ESG (short for Environmental, Social, and Governance) has become a top priority for businesses around the world. It’s not just about values anymore it’s about performance, compliance, and credibility. Investors want it. Regulators demand it. Consumers and employees expect it. And to keep up, companies are turning to digital ESG tools to help them manage all the data, reporting, and strategy that come with the job.
This is where things get interesting: while there’s been a boom in ESG tooling, success stories are still rare. Many companies struggle to make these tools deliver real value. The webinar “How to Make ESG Tooling Work”, draws on decades of experience across corporate and consulting roles and explore the growing pains of ESG tooling adoption. From ERP fiascos in Latin America to budget-busting government IT projects, they remind us that tooling challenges are nothing new. Whether it’s unclear objectives, poorly matched systems, or a lack of human engagement, the root causes of failure tend to repeat themselves.
Yet ESG tooling is not just another tech trend it’s becoming a necessity. With investors, regulators, and society all demanding greater ESG data transparency, businesses can no longer afford to get this wrong. As the webinar reveals, success depends not just on the technology itself, but on how it’s implemented, communicated, and embraced across the organization.
This blog unpacks the core lessons from the session starting with why ESG tooling matters in the first place, and how to make sure it actually delivers on its promise.
Why ESG Tooling Matters
In today’s rapidly evolving regulatory landscape, effective ESG tooling has become indispensable for organizations aiming to ensure compliance, enhance performance, and build stakeholder trust. ESG tooling is no longer a nice-to-have it’s the backbone of credible sustainability reporting. As organizations grapple with complex reporting frameworks like CSRD and EUDR, and increased scrutiny from stakeholders, digital tools offer a way to translate sustainability intentions into traceable, auditable action. These systems bring structure to what is often a chaotic mix of spreadsheets, emails, and siloed data, and create space for you to work on making true impact. But as highlighted in The Overview Effect’s webinar “How to Make ESG Tooling Work,” even the best tools fall short without clarity, leadership, and internal alignment. As Pascal noted,
“If you don’t know what your end goal is, no tool will get you there.”
The rise in tooling reflects a broader shift: ESG data is becoming as material to decision-making as financials.
In fact:
- 89% of institutional investors now consider ESG factors in their investment decisions.
- The CSRD requires up to 1,200 data points, reported in a standardized, digital format.
- Manual data collection still used by many is risky, time-consuming, and error prone.
- Disjointed systems and unclear responsibilities are among the top reasons ESG tools underperform.
Yet, companies still face major implementation pitfalls from poor system integration to employee resistance. Fragmented data processes remain a top reason ESG efforts stall. Tooling is critical not just to ensure compliance, but to improve real-time strategy, reduce reputational risk, and empower internal teams with actionable insights.
When done well, though, the payoff is big. As both Nick and Pascal emphasized, effective ESG tooling can:
- Improve data quality and reduce greenwashing risk
- Enable strategic decision-making and Net Zero forecasting
- Empower employees to see their contribution to sustainability
- Increase transparency and build stakeholder trust
The bottom line is that ESG tooling matters because data matters. But success doesn’t come from tech alone. As the webinar emphasized, tools need to be matched with purpose, people, and process. Otherwise, you’re just collecting data without direction.
Key Components of an Effective ESG Tooling Strategy
Getting ESG tooling right isn’t just about picking a platform it’s about building a system that enables your organization to actually be sustainable, not just report on it.
That means pairing the right tools with clear roles, smart processes, and data that’s structured, usable, and decision ready.
When these elements work together, ESG tooling shifts from being a reporting obligation to becoming a driver of strategic progress and sustainability impact.
1. Data Collection & Automation
Effective ESG reporting begins with accurate data collection. There are two distinct user roles:
- Data Suppliers: Individuals responsible for entering data into the system.
- KPI Owners: Those accountable for specific ESG metrics and driving related targets.
Automating data collection offers several benefits:
- Reduced Errors: Automation minimizes manual entry mistakes, enhancing data accuracy.
- Improved Auditability: Automated systems provide clear data trails, simplifying audits.
- Enhanced Efficiency: Streamlining data processes allows for timely reporting and decision-making.
These advantages are echoed in industry analyses, emphasizing the role of automation in improving ESG data management.
2. KPI Ownership & Target Setting
Assigning clear ownership of ESG KPIs is essential — but ownership means more than assigning names to numbers.
In the webinar, we introduced the concept of “ambition owners”: people responsible for driving progress on specific sustainability goals. These owners aren’t just accountable — they’re also empowered to engage the right users, align stakeholders, and translate KPIs into action.
Understanding user roles (e.g. Viewer, Contributor, Controller) is key. Different roles need different types of information, engagement, and support. Ownership starts by understanding their needs and ensuring they feel involved, not just informed.
One important insight: track adoption before performance.
If people aren’t using the tooling, your data means nothing. Start by measuring whether users are actually engaging — then build from there. Aligning sustainability goals with measurable KPIs enables organizations to:
- Monitor Progress: Regularly assess advancements toward ESG objectives.
- Drive Performance: Encourage proactive measures to meet or exceed targets.
- Enhance Transparency: Provide stakeholders with clear insights into ESG initiatives.
Industry experts stress the importance of selecting relevant KPIs to effectively measure and report on ESG performance.
3. Integration with Business Strategy
ESG considerations should be embedded within the core business strategy, moving beyond mere compliance. The webinar emphasized the necessity of using ESG data to inform strategic decisions, thereby differentiating the organization in the marketplace.
Integrating ESG into business operations allows companies to:
- Enhance Decision-Making: Utilize ESG insights to guide strategic choices.
- Mitigate Risks: Identify and address potential ESG-related challenges proactively.
- Build Competitive Advantage: Demonstrate commitment to sustainability, appealing to investors and customers alike.
