Sustainability reporting has become increasingly important as investors, regulators, and civil society—such as community groups, trade unions, NGOs and private citizens—demands greater levels of transparency on the impact of companies on the environment, society and economies.
This demand is reflected in the increase in mandatory reporting requirements around the world.
Where large companies pay tax has a significant impact on sustainable development and many companies are using the Global Reporting Initiative’s GRI 207 Tax Standard to report tax governance, control and risk management, and country-by-country reporting. In some countries this is now mandatory.
Meeting this demand comes with many challenges. Aside of differing ethical stances and business objectives, developing appropriate systems to collect and report data is a key issue.
Digital technologies provide a solution, but in a study I conducted with researchers from Swinburne University we found that lack of allocated funding, limited understanding of the benefits of adoption, the existence of legacy systems, and lack of workforce skills are key barriers.
The lack of quality data presents executives with a significant problem. Not only is accurate and timely sustainability reporting a mandatory requirement across developed and newly emerging economies and essential for reputation, it can also deliver real strategic value.
Firms that can accurately measure, assess, and communicate their environmental and social impacts are better positioned to identify risks and opportunities, build trust with stakeholders, and make informed decisions that drive long-term value for companies and their stakeholders.
Current Challenges
So, what is holding companies back? Despite the growing recognition of the many advantages it offers, sustainability reporting remains complex and often unreliable.
Many organizations still rely on manual processes, spreadsheets, and disconnected systems. This approach not only slows reporting but also increases the risk of errors and inconsistencies in the information gathered, resulting in misreporting. Our research found a significant proportion of companies rarely—and many never—used established or emerging digital technologies for sustainability reporting.
This gap creates a serious barrier to credibility. If sustainability data can’t be collected, aggregated, and verified efficiently, stakeholders have little reason to trust the reports they receive. And perhaps by extension the credibility of the wider organization is called into question.
The challenges extend beyond failing to adopt technological tools—companies face human, organizational, and systemic barriers. For example, professionals skilled in financial technology often struggle to transfer those skills to sustainability data. This means that there is a global shortage of expertise in using digital tools for sustainability reporting specifically.
Legacy systems, inflexible software, and complex jurisdiction- or industry-specific requirements further complicate adoption.
On top of this, organizational inertia is common. Decision makers may struggle to justify the cost of sustainability systems or lack the knowledge to see their value. Without embedding sustainability in the strategy and culture of a company, reporting will remain an afterthought rather than a tool for insight and action.
Transforming Reporting
This is where digital technologies can play a transformative role. In our research, the companies excelling in sustainability reporting share one trait—they leverage advanced digital tools to collect, analyze, and disclose data more efficiently and transparently.
Such tools are widely available—from platforms that track energy usage, waste, and emissions to software that manages sustainability risks, trains employees, engages stakeholders, and traces performance across supply chains.
Digital tools offer multiple benefits. As well as lightening the manual load for staff, they accelerate information flow, enabling quicker and better-informed decision making by improving the quality and quantity of data available. They also reduce the time staff spend on repetitive data-gathering tasks, freeing them up to work on other beneficial projects.
Digital technologies allow companies to consolidate information from internal departments and supply chain partners, providing access to previously unavailable or inaccessible data and improving the accuracy and credibility of sustainability reports.
Beyond reporting, digital tools support scenario planning, target setting, and engagement with investors and other stakeholders, transforming sustainability reporting from a compliance exercise into a strategic advantage.
Looking ahead, digital tools can shape and streamline future sustainability-focused initiatives as well as increasing their efficiency. The opportunities to be grasped are significant.
There are, of course, barriers to adoption:
- Data-related challenges include obtaining verifiable information from beyond an organization’s walls—from supply-chain partners for example—and ensuring its integrity.
- Software-related issues include adapting systems to meet evolving reporting requirements and integrating legacy enterprise resource planning systems with new sustainability tools.
- Human-related obstacles include skills shortages and difficulties transferring expertise from other departments and disciplines to sustainability. Many companies struggle to embed sustainability into their strategy or justify investment in digital systems—recognizing these challenges is the first step toward overcoming them.
A Digital Future
Credible sustainability reporting today must be digital. Companies serious about sustainability can’t afford to treat technology as optional—it is a core enabler of efficiency, transparency, and strategic insight.
Emerging technologies can improve the security, transparency, and sharing of sustainability data, producing more accurate and reliable reporting and better communication with stakeholders. By embracing these tools, companies can transform sustainability reporting into a proactive, strategic process rather than a reactive obligation.
The opportunities are significant. Businesses that embed digital solutions into their reporting processes will be better equipped to measure their impact, engage stakeholders, and make decisions that drive sustainable growth.
The future of corporate sustainability isn’t just about measuring impact—it is about using digital tools to make that measurement meaningful, actionable, and trusted.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.
Author Information
Carol Adams is professor emeritus at Durham University Business School and Chair of the Global Reporting Initiative’s Global Sustainability Standards Board.
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