What is the EU Taxonomy?
1 min
Level
In this article, we'll break down what the EU Taxonomy is, how it works, the criteria for sustainable activities, and its broader impact on businesses and financial markets.
ESG / CSR
Industries
MEASURE
ACT
COMFORM
What is ESG Data and How to Use it?
Level
Key Topics You'll Learn About in This Article
- Long-term benefits of ESG Data
- Difference Between ESG Data, ESG scores, and ESG Reporting
- Steps to be successful in these ESG-related activities
ESG scores and ratings, otherwise known as data on a company's current responsibility and governance practices, can help companies to comply with regulations and international agreements in addition to committing to environmental impact social responsibility.
According to IBM's 2025 analysis, 98.6% of S&P 500 companies published sustainability reports in 2023 alone, revealing the growing trend to communicate progress on ESG data collected.
ESG performance is tired to a company's environmental impact, meaning that data can help companies interested in pursuing ESG data excellence to demonstrate measurable progress, attract investment capital, and build stakeholder trust through transparent reporting.
In fact, you may have heard that investors and other stakeholders care about your ESG score or rating, but why?
In this article, we'll explain what ESG data is, how ESG data is used, the different types of ESG data, how to disclose ESG data, and how ESG data could help your company improve its business performance long-term.
What is ESG Data?
Definition of ESG Data
ESG data provides insight regarding the environmental, social, and governance (ESG) components or an organisation or investment.
The ‘E’, ‘S’, ‘G’ in ESG data stands for, “Environmental, Social, and Governance” – otherwise known as the three key components that companies will use to determine the environmental efficacy and sustainability of their cooperation.
Measuring and reporting ESG data is a way for companies to establish transparency, trust, and accountability in their environmental goals so that they can appeal to future investors, employees and customers.
Close
What are the Benefits of ESG Data?
ESG is a beneficial for any organisation working to improve upon their environmental, social, and governance goals – and can be used for tangible communication with employees, stakeholders, and other business partners.
The drop down sections below will further reveal the benefits of seeking to acquire new intel on social responsibility and governance in addition to environmental data:
🤝 Strengthen Social Impact Strategy
New intel on workforce practices, community engagement, and DEI metrics helps companies enhance their social responsibility strategy and stay aligned with evolving expectations.
🧠 Support Ethical & Informed Decision-Making
Governance data such as board diversity, anti-corruption efforts, or transparency ratings inform ethical leadership, risk mitigation, and long-term resilience.
📊 Improve ESG Reporting Accuracy
Gathering consistent social and governance data alongside environmental metrics leads to stronger, more credible ESG disclosures — and better stakeholder trust.
Additional Benefits of Collecting ESG Data Within Companies
Here are some additional benefits of seeking to prioritise and manage ESG data:
Establish Business Trust
First of all, sharing respectable ESG data sets can help a business grow by establishing trust with governments for future funding, which in turn creates new business opportunities that would not be financially feasible otherwise.
The growth provided by government funding as a result of a good ESG data quality ultimately creates other lucrative opportunities – meaning recording and sharing ESG data will continue to create new pathways to success for any company or organisation interested in growing their business.
“ ESG [environmental, social, and governance] is climate change, worker conditions, diversity; it's everything. – (McKinsey & Company). ”
Financial Performance
ESG data is also profitable as it helps to provide employees with new experience and boost productivity, as reputable ESG data will allow companies to recruit and sustain motivated employees – which will overall better convey the company's business mission. Therefore ESG data vendors can also help with ESG investing and helping stakeholders to make an investment decision.
Think of it this way: when you go to a restaurant – you are more likely to return and leave a positive review if the waiter you had was friendly and created a warm dining experience, for you. The same is true of all businesses or companies, even if you aren't physically visiting the business or company.
For instance, when you have a kind, empathetic, and patient person and phone support for the product you bought that is malfunctioning – doesn't it make you want to remain a loyal customer, even if you had a technical difficulty?
ESG data will increase employee satisfaction, and therefore – increase customer loyalty, which will overall support the business in its continued growth.
What is an ESG score?
An ESG score is a measurement of how well your company is operating across all components of ESG data: including economic, social, and governance factors.
