Sustainability reporting and steering

Darik Kratter

Manager, Technology Consulting, PwC Switzerland

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Laura Warlich

Associate, Technology Consulting, PwC Switzerland

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Challenges and best practices

Evolving regulations and investor expectations are pushing for sustainability reporting to be on a par with financial reporting, as seen with new legislation and standards like the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy. The CSRD, for example, is aimed at changing behaviours through reporting. Hence, sticking to a pure compliance approach will probably be a losing strategy in the long run. Opting for shortcuts might ensure compliance in the short term but doesn’t fully harness the potential competitive advantage of sustainability steering, as companies will be expected to take action to move indicators in the right direction at the right pace. Incorporating sustainability reporting and steering into an organisation is a delicate balancing act between meeting immediate compliance obligations and seizing opportunities in the longer run. Sustainability solutions are one element that can facilitate this balancing act. While technology is rapidly evolving to meet companies’ sustainability requirements, they aren’t mature enough yet. As a result, companies often encounter challenges along their sustainability reporting journey.

This article sheds light on the following three main technology-related challenges that clients face when trying to establish sustainability reporting and steering, and highlights best practices to overcome them:

data availability and management
evolving ESG reporting and steering requirements
tool selection and implementation challenges

Data availability and management

Gathering, preparing, organising and analysing sustainability data from diverse sources to enable effective sustainability reporting and steering is a major challenge in all industries. The lack of a standardised governance framework in combination with multiple data sources leads to inconsistencies in data collection, reconciliation, consolidation and reporting.

One best practice is to redefine the system infrastructure by establishing a unified data model (UDM), enabling the transition to a streamlined and centralised data source for reporting and steering. A UDM aligns data definitions and granularities across functions, simplifying and harmonising information company-wide, which in turn accelerates the digital transformation journey effectively.

In essence, a single UDM serves as a powerful solution to solve inconsistencies, thereby streamlining operations and unlocking numerous advantages, such as:

comprehensive decision-making based on the same set of data for finance, operations, business and sustainability teams
long-term value creation, as sustainability metrics will evolve from reporting to steering
improved consistency and accuracy across various systems and functions.

From fragmented data models…

Group Finance data models are built up in silos across functions.
Source data needs to be ‘normalised’ to avoid multiple submissions at varying degrees of granularity.
Group Finance master data are not managed centrally due to the existing functional silos.

…to a unified data model

Business requirements from all Group Finance functions are incorporated into one common data model.
All submissions are made at the required granularity level to facilitate reporting and reconciliation across different functions (lowest common denominator).
All master data is governed centrally.

One of our clients, an insurance company, wanted to harmonise their Group Finance data model by establishing a UDM. Historically, the individual data models were designed for the needs of the respective functions, thus creating functional silos without any major alignment. This, combined with the increasing complexity and volume driven by regulatory pressures and internal reporting needs, could no longer be sustainably managed. A UDM was urgently needed to break down the legacy finance silos, address existing data gaps and ultimately provide a consistent data foundation for Group Finance to drive the business and report externally. They transitioned from having fragmented data models to a unified data model that covers various business functions and considers differing requirements from all Group Finance functions. All submissions are made at the defined and harmonised granularity level to facilitate reporting and reconciliation across different functions. Accordingly, their UDM brings several benefits, including:

Reporting-artefacts-driven UDM: a UDM that fulfils the requirements of both accounting standards (external e.g. IFRS 17/9) and the management view (internal e.g. performance management, KPIs).
Future-proof harmonised, scalable UDM: a UDM that follows harmonisation principles while allowing the required agility and flexibility to adapt quickly to evolving regulations and structural changes.
Breaking down silo-thinking and strong stakeholder commitment: to ensure that Group Finance stakeholders understand data and how it impacts their business as well as the benefits that a UDM delivers.

Evolving ESG reporting and steering requirements

Adapting to evolving sustainability reporting standards within a tight timeframe poses a significant challenge, impacting a company’s ability for effective decision-making in the long run. Striking the right balance between aligning solutions with the company’s sustainability goals, system infrastructure and operational needs, while ensuring its feasibility for implementation, can be difficult.

What we are currently seeing among clients that are successfully implementing sustainability reporting and steering is the embedding of ESG factors at the core of both short- and long-term business objectives. By doing so, sustainability becomes more than a distant vision; it becomes an essential factor influencing all current and future business-related decisions.

Our pharma client faces challenges in adapting to the evolving regulations and determining the right factors to effectively elevate sustainability reporting information into sustainability steering capabilities . Overcoming these obstacles involves identifying key sustainability drivers and decision-making parameters across all business functions, while also using their compliance-relevant sustainability reporting data. Recognising sustainability’s lasting impact on the company’s business model is crucial for navigating these challenges in a comprehensive way.

To address this, our client has largely integrated sustainability considerations into their ERP transformation, making this a core part of their operations. Their initiative aims to align cross-functional objectives, considering both business and sustainability priorities, and establish a future-proof information infrastructure. By integrating ESG factors into their strategy and systems now, they’re laying the groundwork for future value creation and risk management. Partnering with them on this journey, we’re committed to achieving success by helping them to balance short-term compliance requirements, enhancing transparency in their medium-term and long-term value creation objectives.

Tool selection and implementation challenges

Aligning a technology solution with a company’s sustainability objectives, system infrastructure and operational requirements while assessing its feasibility for implementation can be complex. Historically, most vendors focused on specific capabilities like disclosure management, limiting functionalities such as data modelling, calculation, visualisation and steering. This also holds true for sustainability software providers; thus, it’s highly unlikely that any solution meets all client requirements. The plug-and-play assumption therefore doesn’t work. What’s more, companies often overlook their unique circumstances, individual needs and vision when selecting a tool to support their specific sustainability requirements. One best practice involves conducting a market analysis and assessing company-specific factors like functional specifications, solution roadmap and ESG objectives. We help our clients in performing this in-depth analysis using accelerators to expedite and facilitate their sustainability steering and reporting journey.

ESG Reporting Master*

ESG Data Cloud*

* Fictional sustainability software solution for illustration purposes

The current disruptions and uncertainty in the field of sustainability reporting can cloud companies’ ability to select a suitable sustainability steering and reporting solution. Recognising the need for an external perspective, our client was looking for support in identifying all relevant factors to select the right solution. This can prevent costly changes later on, as clients often focus on functionalities that they’ve used in the past and overlook functionalities that they might need now. Disclosure management can be used as example again. Clients tend to overemphasise this dimension due to the historic importance with loose regulatory standards and previous investor priorities. Implementing our analysis approach, we provided the client with a robust methodology and framework to navigate their sustainability reporting journey effectively. Our client recognised the absence of a perfect solution, prompting them to prioritise a tool that aligns best with their circumstances and aspirations.

Every sustainability journey starts by taking the first step

Wherever you are on your sustainability journey, choosing the right partner is pivotal to achieving success. Benefit from our extensive alliance partnerships and the global PwC network. Explore solutions like the CSRD Manager, which enhances SAP’s Sustainability Control Tower (SCT) with additional content and ready insights, unlocking comprehensive CSRD reporting capabilities. Discover how our services and solutions can empower your growth and help you establish a future-proof system. For further details, visit our website:

Sustainability Technology & Data

Key Insights

Consider establishing a unified data model: a UDM might be an approach that can help you to overcome some of your fundamental data challenges.
Craft your unique sustainability roadmap: set short-, medium- and long-term goals that enable you to continuously integrate ESG aspects into your actions.
Assess and select your sustainability solution carefully: understand your organisation’s circumstances, requirements and vision to optimise your ESG steering solution.