A 2025 PWC report showed 84% of companies are standing by their climate commitments.

Rather than a compliance ‘must-do’, the concept of ESG reporting is starting to be seen as holding tangible value to business growth and helping tackle societal and climate issues. In fact, evolving regulatory requirements in Europe coupled with investor and stakeholder expectations means ESG reporting is becoming ever more important to businesses across sectors.

Imperatively, the process is increasingly falling into the CFO’s domain of responsibilities. The underlying fact is that ESG is not just for sustainability teams; it’s pivotal to corporate finance, impacting everything from capital allocation to investor confidence.  

For CFOs, true mastery comes from being able to integrate real-time ESG reporting into the heart of their finance processes. This will empower them to place their companies at the forefront of ESG initiatives and on the path to long-term sustainable growth.

But what are the key steps to mastering real-time ESG reporting?

Make ESG a core aspect of financial strategy

The pillars of ESG – sustainability, social initiatives, and governance frameworks – all impact financial performance. Therefore, it makes sense that ESG should form a key part of the finance strategy. Naturally, ESG initiatives need investment and resources, so the CFO’s and finance department’s oversight of this process is paramount.

These projects can then deliver a return on investment, whether that’s a direct impact on profitability or a broader effect on brand performance and investor confidence. Again, the finance function has an important role to play in being able to measure and report on these results. To do this, ESG goals and metrics must be considered in finance activities like budgeting, forecasting and risk analysis.

Directly collaborate with the CSO

Cash flow, financial reporting and resource allocation are all activities a CFO is well acquainted with. ESG, on the other hand, has been a separate function, often headed up by a Chief Sustainability Officer (CSO), to maintain regulatory compliance and investor confidence. But as the two cross over more and more, collaboration between the CFO and CSO (if there is one) is crucial. Maintaining open communication lines and understanding how the departments can support each other will really help with building real-time ESG reporting and strategy.

Monitor changing regulations and requirements

Regulations are constantly evolving to match shifting ESG priorities and needs. As part of its Omnibus legislative package in February, for example, The European Commission updated its requirements for its Corporate Sustainability Reporting Directive (CSRD) to focus on the largest organisations with the most damaging environmental impact. (Specifically, it’s raising the reporting threshold from entities with 250 employees to those with 1,000.)

This should simplify ESG reporting for many medium-sized companies while ensuring they maintain high standards – in an increasingly competitive global market, this is an essential balance to strike.

Consider the benefits of voluntary reporting

A reduction in regulatory requirements or push back from certain businesses shouldn’t deter CFOs from ESG reporting. In fact, voluntary reporting and ESG integration can boost their reputation with consumers and investors, and it’s something still encouraged by regulators.

With regards to the CSRD, given that many medium-sized companies now exempt from reporting would have restructured their processes to meet regulations, it makes sense to continue reporting in a more streamlined manner and adopt a transparent approach. Above all, this can drive sustainable value creation and strengthen trust in the market. 

Assess whether your tech can accurately measure and report ESG performance and KPIs

Ultimately, trust comes from accurate ESG reporting. If CFOs can access real-time data to effectively allocate resources and capital to drive real change, they can prove the value in ESG projects and avoid greenwashing claims. Precisely measuring this impact rests on investing technology and processes that can enhance the collection, analysis and reporting of ESG data.

Two key software functions that can help achieve this are effective system integration and business intelligence. A cloud finance management system should be able to integrate with a range of business critical and banking systems to form a central hub of data and financial oversight. With this data, business intelligence capabilities can then generate reports that could show the financial impact of an ESG initiative for a variety of dimensions, whether that’s a product, department or a specific location, as well as the company-wide impact.

Incentivise organisational buy-in

Sustainability in particular is directly linked to business strategy and investment. So when it comes to integrating ESG into financial planning and decision making, today’s CFO has a leading role to play in incentivising buy-in across their company – they can set an example and create a top-down influence for others to follow. This could come from motivating employees to look into ESG opportunities or effectively communicating and reporting on progress to the C-suite, various business departments, suppliers and consumers. By incentivising buy-in in their own company, they could also encourage others in the sector to follow suit, contributing to sector-wide climate and social progress. 

Mastering the art of ESG reporting

Despite reports of some companies backtracking on ESG priorities, climate and social imperatives, alongside consumer and stakeholder expectations, means ESG’s importance is growing by the day. Modern CFOs have already evolved to become strategic business advisors and ESG reporting is becoming another key responsibility to manage.

This checklist provides a starting point for CFOs in their mission to master real-time ESG reporting and make it an intrinsic part of their finance processes. If they can master the art of doing this, they can drive ESG projects across their company and, in doing so, lay the foundations for ongoing sustainability and growth. 

For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.