For any ESG initiative to work, you need to know that it’s fuelled with accurate, reliable data. Data governance is key to making sure you can trust your data, and the people who interact with it.


The ESG credentials of your business live and die by trust.

If you cannot trust the insights that your data is giving you, neither can your investors, customers, or internal stakeholders. At best, incomplete ESG reporting is a missed opportunity for added revenue and loyalty. At worst: penalties to pay, investors stepping back, and PR headaches.

You may have invested in data management software and analytics platforms previously, but if you don’t have a culture that recognizes the importance and value of quality data, your efforts will be in vain.

Building a data-first culture is one of the benefits of data governance. By the end of this article, you’ll know how important data governance is to delivering trustworthy ESG – and if you want to know more about the relationship between data and ESG, you can download ESG unchained: A guide to finding your ESG hotspots.

First things first: what is Data Governance?

In short, data governance is about how people and systems interact with data.

Concerning ESG, this can go beyond stakeholders within your organization, impacting your entire supply and value chains. You’ll likely need to obtain information from suppliers and, progressively, third parties to get a complete and accurate picture of your ESG status. And with new Scope 3 reporting requirements on the horizon in the U.S., failing to collect the necessary information from your value chain could carry the risk of liability.

Yet more than simply having the systems in place that can feed you the data you need from its many sources, it’s better to think of data governance in terms of a cultural shift – a method of not just having the data you need, but having confidence in accuracy.

Remember: you cannot force people to care about data – but you do need them to care about it for it to be trustworthy. That means communicating and educating the ‘why’ not just the ‘how’ when it comes to good data hygiene and management.

Data governance can help you to build the culture you need to engage people with data, communicating what data they are responsible for, where their responsibilities fit in the wider apparatus, and why they should care about it, e.g., what’s in it for them.

How can data governance help your ESG initiatives?

The benefits of data governance go far beyond ESG reporting. That being said, ESG particularly benefits from a robust, data-first culture. Let’s review:

1.     Data governance brings consistent, long-term data quality

Data that doesn’t meet a certain standard is unusable at best, and misleading at worst. If your business has been burned by bad data, you might have embarked on a ‘data quality’ initiative, which is a constructive response in the short term. Yet too often we’ve encountered cases where data quality initiatives are the only response to bad data: they fix the problem in the short term, but they don’t look at the bigger picture.

It’s the distinction between treating an illness and preventing one.

A healthy respect for data ensures that data quality doesn’t dip after a project is complete. In fact, it ensures that reliable data is on hand whenever you need it. This removes one potential avenue for error before you even reach the planning phase of your next project – or the next phase of the ESG reporting cycle.

2.     A better data culture builds a better ESG culture

ESG and data culture are linked by the fact that both require a certain amount of ‘buy-in’:

  • If your business isn’t required to report on at least some aspects of ESG, it may be hard to justify adding another ‘ask’ to your colleague’s plates.
  • Likewise, if the data isn’t seen as essential to a tangible project or business need, it can be all too easy to ignore it.

Frankly, this status quo is understandable – but not sustainable. You will need to be on top ESG reporting as it turns from a patchwork of relatively minor legal requirements and private-sector initiatives to a more robust framework of legislation that covers multiple aspects of your business. Rather than being a nuisance, however, this reality should be an opportunity to kickstart a culture of data governance.

Fortunately, it doesn’t require a ‘hard sell’ to your colleagues, just the correct framing. Aside from delivering information that makes your business more efficient, less wasteful, and more socially responsible, data governance simply makes their lives easier.

3.     Data governance builds data literacy 

‘Data’ can be a bit of a dirty word, if only for its association with complex spreadsheets, confusing BI tools, and a high barrier to entry. In your business, it’s crucial that no one fears data, not even those who apparently have nothing to do with it. ‘Democratising’ rather than ‘departmentalizing’ your data is a critical part of data governance.

As it becomes more important for everyone from the C-suite to the front line to know their role in handling ESG data, data governance ensures that they understand the very basics of data management, as well as the purposes that data serves. So, it’s important that the less experienced are given the support and resources they need to handle data with confidence, outside of its traditional siloes.

4.     Data governance ensures compliance

Finally, data governance is itself a part of ESG — the ‘G,’ to be exact. In the likely case that you hold personally identifiable information (PII) on clients and employees, then storing, protecting, and (eventually) disposing of this data falls under GDPR. The penalties for not following GDPR are severe.

Data governance ensures that your colleagues feel empowered to manage data in a compliant fashion, as they have the framework and understanding to do so. In a broader sense, including data in your wider governance initiatives sends signals to internal and external stakeholders that your business is being run diligently.

Deeds, not words – 5 steps for building a culture of data governance for ESG.

Delivering a data governance transformation is about acting, not saying. This is all the more true when your ESG claims are on the line. So, here are five quick takeaways that you can put into practice for building an appreciation of data governance for ESG:

  1. Tackle the quality of your data to establish a good foundation. Data governance will give you long-term tools to ensure that you can rely on exceptional data. But it requires you to understand and, where possible, improve your current data.
  2. Appoint ESG data champions in your business. Rather than a top-down approach, you will find more success by incentivizing people from all levels to take the lead and serve as touchpoints for any ESG data-related questions.
  3. Ensure that best practice goes right to the top. The best leaders lead by example. Showing, rather than telling, should serve as a model for department heads, and then their line reports to follow.
  4. Understand that data governance is a marathon, not a sprint. Don’t let data quality become an item on a project checklist – data governance requires you to change attitudes and give people a real appreciation for data over time. Workshops, drop-in sessions, and even gamified data governance lessons could all increase engagement.
  5. Establish ownership. As well as identifying ESG data champions, understanding who has accountability for different aspects of ESG is vital to keep data managed effectively. There will be natural fits in a ‘governance framework’ (such as HR managing employee wellbeing metrics) but defining other owners early in the process will ensure that people know where they stand.

The power of good data can’t be overstated. But remember, data governance is a journey, not an objective, and it goes far beyond beefing up you ESG reporting.

Still getting to grips with ESG and what it entails for your data – now and in the future? Download our guide ESG unchained:  A guide to finding your ESG hotspots.