ESG Data: What It Is, Why It Matters & How to Leverage It

Tracking ESG data is now a standard part of how companies operate. Regulators expect it. Investors ask for it. Procurement and sustainability teams rely on it to assess supplier performance and manage risk. Nearly all large companies now disclose ESG metrics, with 98% of S&P 500 firms reporting ESG information in 2022, and virtually all institutional investors review ESG disclosures when planning investments​.

This surge in ESG transparency is driven by stakeholders – regulators, investors, customers, and business partners – who expect data-backed proof of sustainable and ethical practices. For compliance and sustainability professionals, the message is clear: effective management of ESG data is becoming mission-critical for both meeting obligations and gaining a competitive edge.

If you’re responsible for ESG, compliance, or supply chain management, then you’re already dealing with ESG data. The challenge is usually less about collecting ESG data but more about making it usable. You need consistent, comparable, and auditable information that’s easy to report on and easy to act on. This page explores what ESG data includes, how companies use it across compliance and operations, and where EcoVadis can help.

What is ESG Data?

ESG data refers to information related to a company’s environmental impact, social responsibility, and governance practices. In practical terms, it encompasses a wide range of metrics and disclosures that indicate how an organization manages issues like climate change, resource use, workforce welfare, community impact, ethics, and oversight. This data provides a fuller picture of corporate performance beyond financial results.

Examples of ESG data metrics include:

• Environmental data: Greenhouse gas emissions, energy consumption, water usage, waste and recycling rates, pollution incidents, and climate change impacts.
• Social data: Workforce health and safety statistics, employee diversity and inclusion metrics, labor practices (e.g., wages, working hours), community engagement, customer satisfaction, and human rights assessments, such as absence of child or forced labor in the supply chain.
• Governance data: Board composition (e.g., diversity, independence), executive compensation, anti-corruption policies, tax transparency, data privacy practices, and supply chain due diligence processes.

You’ll typically deal with two types of ESG data: quantitative metrics and qualitative disclosures.

• Quantitative metrics include things like kilowatt-hours of electricity used, tonnes of carbon dioxide emitted, or percentage of women in management roles.
• Qualitative disclosures cover policies, procedures, and actions – how you manage these topics, not just the outcomes.

Organizations collect ESG data from internal operations and external sources, including suppliers and third-party assessments. It can come from utility bills, HR systems, audits, supplier questionnaires, or ratings platforms.

Most organizations align ESG data collection with reporting frameworks like the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), or the Greenhouse Gas Protocol. These standards help you structure your data in a way that meets external expectations, especially for mandatory reports.

The goal is to have ESG data that is reliable, consistent, and usable. That means data you can report to regulators, share with stakeholders, or use internally to track performance and identify where to focus improvements.

ESG Performance in Practice

ESG data creates value when it’s used across compliance, procurement, reporting, and improvement. Organizations using EcoVadis aren’t just collecting information; they’re using it to improve performance, reduce risk, and strengthen supplier relationships.

Jakala is turning ESG compliance into a competitive advantage with the help of EcoVadis’ full suite of solutions. Their innovative, data-driven approach to sustainable procurement is driving supplier engagement at every level: reducing risk, enhancing transparency and accelerating impact across the supply chain.

This is just one example. Organizations across industries are using verified ESG data to make smarter decisions, track supplier performance, and prepare for growing disclosure obligations. When ESG performance is visible and comparable, it becomes easier to act on.

Why ESG Data Matters

ESG data supports your work on compliance, supplier oversight, investor reporting, and internal decision-making. You need it to meet legal obligations, manage supply chain risks, and answer to investors and customers who expect transparency. It also helps you track progress and spot where improvements are needed.

Regulatory Compliance and Disclosure

Governments are introducing ESG disclosure laws across major markets. To meet these requirements, you need accurate, structured data. That includes emissions figures, supply chain risks, and diversity metrics. Most rules don’t just ask for the data—they also expect you to follow recognized standards and, in many cases, have the data independently reviewed.

Collecting and maintaining this data protects your organization from fines, reputational issues, and legal exposure. It also makes it easier to meet new rules as they come in, without rebuilding your reporting process each time.

Supplier Performance and Responsible Sourcing

Most environmental and social risks sit in your supply chain. That’s where a large share of emissions, human rights issues, and compliance risks occur. ESG data helps you understand how suppliers are performing and where you need to act.

Collecting supplier data through assessments or ratings gives you visibility into practices like emissions reporting, working conditions, and due diligence. It helps you identify high-risk suppliers and follow up with clear improvement actions.

This makes ESG data useful for procurement, too. You can use it to include sustainability in supplier scorecards, track progress, and guide decisions. It also helps with reporting. Many supply chain regulations, like those focused on forced labor or conflict minerals, require you to show what action you have taken. Without data, it’s impossible.

Investor Expectations and Reputation

Most investors now look at ESG data when assessing performance and risk. They want to see metrics on emissions, governance, and social policies, ideally reported in a consistent and verifiable way. Without this data, your organization may be excluded from ESG-focused funds or seen as high risk.

Clear reporting builds trust. It shows you’re tracking material issues and making improvements where needed. That can support your position in ratings and benchmarks, and reduce pressure from investor questionnaires.

Strong ESG data also helps protect your organization’s reputation. Ratings and public disclosures are easy to compare. If your ESG reporting is weak or inconsistent, stakeholders may assume you’re not managing these issues. That can lead to negative attention, lost business, or lower investor confidence.

Risk Mitigation and Resilience

ESG issues carry direct operational and financial risks. Flooding, heatwaves, and resource shortages affect sites and suppliers. Labour disputes, safety incidents, or weak ethics controls create disruption, legal exposure, and reputational damage. ESG data helps you identify and manage these risks early.

