Sustainability reporting difficulties: 5 practical challenges + solutions

A sustainability report is a tool that allows companies to communicate their environmental, social, and governance (ESG) impacts to stakeholders and outline strategies for improvement.

To be credible, a sustainability report must rest on solid foundations: reliable data, internal expertise, clarity in communication, and integration with corporate strategy.

In this article, we explore 5 common challenges and practical solutions to address them.

Collecting and ensuring the reliability of ESG data

Sustainability reporting depends on the ability to gather complete, consistent, and verifiable data.

However, collecting this information remains a challenge for many companies. Data is often scattered across departments, stored in non-standardized spreadsheets, and subject to limited oversight. This can lead to errors, misalignments, and difficulties in tracking sources.

To improve ESG data management, companies can:

• centralize information in a single system accessible to all relevant departments, reducing errors, duplication, and ensuring traceability;
• adopt ESG data management platforms that simplify data collection and analysis;
• introduce regular checks and internal audits to strengthen data reliability and prevent errors;
• Invest in team training to build skills in sustainability data management.

Regulatory complexity and multiple standards

In recent years, sustainability reporting rules have multiplied. European directives like the CSRD (Corporate Sustainability Reporting Directive) and international standards such as the GRI (Global Reporting Initiative) or SASB (Sustainability Accounting Standards Board) often coexist, creating confusion about which indicators to measure and how to disclose them.

The challenge lies not only in the number of rules, but also in their constant evolution. Standards and regulations are updated regularly, making it difficult for companies to keep pace and remain compliant.

To navigate regulatory complexity, companies can:

• select the most relevant standards: if not bound by mandatory reporting, choose the framework best aligned with corporate needs. For example, SASB focuses on investor-related ESG performance, while GRI targets broader environmental and social impacts for multiple stakeholders;
• monitor regulatory updates: establish an internal process or rely on specialized services that provide real-time alerts on new requirements.

Managing resources and timelines 

Drafting a sustainability report requires input from many departments: finance, legal, HR, procurement, logistics. Their contributions are key to providing a complete picture of economic, environmental, and social dimensions.

Yet the process can be challenging. Teams often have other priorities, lack ESG-specific expertise, and risk slowing down data collection or lowering information quality.

To address these challenges, companies can:

• plan ahead: create a reporting calendar with clear deadlines to distribute workloads and avoid last-minute pressure;
• leverage digital tools: use ESG platforms to centralize data and streamline oversight;
• engage external expertise: consultants can support in process design, complex data collection, and report preparation, accelerating progress without straining internal resources.

Communication and the risk of greenwashing

Many sustainability reports still show critical weaknesses: long-winded texts, self-promotional tones, and a lack of concrete impact data. This makes it harder for stakeholders to assess true commitment and raises concerns about greenwashing.

Another recurring issue: vague sustainability goals (“reduce environmental impact,” “promote diversity”), often missing indicators or deadlines. Without measurable and verifiable targets, reports lose value as tools for monitoring and transparent dialogue.

To ensure clear and credible communication, companies should follow these three principles:

• ​accuracy: information must reflect real actions and results, based on reliable data and sources.
• Verifiability: claims must be supported by certifications, audits, internal records, or references to external studies.
• Contextualization: every figure should include scope, calculation methods, and timeframe.

Integrating sustainability into corporate strategy

Many companies collect large amounts of sustainability data but struggle to turn them into actionable insights for strategic decision-making.

Without a clear link between reporting and corporate strategy, data risk becoming mere numbers rather than drivers of change.

To make ESG data a true strategic asset, companies should: ​

• engage leadership: top management must lead by setting clear goals and embedding sustainability into corporate strategy and values;
• prioritize material issues: identify ESG topics that matter most to the company and its stakeholders to focus efforts on real priorities;
• adopt continuous improvement planning: set short- and medium-term actions to advance sustainability progressively and realistically.

Our contribution

At Kyklos Carbon, we help companies navigate complexity and support them at every stage of the sustainability journey—from data collection and analysis, to sustainability reporting, to strategic improvement planning.

Our approach turns reporting into a practical management tool, making sustainability an integral part of business decisions, not just a communication exercise.

Get in touch to create a tailored sustainability report for your company.