The gap between gathering ESG data and actually influencing executive strategy remains wide at most organisations. A handful of sustainability teams have cracked the code. Here is their approach.
Key Takeaways
Companies now produce more ESG data than at any point in history. The Global Reporting Initiative counts more than 10,000 organisations using its standards. CDP received responses from over 24,000 companies in 2025. The number of sustainability data points the average S&P 500 company tracks has grown by an estimated 340% since 2018, according to analysis by consulting firm Verdantix. And yet, by the most important measure, the rate at which sustainability data actually changes executive decisions, almost none of it is working.
A striking finding from a 2025 Harvard Business Review study surveyed 450 senior executives across 14 industries: just 8% described their company's ESG reporting as having "directly influenced" a capital allocation or major strategic decision in the previous 12 months. The remaining 92% categorised their sustainability reports as compliance documents, communications tools, or stakeholder engagement artefacts. The implications are severe. An enormous industry of data collection, verification, and reporting is consuming significant organisational resources while producing outputs that executives largely set aside when the important decisions are being made.
The root of the issue is linguistic, not technical. Sustainability teams have become skilled at producing data in the language of ESG frameworks: greenhouse gas emissions in tonnes of CO2-equivalent, water withdrawal in megalitres, diversity ratios as percentages of headcount. Executives make decisions in a different language: earnings before interest and taxes, return on invested capital, free cash flow, earnings per share. The two vocabularies are not inherently incompatible, but they require translation, and most sustainability functions have not invested in building that translation capacity.
"We spent years producing beautifully designed sustainability reports that our CFO never opened," said Marcus Chen, Vice President of Sustainability at a Fortune 200 industrial company. "The moment things changed was when we hired an analyst who came from FP&A and could express our climate transition risk as a range of earnings impacts under different carbon price scenarios. Suddenly the CFO was calling us, not the other way around."
"ESG data does not change decisions until it appears inside the models executives already use. The sustainability team's job is not to produce a separate report. It is to change what goes into the financial model, the capital allocation template, and the M&A screening criteria."
Dr. Sakis Kotsantonis, Co-Founder, KKS Advisors and Harvard Business School Research Partner
Across the sustainability teams that executives describe as genuinely influential, a set of consistent practices emerges. These are not primarily technology solutions, though better data infrastructure matters at the margin. They are fundamentally about how sustainability professionals choose to frame, position, and deliver information to decision-makers. The most important practices are:
The technology dimension is secondary but not irrelevant. Companies where ESG data flows automatically into enterprise resource planning systems and financial planning tools, rather than being maintained in separate sustainability platforms that require manual export, consistently report higher rates of executive engagement with sustainability metrics. SAP and Microsoft have both significantly expanded ESG data integration capabilities in their enterprise platforms since 2023, and a growing number of companies are now pulling emissions, water, and supply chain sustainability data into the same dashboards used by operational and financial leadership teams. When a business unit president sees their division's Scope 1 emissions alongside their revenue and margin numbers every Monday morning, sustainability stops being an annual reporting exercise and becomes a weekly operational reality.
The talent implications are significant and still underappreciated. Building the translation capacity that high-impact sustainability teams describe requires professionals with genuinely hybrid skills: deep familiarity with ESG frameworks and materiality assessment, combined with fluency in financial modelling, scenario analysis, and the decision-making heuristics that CFOs and board members actually use. This profile is rare and expensive. Companies that are serious about making ESG data influence boardroom decisions will need to invest in developing it through intentional hiring, cross-functional rotations, and targeted training programmes. The alternative, continuing to produce compliance-grade sustainability reports that 92% of executives find strategically irrelevant, is an increasingly costly form of self-deception for organisations that have staked genuine reputational and financial capital on their ESG commitments.