The vertical timeline below will reveal the process of how ESG data is collected and an ESG score is distributed:
-
1. Determine Scope 📋
Identify ESG topics to report on — such as emissions, energy use, board diversity, labor practices, and supply chain risks. -
2. Select Frameworks 📚
Choose ESG standards (like GRI, SASB, CDP, or TCFD) to guide reporting and data collection formats. -
3. Collect Internal Data 🧠
Gather quantitative and qualitative information from across departments — including HR, operations, legal, and finance. -
4. Validate & Audit Data ✅
Perform internal reviews or third-party audits to ensure ESG data is accurate, verifiable, and consistent. -
5. Submit to Ratings Agency 📤
Provide disclosures to ESG ratings agencies (like MSCI, Sustainalytics, or S&P Global) through platforms or reports. -
6. Score is Calculated 📈
ESG agencies use proprietary formulas to assess risk, performance, and transparency — resulting in a final score or letter grade. -
7. Score is Publicised 🌐
ESG ratings may appear in investor tools, databases, or public platforms — influencing reputation, rankings, and investment interest.
Close
ESG Data Collection and Reporting: What's the Difference?
What is ESG Reporting?
ESG reporting is when you share your ESG score and data with other investors, potential business partners, employees, and customers with the intent to establish greater transparency and promote corporate sustainability.
Benefits of ESG Reporting
There are many benefits to ESG reporting, such as by how it demonstrates accountability in environmental social and governance and helps companies to align with the values depicted by the Global Reporting Initiative (GRI).
For instance, investors will often use ESG reporting to determine whether or not a company is an example of character in terms of reducing their carbon footprint – and if there are benefits to investing in a company with good ESG scores.
If your company decides to calculate and clearly define their carbon footprint through their ESG data, it could ultimately benefit their mission – as it provides precise numerical data regarding the reduction of their carbon footprint, and the ways the company sets out to seek environmental equity.
The flip cards below (move cursor over card to flip) will further breakdown the benefits of reporting ESG data:
📉 Improved Risk Management
ESG reporting helps companies identify long-term risks early — from climate threats to supply chain issues — and take action.
🤝 Increased Stakeholder Trust
Transparent ESG disclosures build trust with investors, customers, employees, and regulators.
🌍 Attracts Sustainable Investment
Investors are increasingly seeking ESG-aligned companies to reduce portfolio risk and support responsible growth.
🧠 Enhances Internal Awareness
Reporting ESG data boosts internal understanding of environmental, social, and governance performance company-wide.
While ESG reporting is optional, it can encourage investors to take part in your project by providing data pertaining to your carbon footprint.
What Are the Three Main Components of ESG Reporting?
Environmental
The ‘E' in ESG reporting refers to the company's environmental energy usage: including carbon emissions, conservation of energy, animal treatment, water usage, and more.
A company's ESG data will be calculated through the amount of energy they use and its overall beneficial or negative impact to the environment.
If potential investors view the company as a poor example of moral character in terms of their willingness to be environmentally friendly – they may choose to invest in a company more willing to reduce their carbon footprint.
Social
The ‘S' in ESG reporting refers to the company's social interactions – and how they reduce or do not reduce their carbon footprint throughout their communicative methods.
The ‘S' in a company's ESG score could be calculated on a number of factors: such as diversity, inclusivity, employee contribution, work expectations, gender equality, and customer satisfaction.
The ‘S' in the overall ESG score is imperative in the overall calculation, as no company can exist without its people – both customers and employees involved.
Governance
The ‘G' in ESG reporting refers to the company's “government” – in other words, how they manage and execute all of their business activities. This is also known as governance data.
For instance, this ESG information can be calculated based on the number of current or potential internal conflicts within the company.
This component of the over ESG score can also help determine if the company will be a valuable investment later on down the line after the investor's initial interest. In addition, this unstructured data can help rating agencies determine if companies are meeting regulatory requirements – such as regulatory reporting, providing a balance sheet when necessary, and complying with EU taxonomy.
The three way summary cards will break down the differences between environmental social and governance data collection in ESG:
🌱 Environmental Data
Focuses on ESG factors like emissions, energy use, and resource consumption. Helps ESG data partners quantify environmental impact and track climate goals.
👥 Social Data
Covers inclusion initiatives, employee engagement, and human rights. Used to educate ESG data stakeholders on how company culture and policies affect society.
📊 Governance Data
Includes executive pay, board diversity, and compliance metrics. Governance data helps assess leadership accountability and guides ESG data partners in risk analysis.
What is the Difference Between ESG Data and ESG Reporting?
The main difference between ESG data and ESG reporting is that ESG data refers to the raw metrics regarding a company's performance on ESG, whereas ESG reporting is the process of organising, analyzing, and communicating those sustainability metrics to stakeholders through structured reports and disclosures.
