Digitalization and ESG reporting: benefits and challenges of a new era

Digitalization is quickly transforming the sustainability reporting landscape. According to a recent Nasdaq report, 86% of businesses utilizing ESG software have improved data quality, while 78% have noted an enhanced ability to track progress toward sustainability targets. These tools streamline data collection and validation and enable organizations to comply with international reporting frameworks such as the GRI Standards, the ISSB Standards, and the EU’s Corporate Sustainability Reporting Directive (CSRD).?

This process is supported by technologies like artificial intelligence (AI) and blockchain. AI automates validation and analyzes datasets to forecast ESG outcomes. According to the Nasdaq research, 60% of ESG professionals using software have reported time savings of over 25%. Blockchain ensures tamper-proof, traceable information, addressing issues such as greenwashing and biased reporting. It strengthens trust through verifiable compliance and progress, helping organizations demonstrate authentic ESG strategies.?

?These benefits, however, require thoughtful consideration to maximize their potential while addressing any challenges.?

For example, cloud computing offers a greener alternative to traditional data storage by centralizing resources and optimizing supply chains, even as data centers' energy demands grow with the rise of generative AI. According to the new GRI paper The Impact of Digitalization, these advancements contribute to a more sustainable future by reducing overall environmental footprints.?

Financially, software solutions like ESG platforms bring long-term gains in efficiency, accuracy, and sustainability. As highlighted in Isometrix’s The ROI of ESG Software, these tools streamline reporting processes, enabling companies to better manage compliance and demonstrate their commitment to ESG principles. Although initial investments, training, and integration require planning, the return on investment often outweighs the costs, particularly when paired with support as provided by the LST Program, designed to assist organizations in navigating these transitions effectively.

The GRI Licensing Software & Tools (LST) Program enables the integration of digital technologies into ESG reporting by ensuring that tools adhere to the GRI Standards. With a network of over 100 licensed partners, the program provides a structured framework for selecting reliable tools, helping organizations avoid pitfalls like greenwashing and misreporting. This support is valuable for overcoming financial, operational and ethical challenges while maximizing the benefits of digital tools through trusted, scalable solutions that meet evolving ESG demands.?

As part of its efforts to advance these goals, the program recently hosted the GRI ASEAN Reporter’s Webinar, The Tech-driven Future of Sustainability Reporting: Insights and Innovations. Experts from GRI, sustainability professionals, and AI & blockchain specialists emphasized the critical role of digital tools in advancing sustainability practices across Southeast Asia, focusing on how AI and blockchain are enabling cross-sector collaboration and fostering effective data governance, and highlighting the need to ensure accountability.?

The digital revolution is reshaping ESG reporting, empowering organizations to overcome challenges and create meaningful change. With GRI-verified software, businesses can lead with transparency, inspire trust, and drive lasting sustainability.?

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