In recent years, ESG (Environmental, Social & Governance) has dominated business discourse, primarily as a new regulatory obligation yet another cycle of reports and compliance requirements. However, recent announcements from the European Commission through the Omnibus Regulation are partially reshaping this narrative, reconsidering the pace and complexity of mandatory compliance.

A Shift in ESG Thinking: From Reporting to Value Creation

This marks a shift in the ESG approach and a redefinition of the core reasons why a company should operate based on the principles of sustainable development.

More specifically, businesses that continue to view ESG solely as a compliance strategy risk losing direction if they misinterpret the Omnibus developments and postpone initiatives that are already in motion.

By doing so, they may miss the opportunity to enhance performance, reduce costs, optimize operations, strengthen their social profile and market image, create genuine value, secure their place in the supply chain, and become more attractive to investors and lenders.

The most successful companies globally have already moved from a “compliance” mindset to an “investment opportunity” mindset. They use ESG data to reduce risks, forecast trends, access green capital, and attract investors, employees, and customers in a sustainable way.

But what are the real obstacles to strategic ESG implementation?

Despite the clear benefits, the transition is not easy. Organizations that aim to integrate ESG as a strategic priority often face three key challenges:

• Lack of cross-departmental alignment:

The Sustainability Officer, CFO, Operations, HR Manager, and CEO often have different understandings of ESG. As a result, goals are not promoted collectively, and data gets lost in disconnected platforms and Excel sheets.

• Inability to timely predict deviations from targets:

The lack of automated and frequent data collection hinders the prediction of performance indicators and prevents timely corrective actions.

• High costs:

A non-automated approach leads to wasted labor hours and inefficient resource use in complex processes that miss the core objective.

Turning ESG Data Into Business Intelligence with Technology

To realize results from ESG, an organization must be able to extract meaningful value from the massive volume of ESG data. It needs tools that can identify critical data points, automatically collect and correctly integrate them, ensure their accuracy, convert them into measurable ESG KPIs, link them to corrective and preventive actions (CAPAs), and monitor progress toward targets while predicting deviations in advance.

The most effective ESG management solutions offer:

• Integration of data from various corporate systems such as ERP, HRMS, Energy Management, Financial Management, etc., to generate reliable quantitative and qualitative performance indicators.

• Data unification across different corporate entities such as subsidiaries, service and product production centers, with monitoring of both individual entities and the group as a whole.

• Collaboration and coordination among company executives.

• AI-powered forecasting models that help identify deviations from targets early and manage risks more effectively.

• Comprehensive traceability and audit trail systems, allowing full transparency, reliability, and regulatory compliance while minimizing the risk of illegal or deliberately concealed actions.

• Automated reporting, reducing the preparation time for audits by up to 60%, while leveraging ESG processes in the day-to-day effort to reduce operating costs and environmental footprint.

Such solutions are not just “facilitators” of ESG processes — they become true allies for management and staff at every organizational level, serving not only the company’s shareholders but also all stakeholders: customers, suppliers, employees, local and broader communities, which are the true sources of value creation, prosperity, and overall sustainability.

The Next ESG Day: How Can a Business Begin?

Transitioning from ESG reporting to strategic ESG doesn’t necessarily require massive investments or a radical overhaul of corporate procedures. It begins with three key steps:

1. Identify corporate goals aligned with the three Ps (Profit, People, Planet), and determine the ESG KPIs that support them.

2. Pinpoint sources of primary data, and develop automated methods for their collection and processing, leading up to the creation of final reports.

3. Utilize predictive and analytical tools to support decision-making and reduce risks.

ESG is not a cost but an investment in the organization’s long-term sustainability and value. It’s the new measure of business maturity.

Companies that realize this early, leveraging technology and building a coherent ESG strategy, will strengthen their position in the value chain — in a highly competitive environment where only those operating within the framework of the three Ps will ultimately survive and grow.

The technology is already here at Yodiwo — all that’s left is for you to put it to work.