Why Data Quality Matters in ESG Reporting

Data Quality is a critical component of effective ESG Reporting. Gartner estimates that poor quality can cost organisations more than $12.9 million a year. Without accurate insights, organisations cannot reliably make informed decisions about their ESG activities and may experience a variety of negative impacts.

Compliance

Governments and regulatory bodies worldwide are enforcing stricter ESG disclosure requirements. Poor data quality can result in non-compliance, leading to legal repercussions, financial penalties, and reputational damage. Ensuring accurate, standardised, and verifiable ESG data helps organisations meet evolving regulatory expectations efficiently.

Building Trust

Investors, suppliers, and customers rely on ESG reports to assess a company’s commitment to sustainability and ethical governance. Inaccurate or inconsistent data can lead to a loss of credibility, making it difficult for organisations to gain stakeholder confidence. High-quality data fosters transparency and trust, enabling companies to demonstrate their true ESG impact.

Improving Decision-making

Data-driven decision-making is key to effective ESG strategy implementation. Organizations use ESG data to identify risks, set sustainability goals, and allocate resources. High-quality data provides actionable insights, helping companies make informed decisions that align with long-term sustainability objectives.

Reduce Risk

Greenwashing—misrepresenting sustainability efforts—can severely damage a company’s reputation. Poor data quality increases the risk of misleading claims, either due to errors or intentional manipulation. Robust data validation processes ensure accurate ESG disclosures, reducing the likelihood of greenwashing accusations.

Strengthen Competitive Advantage

Companies with strong ESG performance and high-quality data attract investors, customers, and talent. By demonstrating reliability and transparency in ESG reporting, organizations can differentiate themselves in the market, enhancing their brand value and long-term sustainability prospects.

What causes poor quality data?

There are several factors that can result in poor quality data.

Data Siloing

Businesses often process ESG data from a variety of sources, such as integrations with third party software, spreadsheets, and manual recording and entry. Combining this data in a meaningful and coherent way can often prove difficult, due to a lack of standardisation and data normalisation.

Lack of Resources

Addressing data quality can be a burdensome task, requiring staff to spend their time doing something could be better spent elsewhere. As a result, maintaining data quality sometimes gets overlooked or deprioritised, resulting in errors.

Lack of Ownership

Poor oversight and a lack of ownership can result in data quality deteriorating over time. If no one within an organisation is taking responsibility, or if there are no quality management processes in place to ensure that data is accurate and up to date, then errors will inevitably occur.

Manual Errors

We all make mistakes, and manual processing errors can occur; especially when people are dealing with large volumes of data. Something as small as a misplaced comma, or an upper case I mistaken for a lower case l can have a major impact on the quality and actionability of a dataset.

How Can SustainIQ Help?

SustainIQ can help overcome the causes of the data inaccuracy. As part of the onboarding process, our Customer Success team work with you to standardise your reporting methodologies, ensuring that the information ingested into the system is in an accurate and consistent format.

Our open API allows us to integrate with a variety of third-party software, eliminating data silos and automating the process of data collection. These automations and integrations also help to reduce the reporting burden placed on individuals.

Case Study

Data Quality played a critical role in the Loughborough University Project delivered by Henry Brothers Ltd; a leading main contractor operating across the United Kingdom. For this project, SustainIQ helped streamline data capture and ensure accuracy at source. Visit the link below to read more about this project.

Read more

Learn more

SustainIQ is an integrated ESG reporting platform that unifies all aspects of an organisation’s sustainability activities within a single environment. Businesses use SustainIQ to measure, monitor, and report on their social, economic, and environmental performance in real time.

Our software saves sustainability professionals from wasting time chasing teams, sites, and regions for reporting information. No more unreadable spreadsheets, awkward (and incorrect) calculations, and endless report building. With SustainIQ, simply pull, input or bulk upload data and get access to your custom-built report at touch of a button.

To learn more about SustainIQ or to arrange a demo click here.