ESG data includes specific metrics such as company's energy usage, carbon emissions, labor practices, and board composition, while ESG reporting organises this information from various data sources into structured reports that agencies use for ratings and analyst scoring.
The battle cards below will further break down the differences between ESG Data and ESG reporting:
📊 ESG Data
🛠 Establishes processes for collecting and storing ESG data
🌍 Includes metrics on a company’s energy usage, carbon emissions, and water consumption
👥 Tracks labor practices, diversity, executive pay, and anti-corruption policies
🔍 Provides raw input for identifying ESG risks and opportunities
📝 ESG Reporting
📢 Communicates performance on ESG issues to stakeholders
💡 Discloses labor practices, energy usage, and carbon emissions in a public-facing format
🎯 Engages and educates investors, customers, and partners on ESG importance
📈 Demonstrates accountability, transparency, and long-term value creation
Now that we've covered what an ESG score is, let's talk about why calculating and clearly defining ESG data and scores are crucial to a company's way to future success.
Importance of Collecting & Reporting Environmental Social and Governance
Collecting and reporting ESG data is important as investors don't usually have time to play detective and scope out every facet of every company in the working field. That's why sharing your ESG data can save both you and them the time and trouble of an investment not benefiting one another.
“ Investors now see inaction on climate change as a key material risk. – (World Economic Forum). ”
Here are some of the reasons why seeking to collect and report risk management, sustainability, and ESG data is indispensable in 2025:
Transparency
An ESG score can help an investor clearly understand your company's mission and its overall effectiveness thus far.
Take work-life balance, for example. If a company has a lower ‘S' score within their already calculated ESG score – even if the other scores have excellent results, an investor may strongly value that the employees in a company have the proper time to take vacations and get their mind off of work so that they may return to the office rejuvenated with new ideas and be ready to take stronger action after proper rest & relaxation.
These reports allow investors to view your company as a whole, so that they may make a calculated decision whether this is the right investment for them.
Trust
Trust is a difficult component to find solace with just about anything in life: relationships, strenuous situations, and of course – jobs, especially in recruiting and employee retention. It's easy for a company to say that they care about the environment, but numerical data doesn't lie – and can make or break trust for data partners and providers.
“ Trust has always been a main driver to succeed in business…trusted companies have more loyal customers, lower employee turnover, higher revenue and profitability, and higher market value. –(Mercuri International). ”
An ESG score can help make things crystal clear to see who really plays their part to reduce their carbon footprint.
Liability
If everyone says they care about the environment, and many of those companies claiming this really do reduce their carbon footprint – how does a decision get regarding data in ESG ratings get made?
An ESG score can help an investor determine who has made the strongest efforts to reduce their carbon footprint and benefit the environment. Remember – people tell lies, but calculated numbers don't!
Therefore, anything a company says regarding their carbon footprint can be revealed with the use of an ESG score. Anyone can say their thumb is green – but an ESG score will show who is really dedicated to finding as many ways to benefit the environment as possible.
This is ultimately why an ESG score is so beneficial in allowing an investor to understand your company's overall carbon footprint.
How Can ESG Data Ultimately Help Your Company and Its Success?
Committing to measuring and making ESG data available to the public provides a great sense of trust for future investors and customers – which ultimately increase revenue and open new business opportunities.
Considering ESG data outputs has a direct correlation to corporate sustainability. In other words, if your company can establish a routine of calculating your ESG data and reporting it to all future investors, employees, and customers – it ultimately establishes a greater sense of trust between all third parties that contribute to your business.
This newfound trust from seeking to determine ESG scores and working with ESG data will allow for the other sectors of your business to grow, which allows all three pillars of corporate sustainability – environmental, economic, and social – to flourish and prosper. Furthermore, seeking to manage ESG issues may allow companies to mitigate risks, boost supply chain resilience, and achieve industry benchmarks with ease in comparison to competitors who fail to delegate ESG or sustainability.
The flip cards (move cursor over card to flip) below will reveal the additional benefits of ESG data for your company and its long-term success:
👩💼 Its impact on hiring, recruiting, and employees
ESG initiatives attract mission-driven talent, boost employee retention, and enhance workplace culture — key drivers of long-term success.
📉 ESG ratings and analyst reports reduce the chances of greenwashing
Verified third-party ratings enhance transparency and trust, making ESG claims more credible and protecting brand reputation.
