Do More With Sustainability Data
MIT Sloan Management Review ·
Maria Bloom/Ikon Images
Many large companies have invested significant amounts of time and capital into sustainability reporting. In 2022, the European Union’s ambitious sustainability reporting framework, the Corporate Sustainability Reporting Directive, was projected to generate approximately €1.7 billion (about $1.8 billion) in one-off costs and €1.9 billion in recurring costs. Even in less regulated markets like the U.S., sustainability is treated as a long-term competitive imperative by many businesses. Globally, nearly half (48%) of companies are using double materiality assessments — that is, evaluating how efforts affect both company financial performance and society at large — to determine which sustainability topics are most significant from both a financial and stakeholder perspective. This represents a significant paradigm shift from the historically narrower focus on financial materiality observed as recently as five years ago.
Yet despite significant investments in sustainability reporting and oversight , much of the work remains a backward-looking, box-checking exercise, with an overemphasis on fulfilling regulatory requirements.
This is a missed opportunity. Compliance-driven sustainability investments in data collection systems and reporting can be transformed into something smarter and strategically valuable. Reporting may have been the driver for sustainability data investments, but it should not be the destination.
Companies like Schneider Electric and European fashion retailer Zalando can serve as models. They illustrate how broad sustainability goals can be translated into measurable, outcome-driven practices that matter on the ground, such as redesigning workflows, linking financial and nonfinancial KPIs, and stewarding data across silos. Drawing from such examples and our conversations with companies doing this work, we’ve developed five principles to help businesses treat sustainability as a cross-functional data initiative rather than just a compliance duty.
Five principles can help organizations, regardless of industry or maturity, move from framing their sustainability efforts as a simple reporting obligation to a call for integrated execution across departments. These principles offer both an on-ramp for companies that are starting at zero and a transformation road map for those further along.
Producing a comprehensive sustainability report can be a massive undertaking. Under the original reporting requirements, companies faced up to 82 disclosure requirements and more than 1,100 data points. They spanned environmental topics (such as climate change, pollution, and biodiversity), as well as social, governance, and business conduct issues (such as workforce well-being, supply chain labor conditions, and anti-corruption measures).
The problem is that many organizations respond by treating all sustainability topics as equally important. The 2025 annual reporting season of Euro Stoxx 200 companies shows that they are often using a list of material topics that is too inclusive, so they end up reporting myriad sustainability metrics. Companies often inflate their topic lists in an effort to mitigate risk, making the reporting footprint large and complex. More importantly, the process becomes disconnected from driving business value.
The way forward is to reclaim double materiality as what it was meant to be: a strategic prioritization tool. Rather than attempting to report on everything, organizations need to identify the few sustainability topics that genuinely affect both enterprise value and stakeholder impact. That requires that they make bold exclusions upfront. Even the European Sustainability Reporting Standards emphasize that a materiality assessment “ requires the exercise of judgment by the company, which needs to define itself what is material/relevant to its activities and throughout the value chain.” The result should be that reported data is strategically relevant and useful for external decision makers, illustrating how a company gains and maintains competitive advantage based on nonfinancial KPIs. The materiality assessment provides the filter: Companies still meet mandatory disclosure requirements while narrowing their reporting to information assessed as material. Applying a strategic mindset instead of a compliance mindset also reduces the number of metrics that end up in annual reports.
Leading companies are demonstrating what this looks like in practice. Schneider Electric narrowed its sustainability priorities to six core materiality topics aligned with its corporate purpose. It tracks progress through specific KPIs, such as “CO 2 emissions saved and avoided for clients,” and it candidly reports underperformance when necessary, noting, for instance, that only 21% of its strategic suppliers conformed to its Decent Work requirements in 2023, with that number rising to 63% in 2024. Novo Nordisk cut 30% of its initially listed material topics after internal alignment, resulting in sharper strategy execution and clearer stakeholder focus. Anchoring sustainability reporting in the company’s core health mission, such as preventing chronic diseases like diabetes and obesity, guided Novo Nordisk to translate material topics into concrete KPIs, such as patients reached and reduced incidence of illness, rather than diffused health metrics.
When companies cut to the material core, the result is fewer but higher-quality sustainability focus areas. These are more easily aligned with strategy and connected to meaningful data that can actually steer corporate performance.
In most organizations, sustainability data is collected primarily for reporting purposes, with sustainability teams investing significant effort in producing polished reports for external stakeholders. Data often ends up being too aggregated to be useful, disconnected from day-to-day decision-making, and rarely shared or reused across the enterprise. Operational managers, the very people who could turn sustainability ambitions into measurable progress, are left without actionable insight. They don’t rely on the report findings to guide internal decisions.
To reverse this pattern, companies must flip the starting point. Instead of beginning with what must be disclosed, they should begin with the decisions that shape sustainability outcomes, such as reducing energy consumption, selecting circular suppliers, redesigning products, and decarbonizing logistics.
Several organizations illustrate this shift. Vaude, a German textile company, integrates circularity into product development: A scorecard helps product designers and sustainability teams assess how close an item is to recyclability and reuse. Designers can evaluate recyclability early in the product development process to ensure that sustainability and innovation advance together; the data informs both product iteration and external communication. Similarly, a global sportswear manufacturer we worked with through our research consortium developed a dedicated “product data for sustainability” solution that embeds product-level sustainability metrics directly into design, sourcing, and portfolio management decisions, such as selecting lower-impact materials and choosing more sustainable suppliers.
