Reporting Requirements and Transparency

Sustainability reporting means disclosing how a company integrates environmental, social, and governance (ESG) factors and what it does to improve them. Globally, almost 20 organizations pursuing diverse objectives are involved in defining sustainability reporting standards, including non-profits, business consortiums, and the United Nations programs ⁽²⁹⁾.

This heterogeneity makes the harmonization of reporting standards a daunting challenge. For instance, companies that fall within the scope of the EU Corporate Sustainability Reporting Directive (CSRD) are required to report according to the European Sustainability Reporting Standards (ESRS), which differ from the most widely used standards issued by the Global Reporting Initiative (GRI). At the same time, companies must also comply with the EU Taxonomy Regulation, which emphasizes environmentally sustainable business activities, and the Corporate Sustainability Due Diligence Directive (CSDDD), which focuses on human rights and environmental due diligence ⁽³⁰⁾.

Although complying with diverse ESG requirements can be complex and costly, comprehensive ESG reporting offers benefits that extend beyond regulatory compliance. Enhanced ESG transparency often drives action by enabling companies to identify inefficiencies, reduce costs, and achieve substantial financial gains. A McKinsey & Company study found that executing ESG effectively can impact operating profits by up to 60%, for example, through reduced energy consumption or lower water intake ⁽³¹⁾.

Investors in the US and Europe also increasingly prioritize ESG factors as a strategy to mitigate risk and portfolio volatility ⁽³²⁾. Environmental metrics often receive significant attention, particularly voluntary commitments to the Science Based Target initiative (SBTi), to which many leading companies subscribe. However, social factors like indoor air quality, thermal comfort, lighting, and noise levels are equally important. These elements directly impact occupant health and well-being, reducing long-term risks, preventing disease, and increasing productivity. With 86% of S&P 500 companies now voluntarily disclosing ESG data, transparency has become a standard expectation, reinforcing trust among investors and customers ⁽³³⁾.

Reliable, high-quality data is fundamental to meaningful ESG reporting. However, many buildings face challenges in obtaining and integrating this data. Critical metrics are often fragmented across systems, delivered in incompatible formats, or consolidated manually using basic spreadsheets, which impedes a clear understanding of operations. To overcome these hurdles, companies increasingly adopt centralized reporting platforms and real-time monitoring systems, capturing and managing data across real estate portfolios for decision-making and public reporting.

Accurate data collection at granular levels enables better insights into building operations and resource optimization. For example, Germany’s “Heizkostenverordnung,” or Heating Costs Ordinance, mandates the detailed measurement and allocation of heating and hot water costs, requiring property owners to install devices that track individual energy consumption and provide monthly usage transparency. Such regulations underscore the importance of data in driving sustainability and efficiency. Similarly, monitoring and reporting are integral to some green building certifications, such as RESET, which mandates accredited IEQ monitors connect to the RESET Cloud and report data every 30 minutes ⁽³⁴⁾.