ESG technologies

Making use of ESG technologies to meet growing regulatory requirements

Your expert for questions

Gunther Dütsch - Partner, Sustainability Services bei PwC Deutschland

Gunther Dütsch
Partner, Sustainability Services at PwC Germany
Tel.: +49 160 3739019

Technology: the success factor for your sustainable transformation

In today’s business landscape, the importance of sustainability cannot be underestimated by any company. This is partly due to pressure from investors, consumers and employees, but the most important driver is regulation. Non-financial reporting is becoming mandatory for many companies as a result of legislations such as the European Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, the Carbon Border Adjustment Mechanism (CBAM), the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, or LkSG) and more to come.

Organisations are faced with the complex task of implementing these and many other ESG requirements. But this isn’t just a question of meeting regulatory requirements in the short term. It presents a significant opportunity to establish a robust ESG IT architecture for your company in the long run, providing integrated access to ESG data and giving the necessary insights for decision making. By embracing this opportunity, you can not only meet current regulatory demands but also position your organisation for long-term success in the realm of sustainability.

“Companies can no longer rely on manual, informal processes and spreadsheets, as these make it difficult to meet compliance standards and conduct audits. Instead, they need to improve their existing systems and processes, and promote the integration of new IT solutions. This is the only way they will be able to effectively measure, steer and manage their sustainability performance.”

Gunther Dütsch,Partner, Sustainability Services at PwC Germany

ESG technologies provide a viable solution to overcome these new regulatory challenges. Our experts can support you with the necessary regulatory, sustainability and IT expertise to assist your company in setting up the best ESG IT architecture for your needs.

How PwC can help you build an ESG IT architecture

We support you throughout your entire ESG technology journey – from developing a solution to implementing it.

Drawing up the implementation roadmap

Identifying opportunities and blind spots in your IT architecture

We strive to find the best-fit ESG technology for your business.

Expanding your vision to other business areas

Building tailor-made ESG IT solutions

Developing and testing an MVP and integrating it into your existing IT infrastructure

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Growing regulations for sustainability reporting

The CSRD, the EU Taxonomy, the LkSG and the new Carbon Border Adjustment Mechanism are perhaps the most prominent current examples of the increase in regulation, but are by no means the only ones. Requirements relating to environmental protection, data protection and labour law are increasing. Compliance with both environmental and human rights standards in global supply chains is also required by laws such as the LkSG and its upcoming European counterpart the Corporate Sustainability Due Diligence Directive (CSDDD), which will extend to subsidiaries abroad.

Global standards such as the Global Reporting Initiative (GRI), the Greenhouse Gas (GHG) Protocol and the Californian Climate Corporate Data Accountability Act are compounding these requirements and driving the message home: transparent reporting and consistent sustainability information throughout the value chain are becoming increasingly important – and increasingly complex.

Managing data points, which vary in content and number depending on the law or standard in question, is a major challenge. For example, the CSRD requires the collection of up to 1,000 quantitative and qualitative data points, with a particular emphasis on the quality of the data collected. The variety and complexity of ESG regulations make compliance a difficult matter. This is particularly true for international companies.

Key challenges in sustainability reporting

  • While sustainability reporting is progressively becoming more standardised, numerous companies face challenges in collecting, processing, and reporting the necessary data. This is primarily due to the fact that, unlike financial reporting, companies often lack experience in this domain and do not have well-established systems and data structures to rely on.
  • Companies that do not comply with these laws risk financial impacts – for example, from penalties, fines and legal disputes. 
  • In case of LkSG, fines of up to €800,000 or 2% of the annual turnover may be imposed on companies with an average annual turnover of €400 million. In addition, companies risk significant damage to their reputation and image, as well as a loss of trust from customers and investors. This can also lead to significant financial losses in the long term.

Under these circumstances, it is unsurprising to witness a significant growth in the market for software solutions related to sustainability. Based on a report by Fortune Business Insights, the market segment for sustainability software solutions is projected to reach a value of €57 million by 2030, with an average annual growth rate of approximately 21% during this period.

Five reasons for using ESG technologies

ESG technologies help companies to comply with social, environmental and governance standards, meet legal requirements, promote integration in business decisions and contribute to a more sustainable economy.

By implementing appropriate ESG technologies, companies can streamline the reporting and steering process and generate standardised information that can be easily compared and utilised by management throughout the entire organisation.

ESG technologies play a crucial role in enhancing decision-making through insights and contribute to improving transparency within internal processes.

Automation and efficiency improvements enabled by ESG technologies make an important contribution to reducing resource consumption and can minimise your environmental footprint.

The advancements in AI-powered analysis of data sets provide a solid foundation for making informed decisions when optimising sustainability strategy and reporting. This empowers companies to gain deeper insights and a comprehensive understanding of relevant patterns and trends in the area of sustainability.

ESG technologies

“If companies effectively use ESG technologies to help with their reporting, they can increase efficiency, achieve savings and bolster their resilience in the long term.”

Gunther Dütsch,Partner for Sustainability Services at PwC Germany
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Gunther Dütsch

Gunther Dütsch

Partner, Sustainability Services & Climate Change, PwC Germany

Tel: +49 160 3739019

Judith Sturm

Judith Sturm

Manager, Sustainability Services, PwC Germany

Tel: +49 160 4336800

Estelle Places

Estelle Places

Manager, Sustainability Services, PwC Germany

Tel: +49 175 6171254

Katharina Trump

Katharina Trump

Senior Manager, Sustainability Services, PwC Germany

Tel: +49 151 56895925