Is Your ESG Data Ready for Scrutiny? Building Confidence in What Your Business Reports

Brought to you by Emergent Africa

A board member asks how the company calculated its reported reduction in emissions. A customer requests evidence supporting a responsible sourcing claim. A prospective investor wants to understand whether improved safety performance reflects better operations or a change in reporting boundaries.

The questions sound straightforward. Answering them can expose weaknesses that remain invisible in a polished sustainability report.

The supporting information may sit across spreadsheets, operational systems, supplier submissions and individual inboxes. Different business units may interpret the same indicator differently. Estimates may be combined with measured information without clear explanation. Adjustments may be correct but poorly documented.

The organisation can produce a number. Demonstrating why that number deserves confidence is a different challenge.

For executive teams, this is the central issue in environmental, social and governance reporting: can the business explain, substantiate and reproduce what it reports?

This paper draws on research and perspectives from five leading global consulting firms: McKinsey & Company, Boston Consulting Group, Bain & Company, Deloitte and PwC. Their work approaches sustainability reporting from different directions, including investor expectations, technology readiness, financial control and strategic value. Together, it provides a strong basis for examining how organisations can build greater confidence in their ESG information.

The practical framework that follows is Emergent Africa’s synthesis of those findings, applied to the needs of South African businesses.

The gap between reporting confidence and reporting readiness

Publishing a sustainability report is an achievement. It does not, by itself, demonstrate that the underlying information is sufficiently controlled.

Bain’s May 2024 research, which surveyed more than 300 executives, found that only 24% of companies said they were ready for upcoming sustainability reporting requirements. Nearly 90% agreed that improvements in digital technology were critical to advancing their sustainability goals. These are historical findings, rather than a measure of readiness today, but they illustrate the gap between recognising the need and building the capability.

As Bain partner Adam Cox put it:

“Technology will be essential for companies to meet their sustainability commitments and ensure compliance as regulations evolve.” Bain & Company

The executive implication is that reporting capability requires investment before the reporting deadline arrives.

An organisation may have experienced sustainability professionals and still depend on processes that are difficult to repeat, review or scale. It may meet its publication timetable through exceptional individual effort while carrying unresolved weaknesses into the next reporting cycle.

That distinction matters. A reliable process should survive staff changes, acquisitions, new indicators and more demanding questions. It should not depend on one person remembering why a figure was adjusted six months earlier.

A useful test is to select a handful of material disclosures and ask someone outside the preparation team to reconstruct them. If the exercise requires a series of explanations that were never documented, the organisation has identified a control gap.

Scrutiny extends beyond regulatory compliance

Reporting obligations matter, but they are only one reason to strengthen ESG information.

PwC’s 2025 Global Sustainability Reporting Survey covered 496 companies that had reported, or planned to report, under the Corporate Sustainability Reporting Directive or International Sustainability Standards Board frameworks. More than half said internal and external pressure to provide sustainability data and insights had increased over the preceding year. The report also found that more than two-thirds of companies that had already reported gained significant or moderate value beyond compliance from the information collected.

PwC expresses the opportunity clearly:

“value is created when sustainability data and insights are used to inform business decisions widely across the enterprise.” pwc.com

For South African leadership teams, the practical question is therefore broader than which reporting requirements apply.

Consider the information needed to evaluate an energy investment, assess water exposure at a production facility, compare workforce outcomes across subsidiaries or respond to a major customer’s procurement questionnaire.

These decisions require information that is consistent enough to compare and sufficiently reliable to act on.

An inaccurate baseline can distort an investment case. Incomplete supplier information can conceal exposure. A group average can hide a serious problem at a particular operation.

Better reporting foundations can improve the decisions made long before the annual report is published.

Investors need information they can trust and compare

The concern about reporting quality predates the current wave of sustainability disclosure requirements.

McKinsey’s 2019 research highlighted investor frustration with inconsistent, difficult-to-compare and insufficiently reliable sustainability information. In its sample of 57 investors, 97% believed sustainability disclosures should undergo some form of audit. The sample was small and the research is historical, but it provides a useful early indication of the demand for stronger verification.

An investment leader interviewed for the research observed:

“Many companies do not have the systems in place to collect quality data for [sustainability] reporting.” mckinsey.com

The underlying issue remains useful for executives to consider: stakeholders need more than a favourable narrative. They need to understand what the numbers represent.

A reported improvement may reflect genuine operational progress. It may also reflect the disposal of a business, a revised calculation method, a different denominator or a narrower reporting boundary.

For example, lower total water consumption could result from improved efficiency or reduced production. Both may produce the same headline direction, but they carry different implications for performance.

Confidence grows when the report explains those distinctions.

What scrutiny actually tests

Scrutiny follows the path from a published claim back to the activity that produced it.

Suppose a manufacturing group reports a reduction in emissions intensity. A credible explanation should establish which operations were included, what activity data was used, which calculation factors applied, how production was measured and whether the prior-year comparison used a consistent basis.

It should also show who reviewed the result and what happened when inconsistencies were identified.

The same discipline applies beyond environmental indicators.

