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Overcoming ESG Data Challenges: Why 2025 is the Year to Act

Fix ESG data quality, integrate sources, automate reporting, and turn compliance into a competitive advantage.

How To
January 29, 2025
5 min read
Overcoming ESG Data Challenges: Why 2025 is the Year to Act
Matt Browning
VP Marketing
Martin Lepka
Snr. Manager Solutions
Fix ESG data quality, integrate sources, automate reporting, and turn compliance into a competitive advantage.
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Environmental, Social, and Governance (ESG) reporting is no longer a forward-thinking corporate initiative—it’s an immediate business imperative. With regulatory deadlines fast approaching, stakeholders demanding transparency, and the financial risks of inaction rising, companies must move beyond reactive reporting to proactive ESG data management.

The Corporate Sustainability Reporting Directive (CSRD) is already in effect, compelling thousands of companies to report with audit-ready ESG data. The California Climate Accountability Package (SB 253 & SB 261) is raising the stakes for climate disclosures in the U.S but it’s unlikely to develop at the pace of CSRD . Meanwhile, the Carbon Border Adjustment Mechanism (CBAM) is enforcing sustainability compliance for global supply chains. 

These mandates, along with shifting investor and consumer expectations, make 2025 a make-or-break year for ESG data infrastructure.

Yet, for many companies, ESG data remains fragmented, inconsistent, and difficult to manage. The good news? With the right strategy, these challenges can be transformed into opportunities for innovation, efficiency, and competitive advantage.

The Five Biggest ESG Data Challenges (And How to Solve Them)

1. Poor Data Quality Undermines Compliance and Decision-Making

The biggest Achilles’ heel in ESG reporting? Unreliable data. Many organizations rely on outdated spreadsheets and manual processes, leading to inconsistencies, gaps, and a lack of auditability.

How to Fix It:

  • Implement real-time validation to ensure ESG data accuracy from collection to reporting.
  • Use automated data lineage tracking to provide full transparency over ESG calculations.
  • Move beyond "best-effort" data to investment-grade reporting that meets regulatory requirements.

2. ESG Data is Siloed and Inaccessible

ESG data often sits in disparate systems across an organization, including Finance, HR, supply chain, energy management, this only creates bottlenecks for reporting and strategic planning.

How to Fix It:

  • Centralize ESG data on a unified platform to improve accessibility across teams.
  • Enable self-service analytics so stakeholders can generate insights without waiting on IT.
  • Integrate third-party ESG data sources (e.g., DEFRA, AIB) to ensure completeness.

3. Complex and Evolving Reporting Requirements

Companies must navigate a web of standards including CSRD, IFRS S1/S2, SEC climate disclosures, and voluntary frameworks like GRI and TCFD. Staying compliant without a scalable data management approach is nearly impossible.

How to Fix It:

  • Use ESG software with multi-framework reporting capabilities to avoid duplicative effort.
  • Automate compliance updates to adapt to evolving regulatory landscapes.
  • Implement audit-ready reporting to streamline third-party assurance processes.

4. Scope 3 Emissions are Hard to Track

Scope 3 emissions, which are defined as indirect emissions from the supply chain, account for up to 90% of a company’s carbon footprint but are notoriously difficult to measure.

How to Fix It:

  • Use automated supplier data collection to capture emissions from your value chain.
  • Leverage AI-powered estimations when direct data is unavailable.
  • Integrate carbon accounting frameworks directly into ESG reporting workflows.

5. Over-Reliance on Spreadsheets is Costing You

Spreadsheets may work for small-scale ESG initiatives, but they are a liability for large-scale, regulatory-driven sustainability programs. They create version control chaos, human error risks, and inefficiencies that cost companies time and money.

How to Fix It:

  • Replace spreadsheets with a scalable ESG data management platform.
  • Automate data ingestion, processing, and reporting to reduce manual effort.
  • Ensure end-to-end data governance to eliminate reporting errors.

Why ESG Data Transformation is a Competitive Advantage

Addressing ESG data challenges isn’t just about compliance, it’s about unlocking business value:

✔ Cost Savings: Reduce manual effort and audit costs through automation.
✔ Risk Reduction: Ensure data meets assurance and regulatory requirements.
✔ Investor & Customer Trust: High-quality ESG data builds confidence with stakeholders.
✔ Business Growth: ESG performance is now a key factor in winning tenders and contracts.

How Keboola Simplifies ESG Data Management

Keboola’s ESG Data Platform provides an end-to-end solution for integrating, validating, and reporting ESG data. With real-time data visibility, automated compliance workflows, and powerful integrations, Keboola helps companies turn ESG complexity into clarity.

Ready to take control of your ESG data? Download the Gartner Market Guide for ESG Reporting & Management Software for free and discover the solutions leading enterprises are using to stay ahead.

Complete the form below to get your complimentary copy.
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