This strategic integration is supported by research highlighting the benefits of incorporating ESG principles into business planning.
By focusing on these key components data automation, KPI ownership, and strategic integration organizations can develop an effective ESG tooling strategy that not only ensures compliance but also drives sustainable growth.
The Role of ESG Tooling in Compliance & Beyond
ESG tooling is becoming an essential part of how organizations stay compliant, respond to growing data requests, and create long-term business value. Whether it’s a regulatory requirement like the CSRD or requests from investors and clients, the pressure to report clear, credible sustainability data is only increasing.
Here’s how ESG tooling helps companies stay ahead:
Simplifies Compliance and Reporting
ESG tooling supports a wide range of frameworks from CSRD to EUDR, GRI, SASB, and beyond by centralizing data and improving consistency across reports. Instead of chasing spreadsheets, teams can rely on structured systems that reduce manual errors and provide real-time access to performance data.
→ This not only makes reporting easier, but also builds trust with auditors and stakeholders.
Tracks KPIs and Supports Materiality
One of the core benefits of ESG tools is the ability to set and track KPIs ensuring the organization isn’t just reporting, but actually managing performance. The webinar also emphasized the role of ambition owners who are individuals responsible for specific ESG goals and how tools can help monitor their progress.
→ Tools can also support Double Materiality Assessments (DMA), helping companies identify what’s financially material and what matters to stakeholders.
Moves Beyond Compliance to Competitive Advantage
Increasingly, companies are seeing ESG tooling as more than a reporting solution it’s a way to differentiate.
→ By integrating ESG data into business decision-making, companies can anticipate risks, find efficiencies, and stand out in a crowded market.
→ A solid ESG tooling strategy enables more than compliance it lays the groundwork for innovation and resilience, frees up resources to move from reporting to developing impact initiatives.
Conclusion
As ESG expectations grow, so does the need for smarter systems. The right tooling doesn’t just help you report it helps you lead. It creates structure and credibility around your data, clarity in your KPIs, and momentum toward your goals.
Companies are no longer waiting for regulation to act they’re building ESG infrastructure that supports long-term value.
Whether you’re just starting to explore ESG tooling or looking to scale existing systems, now is the time to act.
If you’re ready to take the next step, we invite you to:
- Watch the recorded webinar and access the slides for a deeper look into ESG tooling in action.
- Join an upcoming session to explore specific use cases and get practical advice.
- Or simply reach out for a conversation over coffee, sometimes that’s the best place to start.
ESG success will never be achieved by only focusing on compliance. We invite companies to prioritize building something that lasts.
Sources:
Accenture. (2023) ESG compliance is about more than reporting—it’s a competitive advantage. Available at: https://www.accenture.com/il-en/insights/consulting/esg-reporting-compliance-competitive-advantage (Accessed: 25 April 2025).
Compact. (2022) Mastering the ESG reporting and data challenges. Available at: https://www.compact.nl/articles/mastering-the-esg-reporting-and-data-challenges/ (Accessed: 24 April 2025).
Financial Times. (2023) Private equity sees ESG’s inherent value. Available at: https://investec.ft.com/private-equity-sees-esgs-inherent-value (Accessed: 24 April 2025).
oAppsNet. (2024) How Automation Can Be Applied to ESG Reporting. Available at: https://www.oappsnet.com/2024/07/how-automation-can-be-applied-to-esg-reporting/ (Accessed: 24 April 2025).
PwC. (2023) 2023 Global Investor Survey: Investors want companies to prioritize action on climate and other ESG issues. Available at: https://www.pwc.com/gx/en/services/sustainability/esg-investor-survey.html (Accessed: 17 April 2025).
Quantive. (2024) A Guide to ESG Frameworks and Reporting Standards. Available at: https://quantive.com/resources/articles/esg-frameworks (Accessed: 17 April 2025).
Rozanski, M. (2024) ‘Why Quality Data Is Essential for ESG Success’, Osense, 25 March. Available at: https://osense.ai/resources/why-quality-data-is-essential-for-esg-success (Accessed: 25 April 2025).
RSM US LLP. (2024) The importance of integrating sustainability and ESG technology. Available at: https://rsmus.com/insights/services/business-strategy-operations/the-importance-of-integrating-sustainability-and-esg-technology.html (Accessed: 25 April 2025).
RPS Group. (n.d.) ESG Key Performance Indicators in Private Equity. Available at: https://www.rpsgroup.com/services/advisory-and-management-consulting/esg-consulting/esg-performance-indicators-in-private-equity/ (Accessed: 24 April 2025)
Spectreco. (2024) AI and Automation: The Future of ESG Reporting and Governance. Available at: https://spectreco.com/ai-and-automation-the-future-of-esg-reporting-and-governance/ (Accessed: 24 April 2025).
Strategy& (PwC). (2023) Gaining competitive advantage through ESG. Available at: https://www.strategyand.pwc.com/de/en/industries/industrials/competitive-advantage-esg.html(Accessed: 25 April 2025).
Supply Chain Digital. (2023) Automate ESG Data Collection to Drive Competitive Advantage. Available at: https://supplychaindigital.com/about/automate-esg-data-collection-to-drive-competitive-advantage (Accessed: 24 April 2025)
The Overview Effect. (2024) How to Make ESG Tooling Work [Webinar]. Delivered: 11 April 2024. Available at: https://www.youtube.com/watch?v=0iwTgGvPdXc&ab_channel=TheOverviewEffect (Accessed: 17 April 2025).
Zapflow. (2024) 5 Common Pitfalls in ESG Reporting Processes. Available at: https://www.zapflow.com/resources/blog/5-common-pitfalls-in-esg-reporting-processes (Accessed: 17 April 2025).