A workforce metric needs a clear definition of the employee population. A training metric needs a consistent treatment of attendance and completion. A responsible sourcing claim needs evidence that matches its stated scope. An ethics disclosure needs clarity about the difference between allegations received, investigations completed and cases substantiated.

Six characteristics provide a useful practical test:

These characteristics make it easier to distinguish a robust disclosure from a plausible number.

Treat ESG reporting as a business process

ESG reporting often draws on information owned by several functions. Operations may hold energy and water records. Human resources maintains workforce information. Procurement manages supplier data. Finance controls expenditure and consolidation structures. Legal and compliance teams hold records relevant to governance disclosures.

The sustainability team may coordinate the report without controlling all the processes that generate its content.

Deloitte’s perspective on ESG controllership stresses the need for:

“processes and internal controls that are thoughtfully developed, repeatable, and sustainable.”

It identifies reporting requirements, technical accounting, data collection and business insights as interconnected areas requiring attention. Deloitte US

Emergent Africa’s recommendation is to establish explicit responsibilities across the reporting process.

Each material indicator should have an accountable business owner. Preparation and review responsibilities should be clear. Methodological changes should require approval. Unresolved issues should have an escalation route.

Finance can contribute consolidation and control expertise. Sustainability specialists can guide interpretation and relevance. Technology and data teams can support integration and access. Operational leaders remain responsible for the activities and records within their control.

Internal audit can provide an independent assessment of whether the agreed processes operate as intended.

The value comes from connecting these roles into a repeatable process with a clear timetable and evidence of completion.

Start with the information that matters

Improving ESG data does not mean collecting every available indicator.

An organisation can spend heavily on reporting while remaining unclear about which information is most relevant to its business and stakeholders.

BCG’s July 2026 perspective on sustainability reporting argues for a stronger connection between disclosure and strategy. It describes how broad reporting exercises can create lengthy disclosures and substantial operational effort while delivering limited decision value.

Its proposed approach prioritises:

“material, decision-useful disclosures while minimizing unnecessary complexity and effort.” BCG

For management, the starting point should be a clear understanding of material issues and applicable reporting requirements.

A water-intensive manufacturer, a financial services business and a logistics group will have different priorities. Their data improvement programmes should reflect those differences.

This does not justify omitting inconvenient information. It requires a documented basis for determining what matters, what must be reported and where stronger evidence is most urgently needed.

A practical prioritisation exercise should consider the significance of the issue, the consequences of inaccurate reporting, stakeholder interest and the weakness of existing controls.

The highest-risk disclosures deserve early attention.

Build a defensible path from source to report

A reliable reporting process preserves the connection between the source record, the calculation and the published result.

For a material indicator, the organisation should be able to assemble an evidence pack containing:

• The indicator definition, reporting boundary and period.

• Source records and responsible contributors.

• Calculation methods, assumptions and relevant factors.

• Estimates, exclusions and known limitations.

• Review comments, corrections and approvals.

• The final value used in the report.

This is more useful than an archive containing hundreds of documents with no clear relationship to the disclosed number.

Consider purchased electricity. An invoice can support a consumption figure, but the reporting process must also establish whether all relevant premises are covered, whether billing periods align with the reporting period and whether estimated readings require adjustment.

Similarly, supplier expenditure may be available from a finance system while supplier classifications are maintained elsewhere. Unless those records are reconciled, a group procurement disclosure may appear precise without being consistently classified.

Evidence should be captured while the work is performed. Reconstructing it after publication increases effort and introduces avoidable uncertainty.

Make estimates visible and manageable

Some ESG information will involve estimation. The management objective should be to understand and control that uncertainty.

An estimate becomes more defensible when its basis is explicit, its assumptions are appropriate and its limitations are understood.

Problems arise when estimates are presented as measured facts, when methods change without explanation or when contributors apply different assumptions to comparable activities.

An internal distinction between measured, calculated and estimated information can help management assess confidence. This is a practical management classification, rather than a substitute for the terminology required by an applicable reporting framework.

For material estimates, the organisation should record why estimation was necessary, what information was available, which assumptions were used and who approved the method.

It should also decide whether better source information would materially improve the result.

The priority is not to eliminate every estimate. It is to focus improvement effort where uncertainty could change a stakeholder’s interpretation or a management decision.

Explain performance movements before celebrating them

Reported progress deserves investigation as well as recognition.

A reduction in emissions, injuries or waste may indicate successful intervention. It can also reflect changes in activity, business boundaries, reporting coverage or methodology.

Management should ask whether a favourable movement remains favourable after those effects are understood.

An illustrative example is a group reporting lower energy consumption following the disposal of an energy-intensive operation. The reduction is real at group level, but it does not necessarily demonstrate improved efficiency in the remaining business.

The report becomes more informative when it distinguishes the effect of the disposal from operational improvement.

A useful management review separates movements caused by:

• Changes in operational performance.

• Changes in production or business activity.

• Acquisitions, disposals and other boundary changes.

• Revised methods, factors or classifications.

• Corrections to previously reported information.

This strengthens both external explanation and internal accountability.

Apply the same discipline to narrative claims

Numbers are only part of the credibility challenge.

