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ESG Reporting & Sustainable Corporate Governance

Global climate change is just one of many consequences of a changing world. Famine, marine pollution, child labor, and shortages of raw materials are also among the sad realities of our time. Only through joint efforts by governments, businesses, and society worldwide can these challenges be adequately addressed. The United Nations’ 17 Sustainable Development Goals (SDGs) and the specific targets of the Paris Climate Agreement to limit global warming play a central role in this regard.

With the EU member states’ flawed implementation of the CSRD and the publication of subsequent omnibus directives that limit the scope of sustainability reporting, the importance of sustainability reporting has been called into question. However, sustainable, responsible corporate behavior and business practices remain factors that reflect society’s expectations of companies and can determine their long-term success today and in the future. The key questions are: What impact do the company’s business activities have on the environment and society? How does sustainability influence the business model? What risks are associated with sustainability issues? What sustainable financing options are available?

Purely financial figures and hard facts are no longer sufficient to maintain stakeholder interest and trust. Transparent, non-financial reporting is necessary to demonstrate that companies are aware of the environmental and social impacts of their business activities and are taking responsibility. Even companies that are not required to issue a non-financial statement can derive strategic and economic benefits from a stronger focus on sustainability.

ESG as a strategic challenge

Sustainability has long been more than just a compliance issue—it is a strategic success factor. ESG affects the entire company and requires a coordinated interplay of strategy, processes, and culture. In this context, companies face three key challenges in particular:

COMPREHENSIVE INTEGRATION INTO THE CORPORATE STRATEGY

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ESG is a cross-cutting issue that affects all areas of business. Social, environmental, and economic factors must be thoroughly analyzed and integrated into a long-term, sustainable corporate strategy. At the same time, ESG risks must be systematically incorporated into existing risk management frameworks.

DATA MANAGEMENT AND REGULATORY REQUIREMENTS

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The expectations of investors, lenders, and regulators are constantly rising. At the same time, ESG data collection and validation are often not standardized. Establishing robust processes for data collection, verification, and reporting therefore represents a key operational challenge.

TRANSPARENCY AND CORPORATE GOVERNANCE

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Internal and external stakeholders expect clear, transparent information on sustainability performance and governance structures. Transparent reporting strengthens a company’s reputation, competitiveness, and appeal as an employer—and thereby also creates measurable economic value.

ESG consulting services

To help you meet sustainability reporting requirements, we provide comprehensive support through our interdisciplinary teams and experts in financial reporting, financial services, finance processes, risk & compliance, and digital architecture.
Our range of services extends from taking over the entire project—including project management—to providing support for specific sub-areas or even one-off tasks. Accordingly, we can tailor our consulting approach to ensure that your employees are involved as effectively as possible, in line with your desired and feasible level of engagement.

CSRD

EU taxonomy

VSME

Your contacts for ESG reporting

Natalie Wurms

Partner Advisory

München

+49 170 1163863

Natalie.Wurms@wts.de

Michèle Färber

Partner Advisory

München

+49 170 2053099

Michele.Faerber@wts.de

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ESG Tools - What Factors Should Be Considered?

We continuously monitor and analyze the ESG software market to identify current developments and trends at an early stage. Based on this, we systematically evaluate relevant providers and solutions. This enables us to recommend tools that are tailored to your specific needs and provide optimal support for your requirements.
A structured evaluation based on key functional categories allows for a targeted comparison of various ESG tools. This makes it clear which solution best suits your organization—not only technically but also in terms of content.

Data Collection & Integration

It is important that ESG data can be captured in a structured, flexible, and efficient manner and seamlessly integrated. This includes data collection throughout the year, system integrations (ERP, line-of-business systems, APIs), file imports, and the reuse of historical reports. AI features such as automatic suggestions, pre-population, or text extraction can further simplify data capture.

Data Management & Data Processing

A key consideration is how ESG data can be processed, consolidated, and refined within the tool. Relevant factors include role and process models, the ability to map multiple companies, the configurability of fields and workflows, and transparency in calculation logic. Additionally, forecasting functions, emission factor libraries, IT security, data protection, and AI-powered data processing play a role.

Reporting & Analytics

The key factor is the extent to which regulatory and internal reporting is supported, and how flexible this support is. This includes predefined report templates, automated generation, export interfaces (e.g., Excel, PowerPoint, BI tools), as well as real-time dashboards and KPI visualizations. AI-based text generation, benchmarking, and intelligent visualization suggestions also contribute to effective reporting.

Governance, Security & Compliance

What matters most is how the tool maps governance structures, internal controls, and regulatory requirements. This includes role and authorization models, policy and approval processes, plausibility checks, change logs, and audit reports. In addition, AI-based validation and verification mechanisms enhance data security and traceability.

Usability, Implementation & Support

The key factor is how practical and user-friendly a tool is in everyday use. Crucial factors include implementation time, training and support services, and intuitive user guidance. Supporting ESG content, context-sensitive help texts, and AI-powered assistance features promote user acceptance and efficiency.

Intelligently mapping CSRD complexity

In-depth coverage of key CSRD topics is crucial because it demonstrates how effectively a tool supports users in meeting complex requirements through intelligent features. These include, among others, emissions management, stakeholder and materiality analyses, IRO management, policies and targets, supply chain management, as well as resilience and scenario analyses.

Comprehensive coverage of relevant standards

It is important to understand the extent to which a tool covers additional standards and frameworks beyond the CSRD requirements. This highlights how comprehensive and future-proof the solution is. Relevant extensions include, for example, GRI, the GHG Protocol, SBTi, TCFD, CDP, CBAM, CSDDD, and EUDR.

Frequently Asked Questions About ESG

What is Omnibus, and how does it affect sustainability reporting?

The EU Omnibus Package, presented in the spring of 2025, aims to revise regulations in the ESG area—specifically the CSRD (reporting), CSDDD (supply chains), and the EU Taxonomy (classification system)—reduce the bureaucratic burden on companies, and provide relief through temporary deferrals (“Stop the Clock”). Specifically, the thresholds for sustainability reporting will be raised (companies with more than 1,000 employees and revenue exceeding 450 million euros), the start of reporting obligations for large unlisted companies will be postponed to the 2027 fiscal year, the due diligence requirements of the CSDDD will be extended to even larger companies (5,000 employees and €1.5 billion in revenue, with a focus on direct suppliers and a postponement to July 2029), and overlaps between the various ESG frameworks will be harmonized to avoid redundancies.

Who is affected by the CSRD and the EU taxonomy?

Large companies with more than 1,000 employees and net revenue exceeding 450 million euros are subject to the CRSD and the EU Taxonomy. Companies that fall below these thresholds are exempt from reporting requirements. However, to address issues related to the value chain, financing, or other stakeholders, voluntary implementation of sustainability reporting and the tracking of KPIs using VSME may be beneficial.

What is the difference between CSR and ESG?

CSR—Corporate Social Responsibility—refers to a company’s social responsibility toward sustainable development. A key characteristic is that this approach is voluntary, meaning it goes beyond what is required by law. Within the context of the CSRD, CSR is also used as an abbreviation for the Corporate Sustainability Reporting Directive.
ESG—Environmental, Social, and Governance—refers to the environmental and social aspects of corporate management. Sustainability and effective governance are placed at the center of corporate policy.
While CSR aims to hold a company accountable, ESG criteria make the measures taken measurable. Since CSR activities vary greatly depending on the company and industry, there is a lack of comparable metrics. ESG criteria, on the other hand, are generally far more quantifiable.

Further topics you could be interested in

EU taxonomy

CSRD and ESRS

VSME

ESG Discovery Phase

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