For example, if injury rates are rising at a site, that’s a sign to intervene before someone gets seriously hurt. If you’re sourcing from a region under water stress, you may want to adjust your supply mix. Tracking indicators like audit results, compliance breaches, or whistleblower activity helps flag governance risks before they escalate.

Organizations with consistent ESG data tend to respond faster and recover quickly. Some research shows they also get better financing terms because investors and insurers often view strong ESG performance as a sign of lower risk. That can reduce your cost of capital or insurance premiums.

Benchmarking and Competitive Insight

ESG data also helps you compare performance. Internally, it shows how different sites, regions, or teams are tracking on emissions, safety, or diversity. That makes it easier to find what’s working and replicate it. It also shows where support or investment is needed.

Externally, ESG ratings and scorecards give you a reference point against industry peers. If your organization is scoring below average, that’s a clear signal. If you’re ahead, that’s something you can share with stakeholders.

Clients and investors compare this kind of data when making decisions. Some procurement teams set ESG thresholds for suppliers. Some investors only back organizations above a certain rating. Public benchmarks shape perception (and often business outcomes).

Practical Guidance for Collecting ESG Data

Collecting ESG data isn’t just about compiling numbers; it’s about getting consistent, structured information you can use across reporting, risk management, and performance tracking. The more reliable and comparable your data is, the easier it becomes to make decisions and respond to external expectations. Good collection practices also reduce the risk of gaps or inconsistencies when data is reviewed by third parties.

Environmental Data

Start with data you can measure directly, like energy use, water consumption, and emissions. Use metered or billing data where possible. For emissions, follow the Greenhouse Gas Protocol and separate scope 1, 2, and 3. Avoid relying on estimates unless you have a clear method behind them. Keep units consistent across locations.

Social Data

Social data often comes from HR systems, surveys, or assessments. When you use surveys, back them up with objective data, like turnover rates or injury reports. If collecting sensitive information (such as demographic data), make sure responses are anonymized and stored securely. Be clear about what’s optional.

Governance Data

Governance data should be tied to documented processes. Use signed policies, audit records, training logs, or board minutes as sources. Avoid basing your reporting only on policy intent or claims. Instead, focus on what’s been implemented and tracked. This makes it easier to stand behind your data if reviewed externally.

Making Your ESG Data Work for You

You can use ESG data to make better decisions, improve performance, and meet stakeholder expectations. Internally, it helps track emissions, resource use, and workforce data across sites or regions. When you monitor this consistently, it’s easier to flag issues early and fix them before they grow. You can also use it to assess progress against ESG targets, like reducing carbon intensity or increasing supplier compliance, and adjust plans based on actual results.

ESG data also feeds into broader business decisions. It gives your teams insight into where operations are inefficient or risky. You can use this to plan upgrades, shift resources, or improve processes. It makes your ESG goals more practical and measurable because they’re based on real numbers, not assumptions.

Externally, ESG data helps you meet legal requirements. Regulations now require more detailed, structured reporting. You can’t meet those rules without strong data. You also need it to answer investor questions, complete ratings assessments, and show progress in sustainability reports. Stakeholders want numbers, not statements.

Procurement teams can also use ESG data to evaluate suppliers. It helps you set expectations, follow up on risks, and show that due diligence is more than a policy. It also helps with customer trust. Being transparent about your ESG performance – good or bad – sends a clear signal that you’re paying attention and working on it. That builds credibility.

Verifying ESG Data Quality

If you’re using ESG data to report externally or make decisions internally, you need to know it’s accurate. Without verification, ESG metrics lose credibility. Investors, regulators, and business partners increasingly expect proof, not just numbers. Verifiable data gives you that credibility and helps protect against greenwashing claims or compliance failures.

Good ESG data management includes checks at every stage. Many organizations start with internal reviews: cross-checking inputs, auditing source data, and setting controls for how data is handled. This includes version control on documents, tracking who entered what, and comparing reported metrics against previous years or business benchmarks. Some organizations also run internal spot checks or use automated validation rules to flag outliers.

Third-party verification is becoming more common, especially for environmental and social data used in formal reporting. Independent assurance adds weight to your disclosures and can help meet regulatory or investor requirements. For example, climate disclosures mandated by various policies may require external assurance of emissions data. Even when it’s not legally required, the third-party review can help you avoid costly errors or gaps.

Turn ESG Data into Action with EcoVadis

EcoVadis helps you collect, assess, and act on ESG data across your organization and supply chain. If you’re trying to build a consistent, reliable view of sustainability performance, our tools can support that at scale.

• The EcoVadis Ratings platform gives you a structured, third-party view of ESG performance – either for your organization or your suppliers. Each scorecard breaks down performance across environmental, social, ethics, and governance themes, with supporting documents and improvement areas. Meet reporting requirements, run supplier assessments, and benchmark performance across regions.
• IQ Plus helps you screen and prioritize your supply base. It maps ESG risk across thousands of suppliers using predictive data, not just self-reporting. That means you can focus your attention where it’s needed most – on high-risk or low-performing suppliers – and avoid spending time where there’s low exposure.
• The Carbon Action Manager supports emissions tracking and supplier engagement on climate targets. You can use it to estimate emissions, collect scope 1, 2, and 3 data, and track supplier progress on decarbonization. The data feeds into dashboards you can use for internal reporting, regulatory disclosures, and supplier development.

EcoVadis solutions are designed to support action, not just reporting. You get clear data, practical improvement guidance, and dashboards to monitor progress over time. If you’re looking for ESG data you can use across procurement and compliance, we can help.

Ready to use your ESG data more effectively? Talk to us about how EcoVadis can support your program.