Top 6 Reasons Why ESG Reporting is Tiring Out Professionals

Carbon Accounting Complexity

Carbon emissions calculations have become increasingly sophisticated and demanding. Organizations must now track not just direct emissions (Scope 1) but also indirect emissions from purchased electricity (Scope 2) and value chain emissions (Scope 3). For many companies, Scope 3 emissions can represent over 70% of their carbon footprint but are notoriously difficult to measure accurately.

The challenges include:

• Data gaps across global and complex supply chains
• Evolving methodologies that require constant updates to calculations
• Resource constraints for implementing comprehensive carbon accounting systems

The technical nature of carbon accounting requires specialized knowledge that many sustainability teams don't innately possess. This forces companies to either engage expensive consultants or attempt complex calculations with limited expertise, creating a significant source of reporting fatigue.

Too Many ESG Frameworks

The proliferation of reporting frameworks and standards creates a confusing landscape that exhausts even the most dedicated sustainability professionals. Companies must navigate an alphabet soup of reporting options including GRI, SASB, TCFD, CDP, CSRD, and many more.

Each framework comes with its own:

• Disclosure requirements that often overlap but demand different metrics or methodologies
• Reporting cycles that may not align with financial reporting
• Materiality definitions that can conflict across frameworks

While efforts like the creation of the ISSB (International Sustainability Standards Board) aim to consolidate standards, companies must still report against multiple frameworks to meet the needs of different stakeholders. This creates duplicative work and resource drain as teams must effectively produce multiple reports with similar—but not identical—information.

Materiality Assessment Challenges

The concept of "double materiality" has gained prominence, especially in Europe with the CSRD. This requires companies to assess ESG issues that are not only financially material to the business but also material to society and the environment—regardless of their financial impact. This broadens the scope of issues companies must address.

Conducting thorough materiality assessments involves:

• Extensive stakeholder engagement across employees, investors, customers, suppliers, NGOs, and communities
• Complex prioritization of issues based on stakeholder input, business impact, and societal impact
• Regular reassessments as business operations and stakeholder expectations evolve

When materiality assessments aren't conducted properly, companies risk focusing on the wrong ESG priorities or missing emerging issues that could significantly impact their business. Yet doing them thoroughly requires substantial time and resources, creating another layer of fatigue for ESG professionals.

Data Collection Issues

Perhaps the most common complaint among ESG practitioners is the challenge of data collection. Most organizations lack centralized systems for collecting and managing ESG data, leading to manual, inefficient processes that drain time and resources.

Typical data challenges include:

• Data silos across departments and facilities
• Inconsistent units of measurement and reporting methodologies
• Manual data compilation via spreadsheets and email exchanges
• Limited data validation processes and controls
• Lack of historical data for establishing baselines and tracking progress

These challenges are compounded for organizations with multiple locations across different countries and business units. While digital ESG management solutions are emerging, many companies still rely on unsophisticated tools that require extensive manual intervention, making ESG reporting a dreaded annual exercise.

ESG Questionnaire Overload

Beyond formal reporting through frameworks like GRI or SASB, companies face an onslaught of ESG questionnaires and surveys from various stakeholders:

• Investor questionnaires from ESG ratings agencies like MSCI, Sustainalytics, and ISS
• Customer ESG assessments that are increasingly part of procurement processes
• Industry-specific surveys from trade associations and sector initiatives
• NGO and advocacy group questionnaires focused on specific ESG issues

A single company might receive dozens of these requests annually, each with slightly different questions asking for similar information in different formats. This creates a constant administrative burden that diverts resources from actual sustainability implementation.

The lack of standardization means teams find themselves repeatedly reformatting the same basic information to fit different questionnaire structures, creating immense frustration and inefficiency.

Lost Purpose in Process

Perhaps most disheartening for sustainability professionals is when ESG reporting becomes disconnected from actual business strategy and impact. This manifests in several ways:

• Reporting for reporting's sake with limited internal use of the collected data
• "Checkbox" compliance mentality rather than genuine commitment to improvement
• Insufficient resources to implement initiatives that would improve ESG performance
• Limited executive engagement beyond approving the final report

When sustainability teams spend months compiling reports that don't drive meaningful action, fatigue and cynicism can set in. The administrative burden of reporting can overwhelm the strategic purpose that makes ESG work meaningful in the first place.

The Silver Lining

Despite these challenges, there are encouraging developments that may help alleviate ESG reporting fatigue:

• Framework consolidation through initiatives like the ISSB and alignment between major standards
• Digital solutions for ESG data management and reporting automation
• Greater internal integration of ESG into core business processes and systems
• Increased stakeholder coordination to streamline information requests

For organizations serious about sustainability, investing in robust ESG data management systems and clear processes can significantly reduce reporting burdens while improving data quality and usefulness. By treating ESG reporting as a strategic business function rather than a compliance exercise, companies can extract more value from their sustainability efforts and reduce the fatigue that plagues so many ESG professionals.