Streamlining ESG Data Collection: Why Spreadsheets Fail Audit Assurance

Many firms start their ESG reporting process by using spreadsheets. The first spreadsheet deals with electricity consumption, another with fuel use. Workforce-related information is managed by HR, supplier-related information by Procurement, and information related to waste/water use by operations. Finally, at the time of report preparation, someone compiles all the documents into one.

At first, this seems manageable. But as ESG requirements become more detailed and assurance expectations increase, spreadsheets start creating challenges rather than solving them. The issue is not that, spreadsheets are ineffective tools. The problem is that modern ESG reporting has become far more complex than what disconnected, manual processes can comfortably handle.

ESG Reporting Has Changed

A few years ago, ESG disclosures were relatively straightforward. Many organisations reported a limited set of sustainability metrics and broad commitments. Today, expectations are very different.

Corporate frameworks like BRSR in India, CSRD in Europe, and others mandate that the corporate reporting should include comprehensive and evidence-based details. Today, the companies have to use data from different functional areas such as finance, logistics, operations, procurement, human resource management, facilities, and even their suppliers.

The volume of information has increased significantly. More importantly, the data is constantly changing. A spreadsheet may work when a company tracks a handful of metrics. But once multiple teams start updating files across departments, problems begin to appear. Formulas get overwritten. Duplicate versions circulate through email. Old figures are copied into new reporting periods. Different teams work from different files. Often, these issues remain unnoticed until an audit begins.

The Traceability Challenge

One of the biggest expectations in ESG assurance is traceability. Auditors no longer focus only on final numbers. They want to understand how those numbers were produced.

If a company reports carbon emissions, auditors may ask where the underlying data came from, who approved it, how calculations were performed, and whether the methodology was applied consistently. This is where spreadsheets struggle. When data passes through multiple files, and several people make manual edits, it becomes difficult to track changes. Teams may know the final number, but proving how that number was generated becomes much harder. Without a clear audit trail, confidence in the data starts to weaken.

Small Errors Become Bigger Problems

Most ESG reporting mistakes are not caused by negligence. They happen because manual processes depend on coordination across many departments. Finance may use one reporting format while operations use another. Supplier information may arrive late. Data may be collected at different times or in different units. As reporting deadlines approach, teams rush to consolidate everything.

Under pressure, errors become more likely. Industry reports continue to highlight data quality and audit readiness as major ESG challenges. This becomes even more difficult when organizations report Scope 3 emissions and supply chain metrics, where information comes from multiple external partners rather than internal systems.

Why Spreadsheets Stop Scaling

Organisations often fail to realise how quickly their ESG reporting increases. What begins as monitoring several environmental KPIs evolves into reporting on emissions, water use, waste, workplace diversity, safety, suppliers, governance, and climate risks.

What started as a small reporting exercise can quickly turn into hundreds of data points that require regular updates. A spreadsheet process that works for twenty metrics becomes increasingly difficult to manage when that number reaches several hundred. The challenge is not only the workload. It is confidence in the information itself. Leadership teams need to trust the data they are using to make decisions. That becomes harder when reporting relies heavily on manual consolidation.

The Move Toward Centralized ESG Data Systems

Many companies are now approaching ESG reporting differently. Instead of treating it as a sustainability reporting exercise, they are treating it as a data management challenge.

The emphasis is moving towards centralized systems where information is transmitted directly from the source to reporting systems. Energy usage can be traced to utility systems. Purchase information can be traced back to supplier information. Logistics systems can deliver information about transportation.

Reducing manual data movement creates several benefits. It improves consistency, strengthens audit trails, and reduces the risk of reporting errors. Most importantly, it allows teams to spend less time collecting information and more time analysing it.

The Indian Context

For Indian companies, the challenge is becoming more significant as BRSR disclosures and assurance expectations continue to evolve. Many organisations still collect ESG data through emails, spreadsheets, and manual follow-ups across departments. While this approach may have worked in the early stages, it becomes increasingly difficult as disclosure requirements become more detailed and auditable. The challenge is rarely a lack of effort. Most sustainability, compliance, and reporting teams are already working hard to gather information from multiple departments. The real issue is that the reporting process itself was never designed to handle this level of complexity.

What Actually Helps

The organisations managing ESG reporting effectively are not always the ones with the largest sustainability teams. Often, they are the ones that invested early in creating structured and repeatable processes. This includes standardising data formats, assigning clear ownership, connecting systems where possible, and reducing manual transfers between teams. Even relatively small improvements in workflow design can improve reporting quality and reduce audit risks. The goal is not simply collecting more data. It is creating confidence in the data being reported.

The Bottom Line

Spreadsheets have played an important role in helping companies begin their ESG reporting journey. But as reporting requirements become more demanding, they are increasingly showing their limitations.Today, ESG reporting is no longer just about gathering numbers. It is about creating reliable, traceable, and auditable information that stakeholders can trust.

Companies that build stronger data foundations now will find audits easier, reporting more accurate, and decision-making more effective. In the coming years, trust in ESG data may become just as important as the sustainability performance being reported.