ESG, climate and sustainability reporting is already an essential part of business strategy and compliance. Regardless of the political ping pong, there continues to be increasing regulatory requirements, stakeholder expectations and the need for further corporate transparency. Organisations are feeling the pressure to find efficient ways to collect, manage and report on ESG and sustainability data.
However, despite the growing importance of ESG and Sustainability reporting, many organisations face significant challenges in adopting and implementing a structured reporting framework. The complexity of sustainability disclosures, data fragmentation, compliance burdens, and resource constraints make ESG reporting a daunting task for businesses of all sizes.
While some organizations struggle with where to begin, others hesitate due to the perceived costs, lack of internal expertise, or fear of reputational risks associated with disclosing ESG performance. Many also believe that ESG reporting is only necessary for large corporations or those facing regulatory mandates, when in reality, the demand for transparency applies to businesses at all levels.
Despite these challenges, a structured, scalable, and technology-driven approach can simplify ESG reporting, making it more accessible and efficient. Below, we explore the most common barriers to ESG adoption and how businesses can overcome them to create impactful and effective sustainability disclosures.
Common ESG and Sustainability reporting challenges
The belief that ESG and sustainability reporting isn't required
Some businesses assume ESG reporting is optional unless mandated by regulations. However, stakeholder expectations, investor demands, and supply chain requirements are making ESG disclosures a necessity, even for companies that aren’t legally required to report.
✅ How to overcome it:
- Recognise that voluntary ESG reporting can enhance brand reputation, attract investors, and provide a competitive edge.
- Monitor emerging regulations and industry trends to stay ahead of compliance requirements.
- View ESG and Sustianability reporting as a proactive risk management tool rather than just an obligation.
The assumption that reporting is only relevant for large organisations
There is a common misconception that ESG and sustainability reporting is only applicable to big corporations with complex supply chains and global operations. In reality, ESG reporting is increasingly expected from SMEs by customers, investors, and business partners.
✅ How to overcome it:
- Understand that transparency helps secure funding, improve stakeholder trust, and win business from larger clients.
- Focus on material issues relevant to your business rather than attempting to report on everything.
- Utilise affordable ESG tools like ESG Metrix® to streamline the process without requiring a large sustainability team.
Fragmented and inconsistent data
Many organisations struggle with scattered ESG data, stored in spreadsheets, emails, and different business systems. This lack of centralisation and standardisation can lead to reporting inconsistencies and inefficiencies.
✅ How to overcome it:
- Use a centralised ESG data management platform like ESG Metrix® to collect, verify, and structure data efficiently.
- Establish clear reporting processes and assign responsibilities to specific teams or individuals.
- Conduct regular data audits to ensure accuracy and completeness.
Complexity of multiple ESG and sustainability frameworks
Organisations often face confusion when navigating different ESG disclosure frameworks like GRI, ISSB, ASRS, WEF, and the EU CSRD. Each framework has unique reporting requirements, making compliance overwhelming.
✅ How to overcome it:
- Identify the most relevant framework(s) based on your industry, location, what's considered material and stakeholder needs.
- Use ESG reporting software that automates alignment with multiple frameworks.
- Start with one primary framework, then expand as necessary.
Limited resources and expertise
Many companies, lack dedicated sustainability teams or internal ESG expertise, making reporting a time-consuming and difficult task.
✅ How to overcome it:
- Invest in user-friendly ESG reporting software to simplify data collection and reporting.
- Consider outsourcing ESG guidance or leveraging training programs like the ESG Literacy Hub to build internal knowledge.
- Start small and focus on key material priorities rather than attempting to report everything at once.
The perceived cost of ESG reporting
Some businesses view ESG reporting as an expensive undertaking requiring high investment in tools, consultants, and staff.
✅ How to overcome it:
- Use cost-effective ESG and Sustainability reporting solutions like ESG Metrix, which reduces manual effort and compliance risks.
- Focus on long-term value creation—investors and customers increasingly favour businesses with strong sustainability commitments.
- Avoid overcomplicating the reporting process—begin with essential disclosures and scale up as needed.
Lack of organisational buy-in
Without support from leadership and key stakeholders, ESG initiatives often struggle to gain traction.
✅ How to overcome it:
- Demonstrate the business case for ESG and Sustainability, emphasise benefits like risk mitigation, investor confidence, regulatory readiness, and competitive advantage.
- Get cross-departmental involvement, showing how ESG reporting benefits operations, HR, finance, and marketing.
- Use data-driven insights to show measurable impacts of your sustainable efforts.
Balancing transparency with reputational risk
Companies often worry that disclosing ESG and Sustainability data could invite criticism if performance is not perfect or if goals aren’t yet fully achieved.
✅ How to overcome it:
- Shift the mindset from “perfection” to progress, stakeholders value transparency and commitment to improvement.
- Use ESG and Sustainability reports to communicate challenges alongside achievements.
- Implement a structured ESG roadmap, showing how the company plans to improve over time.
Perfection before publishing
Many businesses hesitate to publish their first ESG or Sustainability report due to the fear of getting it wrong or missing key elements.
✅ How to overcome it:
- ESG reporting is an iterative process, it's better to start small and refine over time rather than delaying indefinitely.
- Engage stakeholders for feedback, and adjust reporting strategies as ESG and Sustainability knowledge and data improve.
- Leverage reporting frameworks that provide clear guidelines on what to include.
Not knowing where to begin
With so many ESG, Climate and Sustainability components, companies often feel overwhelmed and unsure about how to start their reporting journey.
✅ How to overcome it:
- Begin by identifying material topics most relevant to the business and industry.
- Conduct a baseline ESG assessment to understand current performance and gaps.
- Use structured tools like ESG Metrix® to guide the reporting process step by step.
While ESG reporting comes with challenges, businesses can streamline the process by focusing on efficiency, clarity, and the right tools. Rather than getting overwhelmed by complexity, companies should start with small, manageable steps—identifying key material priorities, structuring data collection, and aligning with the most relevant reporting frameworks.
Technology, automation, and a structured approach to ESG and sustainability data management can significantly reduce the time and effort required for reporting. Instead of chasing scattered information or struggling with multiple standards, businesses that adopt a centralised, simplified system will find reporting more manageable and less resource-intensive.
The key to success isn’t perfection, it’s progress. By focusing on streamlining data collection, improving internal collaboration, and leveraging the right reporting tools, organisations can turn ESG and Sustainability reporting from a challenge into a seamless part of their business strategy. The key is taking that first step.