Answering the job-to-be-done question shifts the sustainability journey into one designed with a product mindset around clear internal users and the concrete decisions they need to make.
Many sustainability reporting processes still rely on disconnected, ad hoc data requests that are often managed through spreadsheets with inconsistent definitions and rough estimations. This fragmented approach undermines trust in the data and limits its reuse for decision-making or advanced analytics. When sustainability information is assembled through patchwork efforts, it becomes difficult to rely on, difficult to scale, and difficult to integrate into core business processes.
To move beyond guesswork and faulty data, companies must create a trusted sustainability data foundation built on golden records , which are integrated and consistent data sets that provide a single, verified source of truth for sustainability data. Building this kind of data foundation requires the involvement of sustainability experts, business leaders, and data professionals from the outset.
Leading companies establish joint teams between their sustainability and data experts to translate material topics into concrete data requirements and bridge functional silos. They codesign what should be measured and how it should be structured.
This foundation requires that data be treated as a strategic representation of what matters most. Key data sets, such as product master data, supplier data, and emissions data, must be systematically collected, validated, and stored, and continuously updated. Instead of maintaining scattered repositories, companies develop enterprisewide platforms that serve as a single, verified source of truth.
Zalando designed a sustainability data platform to move beyond spreadsheets and toward this kind of trusted, accessible golden record database. Building on its experience with complex carbon emissions calculations, the company created a comprehensive database that consolidates and streamlines sustainability data from diverse internal and external sources. To manage heterogeneous formats and inputs, the platform incorporates robust verification and validation methods at both the technical and business levels — including automated quality gates and manual plausibility reviews — to ensure accuracy and auditability. The result was more consistent, auditable, and business-relevant sustainability reporting.
Financial reporting and performance measurement systems have historically been built around the clear logic of relative secrecy: Companies disclose material financial data within the subsidiaries and operations they control. Sustainability data, however, does not fit neatly within those boundaries. For emissions management, circularity, biodiversity, human rights, and many other sustainability topics, strategically meaningful data extends across the entire value chain and beyond any one company’s walls.
Companies are increasingly dependent on suppliers, logistics partners, customers, and other external stakeholders for sustainability data: Over 50% of the data points required for monitoring and reporting a company’s comprehensive sustainability performance and impacts stem from external sources. Yet collecting this information is often difficult — and sometimes nearly impossible. There is significant effort required, much of the data is not in standardized form, and businesses’ data-sharing practices are inconsistent. Suppliers may resist providing information unless it’s mandated, and partners may hesitate to share sensitive metrics.
To access and make use of external data, companies often need to work actively across organizational boundaries, building partnerships and participating in broader ecosystems. Take the example of EDP, a Portuguese company that was recognized as the world’s most sustainable electric utility in 2023 in the Dow Jones Sustainability Indices World. EDP worked closely with academia to back up its sustainability promise before investing in and defining its strategy for addressing energy poverty — a scenario in which households’ energy bills represent a high percentage of their incomes. The company worked with academics to understand how governments, nonprofits, and businesses could work together to reduce the number of households suffering from this problem.
Companies don’t need the scale or resources of EDP to work effectively across organizational boundaries. Ragn-Sells, a midsize, family-owned Swedish company with far fewer resources to create or influence ecosystems compared with big, listed firms, offers one example. It built its transition from a waste management company to a circular economy role model through collaborations with many external businesses and stakeholders. The company’s annual sustainability report stresses the importance of partnerships for creating the foundations for systemic change across value chains. Ragn-Sells has won numerous awards for its innovations in partnership with other companies and has been recognized by the United Nations and other international organizations.
By taking an ecosystem approach and collaborating with actors outside of their own organizations, companies can improve access to relevant data, strengthen the credibility of their sustainability efforts, and support more coordinated action across the value chain.
Instead of starting the process of compiling contextual data on their own from scratch, companies should look externally to see what has already been collected and compiled . Companies can first check to see what data, benchmarks, standards, and platforms already exist and can be used to complement or enrich their internal data. Publicly available “ground truth” data sets — ranging from satellite-based land-use indicators to industry benchmarks — can provide a company with a credible foundation for setting its own goals. For deforestation initiatives, for example, regional satellite data and public databases, rather than bespoke mitigation measures, can serve as a starting point.
In many industries, existing data-sharing platforms can also provide ready-made infrastructure for accessing and exchanging sustainability data. In automotive, for instance, initiatives such as Catena-X facilitate the sharing of data by suppliers in structured and interoperable ways. In biodiversity and deforestation contexts, companies can draw on satellite monitoring systems. And standards such as GS1 product-level identification offer practical building blocks for coordinating sustainability data across industries.
Drawing on existing external sources can reduce duplication, strengthen internal data sets, and provide useful context for setting targets and interpreting performance. The goal is not to replace company-specific data but to avoid rebuilding data, standards, or infrastructure that already exist.
The goal of collecting sustainability data isn’t to have perfect sustainability reporting but to build better strategic steering. Achieving sustainability data maturity requires a mindset shift. By applying the five principles we’ve outlined, companies can move beyond compliance toward better decision-making.
The process is dynamic. Lessons learned will gradually improve systems and data quality, and unexpected shifts may occur too; a new focus on mental health KPIs, for instance, might take precedence over other business metrics. The key is to remain adaptive, using the process and the data to refine both what you measure and how you act on it.