⚖️ Labor practices (human rights)
ESG data on labor standards shows your commitment to ethical treatment, improving stakeholder confidence and lowering supply chain risk.
🧑⚖️ Company’s board composition & executive
Disclosing governance metrics like board diversity and executive pay builds investor trust and supports responsible leadership narratives.
Overall, maintaining your ESG score as accessible information to third parties is an easy first step to establishing a more environmentally friendly business.
5 Steps to Success in Using Your ESG Data
If your organisation has started to reduce your carbon footprint, but don't know the step-by-step process used to determine ESG scores – read more below on how to share your reduced-carbon-footprint-calculation with the world.
1. Strategy
The first step to success in your ESG reporting is your strategy.
You should take calculated steps to use your company's mission to your advantage for an overall better ESG score. Remember, effective ESG reporting requires aligning your sustainability data with your company's main mission, products, and services.
For example, if your company is a vegan restaurant – don't talk about how little electricity you use, but talk about how much less water you are using to cook your meals as a result of plant-based cooking – and how this is ultimately reducing your carbon footprint.
2. Approach
The next step to success in your ESG reporting is your approach.
Is the current plan to reduce your carbon footprint being well executed, or is it time for Plan B?
It is integral to your company's ESG score to constantly assess if the current measures you are taking to reduce your carbon footprint are proving successful.
Don't be afraid to think of or try new ways to benefit your company and the environment.
3. Implementation
The next step to success in your ESG reporting is how you implement your values into reducing your carbon footprint.
The components of a well calculated ESG score shouldn't be thought of as another to-do-list, but should rather be made as an effort to seamlessly implement the values and defining characteristics of an ESG score into your company.
For example, if you have a make-up brand with select cruelty-free products – make an effort to transform some of your current products to have new, more environmentally friendly options.
This will show investors not only continued creativity and diligence, but a strong sense of urgency to find new, innovative ways to reduce your carbon footprint.
4. Assist
The next step to success in your ESG reporting is your willingness to publicly share those ESG scores.
If your company has already started to share their ESG scores – don't stop!
The key to success is your willingness to sustain and even improve upon your current scores, and more importantly – to share your calculations with others to communicate your progress, especially to ESG data partners and providers.
5. Ensure
The last step to success in your ESG reporting is your to remain dedication to both current and future issues that could impact your ESG score
Collecting a lot of data can mean a lot of questions. So, it's important to stay ahead of any potential issues – as this will show investors how dedicated you are to helping the environment.
Dedication to ensuring the calculations for your ESG data is accurate and up to date will delineate your company's passion towards carbon footprint reduction.
Overall, if you're looking for a way to share how you reduce your carbon footprint with others, such as future investors – measuring and reporting your ESG data is the way to achieve both your company's environmental and financial goals.
What About Greenly?
If reading this article about ESG data and reporting has made you interested in reducing your carbon emission to further fight against climate change – Greenly can help you!
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.
Don't wait any longer, take the first step towards reducing your carbon footprint by requesting a free and non-binding demo with one of our experts today and finding the solution that best fits your business needs.
Close
Sources
G&A Institute https://www.ga-institute.com/research/ga-research-directory/sustainability-reporting-trends/2024-sustainability-reporting-in-focus/
WorldBank https://databank.worldbank.org/source/environment-social-and-governance-(esg)-data
McKinsey https://www.mckinsey.com/featured-insights/quote-of-the-day/march-29-2022
WeForum https://www.weforum.org/stories/2021/07/comparable-esg-investors/
Mercuri International https://mercuri.net/insights/trust/
European Commission https://finance.ec.europa.eu/sustainable-finance/overview-sustainable-finance_en
Science Direct https://www.sciencedirect.com/science/article/pii/S221484502200103X
PwC Research https://www.pwc.com/us/en/services/esg/library/esg-data-collection-reporting.html
More articles
View all
The Carbon Border Adjustment Mechanism (CBAM)
1 min
Level
In this article, we break down what the EU CBAM is, how it works, and what businesses need to do to comply.
Impacts, Risks, and Opportunities (IRO) for CSRD Reporting
1 min
Level
In this article, we’ll break down what IROs are, how to identify and assess them, and what CSRD requires in terms of disclosure.
10 Reasons to Track a Corporate Carbon Footprint
1 min
Level
In this article, we’ll explain what a corporate carbon footprint is, why it’s important, how it is measured, and reasons why your company should track it too.