Statements about responsible sourcing, employee wellbeing, community impact or environmental leadership also require support.

A policy establishes an intention. Training records demonstrate participation. An outcome claim requires evidence of what changed.

For example, expenditure on an employee wellbeing programme does not by itself establish improved wellbeing. Participation in a supplier assessment programme does not automatically establish responsible practice across the entire supply base.

Before approving a material narrative statement, management should identify the evidence supporting it and test whether the wording extends beyond that evidence.

Words such as “all”, “fully” and “eliminated” deserve particular attention because they imply comprehensive coverage or certainty.

Precise language can make a report more credible. It allows the organisation to describe genuine progress while being clear about remaining work.

Use technology to reinforce sound reporting practices

Technology can reduce manual effort, improve consistency and make evidence easier to retrieve. Its value depends on the quality of the process it supports.

Automating an unclear definition spreads inconsistency faster. Consolidating incomplete submissions produces a more accessible incomplete total. A dashboard can display a result without resolving whether it is reliable.

Before selecting or extending reporting technology, management should establish the operating requirements.

These should include the indicators to be managed, contributors and reviewers, evidence requirements, calculation responsibilities, access controls and treatment of changes.

A practical technology assessment should test a real disclosure through the full process.

Can a contributor submit information with supporting evidence? Can a reviewer return a query? Can an approved adjustment be traced? Can management understand how the final figure was assembled?

These questions reveal more than a demonstration of visual reporting alone.

Artificial intelligence may assist with extraction, anomaly identification or drafting. Any use should preserve access to the source evidence and clear human responsibility for material judgements and published claims.

A practical 90-day starting point

The following programme is an Emergent Africa recommendation for establishing priorities and testing an improved process. It is not a promise of complete reporting readiness within three months.

Days 1–30: Identify exposure

Select a manageable set of material disclosures. Map their sources, owners, methods and evidence. Test whether someone independent of preparation can reproduce the reported results.

The output should be a prioritised gap register with accountable owners.

Days 31–60: Strengthen the process

Agree definitions, clarify boundaries, document methods and establish review requirements. Address the most significant missing evidence and inconsistent practices.

The output should be a reporting protocol that contributors can use in their normal work.

Days 61–90: Run a controlled reporting cycle

Apply the protocol to a selected business unit or group of indicators. Record queries, corrections, delays and unresolved issues. Test the retrieval of evidence and the reproducibility of results.

The output should be a tested process and a realistic improvement roadmap.

Success should be measured through practical changes: fewer unexplained adjustments, clearer ownership, more complete evidence and less dependence on manual reconstruction.

The questions leadership should ask

Boards and executive teams do not need to inspect every source record. They do need an informed view of the reporting process and its weaknesses.

Eight questions can support that oversight:

1. Which material disclosures carry the greatest risk of error or misinterpretation?

2. Can we reproduce those figures from retained evidence?

3. Who owns each indicator and approves methodological changes?

4. Where do we rely on estimates, and how significant is the uncertainty?

5. Can we distinguish operational progress from changes in boundaries or methods?

6. What reporting weaknesses remain unresolved?

7. Which published claims have been tested against their supporting evidence?

8. How is this information influencing business decisions?

The answers should become more precise over time. Repeated dependence on informal reassurance is itself a signal that the process needs attention.

Building confidence into the way the business works

Credible ESG reporting emerges from consistent daily practices: clear definitions, accountable contributors, accessible evidence and disciplined review.

This is the context in which Emergent Africa’s ESG reporting platform, CatalytiX, can play a supporting role. Its published capabilities include data collection, validation and consolidation, supporting document uploads, historical data logs, user and approver arrangements, and tracking against ESG indicators and targets. Catalytix

The platform sits within Emergent Africa’s integrated sustainability and data management approach. Its relevance is in helping organisations establish a more structured foundation for reporting and decision-making. Catalytix

Technology supports that foundation; management establishes the accountability and discipline that make it dependable.

Ultimately, confidence should rest on the organisation’s ability to show how a disclosure was produced, explain its limitations and demonstrate that it has been reviewed.

When scrutiny arrives, the strongest response is a clear path from the published claim to the underlying evidence.

References

1. McKinsey & Company (2019). More than values: The value-based sustainability reporting that investors want. Historical investor and executive research on comparability, reliability and verification. Read the paper.

2. Boston Consulting Group (6 July 2026). Sustainability Reporting in Europe: From Compliance to Strategy. Perspective on materiality, reporting processes and strategic usefulness. Read the article.

3. Bain & Company (1 May 2024). Just 24% of companies say they are prepared to meet impending sustainability requirements, Bain & Company survey finds. Research involving more than 300 executives. Read the findings.

4. Deloitte (undated). Controllership strategies for ESG reporting: Four potential key focus areas for ESG regulation preparation. Read the perspective.

5. PwC (25 September 2025). From insight to value: The sustainability reporting journey continues. Global Sustainability Reporting Survey, covering 496 companies. Read the survey.

6. Emergent Africa / CatalytiX. Platform capabilities and integrated sustainability approach. Explore CatalytiX and its background.