial factors such as energy costs and capital expenditures, or environmental factors such as carbon emissions, but also social factors such as employee engagement and reputational factors such as brand value. This approach permitted them to understand the trade-offs involved in selecting one energy source over another. 

Executives can create still more value by using their companies’ sustainability data to align their offerings more closely with customers’ preferences. They might also use the data—in combination with third-party data such as climate scenarios—to frame and reach decisions on such matters as making capital investments, entering new markets, reshaping product and business portfolios, or pursuing mergers and acquisitions, all of which can have a bearing on a company’s enterprise value and cost of capital.

Increasingly, B2C consumers and B2B buyers are purchasing goods and services with sustainability factors in mind. According to a recent PwC survey, eight in ten consumers say they would pay more for sustainably produced goods. But it can be costly for a company to improve its sustainability performance and reputation to an extent that lets the company charge a premium. So leaders will want to understand, through customer research and other means, which sustainability attributes customers value (and by how much), what it takes to deliver them and how to make buyers aware of the enhanced proposition (see graphic below). Some large chemicals companies work with customers to formulate new products which can help customers meet their own sustainability targets.

Technology tools can also help leaders allocate resources among sustainability-related projects. One executive team took a list of possible investments aimed at reducing carbon emissions and ran them through a simulation engine that estimated their effects on future cash flows under different scenarios. As a result, the team prioritised a mix of projects with greater confidence that they would generate attractive returns on investment. Such analyses can also inform the conversations that CEOs and CFOs have with investors, who value information about the sustainability-focused investments that a company makes and why it makes them.

Some executives also use sustainability data and technology to help them make strategic decisions about how to deal with such eventualities as changes in market sizes (due to the transition to a sustainable economy) or higher levels of risk (due to climate change or nature loss). CFOs can help the C-suite and the board understand these dynamics by incorporating sustainability data and scenarios into models and projections. One business, for example, modelled the possible impact of future carbon taxes under a low-emissions scenario and estimated the reduction it could achieve by implementing carbon-capture technologies at certain facilities.

The more that companies seek to create value by managing their sustainability performance and discussing it with stakeholders, the more they will need to incorporate reliable data into their decision-making processes and external communications. Building on the systems they use to enable sustainability reporting offers an opportunity to accelerate their progress toward a value-creation approach that has sustainability at its core.

Gunther Dütsch is a sustainability services and climate risk partner with PwC Germany.

Sammy Lakshmanan is a sustainability and ESG services principal with PwC US.

Robert Pedler is a digital ESG solutions advisor. He is a managing director with PwC Australia.

Nadja Picard is PwC’s global reporting leader and a partner with PwC Germany.

The authors thank Sabrina Damian, Eleanor Larner and Alexander Müller for their contributions to this article.