As organisations worldwide continue to prioritise sustainability, the demand for Environmental, Social, and Governance (ESG) data has rapidly increased. Companies are under pressure not only to report on their ESG performance but also to ensure that the data they present is valid in terms of accuracy and auditability. At Delta Capita, we recently conducted a poll among our clients, partners and industry professionals to better understand which aspects of ESG data collection and validation matter most to them.
With 47% of the votes, having the most appropriate Metrics and confidence about the Validity of those metrics emerged as the most critical aspects of ESG data collection and reporting. This outcome reflects a broader trend across industries where many stakeholders have become sceptical about ESG credentials and increasingly demand precise, consistent and verifiable ESG data to guide decision-making, assess risks and measure impact. But what exactly does this emphasis on getting ESG data right mean for companies—and how should organisations respond?
The Growing Significance of ESG Data
ESG data is an essential component of corporate reporting and stakeholder communication. In the past, the focus was substantially on the “green” aspects of a company’s behaviour, with a secondary focus on social responsibility. Today, investors, regulators and consumers are using ESG data to assess companies' long-term viability as well as their impact on the environment and society Companies are being evaluated not just on their financial performance but also on how they manage ESG risks and opportunities.
As ESG reporting becomes increasingly mainstream, the accuracy and validity of this data are under scrutiny. It’s not enough for companies to publish ESG data; that data must be credible and grounded in robust, transparent methodologies. This brings us to the two critical components identified in our poll: appropriate Metrics and demonstrable Validity.
Why Metrics Matter
Metrics form the foundation of any ESG reporting. They allow companies to measure performance, set benchmarks, and track progress over time. The metrics companies choose to disclose are key indicators of how well they are managing their environmental and social responsibilities and whether they are aligning with governance best practices.
However, simply having metrics isn’t enough. It’s essential to ensure that the right metrics are being captured—those that are material to the business and relevant to stakeholders. Companies must identify and report on the metrics that reflect the most significant impacts on the environment, society, and governance practices and drive the right behaviours The metrics should be aligned with industry standards, such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-Related Financial Disclosures (TCFD). Indeed, aligning with both international and local reporting standards drives complexity for global firms that operate in multiple jurisdictions.
Choosing appropriate metrics can be challenging, as ESG factors vary widely across industries and geographies. However, the importance of selecting and measuring the right ESG data is critical for ensuring that stakeholders—whether investors, regulators, or customers—receive a clear and accurate view of a company’s ESG performance.
The Critical Role of Validity
Alongside metrics, proving Validity was highlighted as the most significant factor for nearly half of the respondents in our poll. This underscores the need for companies to not only collect the appropriate ESG data but also ensure that the data is accurate, consistent, and verifiable.
In the absence of reliable data, ESG reporting can lose its credibility and create risks for companies, including regulatory scrutiny, reputational damage, and loss of investor confidence. This makes validation processes whether internal or external, absolutely essential.
There are several best practices companies should consider to ensure the validity of their ESG data:
• Third-Party Audits: Companies should consider external audits or verification of their ESG data. Third-party validation provides credibility and assures stakeholders that the data has been rigorously reviewed and verified.
• Consistent Methodologies: Organisations need to use consistent methodologies across reporting periods. This allows for comparability and ensures stakeholders can trust the accuracy of the data presented.
• Internal Controls: Strong internal controls should be in place to monitor the collection, aggregation and reporting of ESG data. These controls should include regular reviews, standardised processes, and clearly defined roles and responsibilities.
At Delta Capita, we’ve seen firsthand how companies are increasingly seeking to bolster their ESG data validation processes to protect against reputational risks and demonstrate accountability to stakeholders. As more companies report on their ESG performance, data integrity will be a competitive differentiator. Those organisations that prioritise accuracy and transparency will build stronger relationships with investors, customers, and regulators.
Looking Forward: A Call to Action for Companies
The results of our poll demonstrate that companies are becoming more attuned to the demands of stakeholders for accurate and verifiable ESG data. While appropriate metrics and demonstrable validity are top of mind for many organisations, it’s clear that this is only the beginning. As reporting standards continue to evolve, companies must be proactive in refining their ESG strategies and data processes.
For companies that have yet to prioritise these aspects, now is the time to act. Accurate metrics and valid data are no longer optional—they are critical to long-term success in a world where ESG considerations play an increasingly central role in decision-making.
At Delta Capita, we are committed to supporting our clients through this complex and evolving landscape. By helping companies improve their ESG data aggregation and validation processes, we enable them to build stronger, more resilient businesses that are better positioned for the future.
Delta Capita is hosting an exclusive industry breakfast forum for ESG professionals to engage in a detailed discussion on this important topic. For further information, register your interest here: https://www.deltacapita.com/events/the-esg-data-dilemma
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