Five years ago, if companies had been asked how they managed sustainability reporting, most would likely have answered: Excel and spreadsheets. Its flexibility and familiarity made it the go-to tool for tracking ESG data. But the ESG landscape has changed dramatically.
New regulations, higher data expectations, and increasing reporting complexity are stretching Excel beyond its limits. As companies face more rigorous requirements, like those from the Corporate Sustainability Reporting Directive (CSRD) and the Voluntary Standard for non-listed SMEs (VSME), relying on spreadsheets can quickly become burdensome.
This raises the question: Are we reaching the limits of Excel regarding ESG reporting? This article explores the shortcomings of Excel for sustainability reporting, particularly under the CSRD and VSME, and highlights the need for more advanced and specialised reporting solutions.
In this article:
- The Evolution of ESG Reporting: Accountability, Compliance, and Transparency
- Why Does Excel Fall Short for ESG Reporting Requirements?
- Excel Alone Isn’t Enough for ESG Reporting
- Excel Struggles with the Volume and Complexity of ESG Data
- Collaboration in Excel Can Be Challenging
- Excel Doesn’t Include ESG Reporting Guidance
- Excel Doesn’t Support Traceable, Auditable ESG Data
- Excel Is Not Built for Standardised, Machine-Readable ESG Reporting
- ESG Reporting Softwares as Alternative to Excel Shortcomings
The Evolution of ESG Reporting: Accountability, Compliance, and Transparency
Over the past decade, sustainability reporting has rapidly matured, shifting from a voluntary best practice to a strategic or regulatory imperative. This transformation has been shaped by a wave of frameworks, both mandatory and voluntary, including the Global Reporting Initiative (GRI), TCFD, CDP, and the former Non-Financial Reporting Directive (NFRD) in the EU.
With the Corporate Sustainability Reporting Directive (CSRD) and its ESRS, the EU has taken a significant step towards standardising ESG disclosures across its member states. It mandates structured, comparable, and auditable disclosures for large companies, ensuring that stakeholders have access to reliable ESG data. At the same time, the European Commission is working to make voluntary ESG reporting more accessible and consistent, through initiatives like the Voluntary Standard for non-listed SMEs (VSME) and the upcoming Voluntary Standards developed by EFRAG for companies outside the CSRD scope.
This dual approach reflects the EU's effort to balance regulatory ambition with practicality. However, it also adds complexity to the ESG reporting landscape, increasing the need for digital tools that support structure, traceability, and data integrity, capabilities that Excel was never designed to deliver.
Why Does Excel Fall Short for ESG Reporting Requirements?
Excel Alone Isn’t Enough for ESG Reporting
Excel, as a general-purpose tool, is not designed to support the different stages of ESG standards or their ongoing updates. As a result, ensuring compliance becomes challenging. Excel is one piece in a fragmented toolkit, typically involving multiple software platforms. For example, companies might use Excel for KPI tracking and quantitative analysis, Word or another text editor for writing and formatting the narrative sections, and a separate solution for electronic tagging and final report submission.
Juggling between disconnected tools increases the risk of data loss, version mismatches, and inefficiencies, ultimately slowing down the ESG reporting process. In contrast, dedicated ESG reporting platforms are built with both regulatory frameworks and user experience in mind. They integrate every step of the reporting journey, including data collection, KPI calculation, and final report generation. All within a single, cohesive environment. These platforms also ensure you are always working with the latest version of ESG requirements, eliminating the need for manual updates.
Excel Struggles with the Volume and Complexity of ESG Data
ESG frameworks like the CSRD and VSME require companies to report on complex, organisation-wide data. Excel, however, is not built to manage high volumes of data from diverse sources, such as unstructured internal documents or multiple ERP systems. Manually consolidating and standardising this information in Spreadsheets can lead to performance issues, inconsistencies, and human error.
In contrast, advanced ESG reporting solutions are designed to handle complex data environments. They improve data accuracy, centralise ESG information, and streamline reporting processes. This helps companies not only to comply with regulatory standards but also to track and improve their sustainability performance.
Crucially, ESG platforms offer native integrations with internal systems, ensuring that data flows seamlessly and stays up-to-date. This eliminates manual handling, reduces the risk of errors, and maintains a clear audit trail from source to report.
Collaboration in Excel Can Be Challenging
To cope with such data complexity and volume, collaboration across actors of the entity structure will be key. The ability to set tasks and responsibilities, monitor progress, ask for reviews, validate final answers, and keep track of the changes (i.e. versioning, audit logs) will be the stepping stones of a successful reporting journey.
Having the ability to set up clear workflows with a potent ownership and task system, backed by more advanced collaboration features (i.e. users’ modifications real-time tracking, versioning, deadlines and review settings, etc) will ensure that all actors of the ESG reporting journey will understand what is expected of them, will be able to contribute to the answers, and ask for approval. In turn, managers will be able to monitor the overall progress, set new tasks and deadlines to continue the effort, as well as review existing answers to seamlessly generate their end report.
Unfortunately, such features are not the core offering of Excel and can lead to the generation of several versions of the same file, the loss of data across versions and complexity in monitoring the ownership and progress at a granular level. Advanced ESG reporting softwares such as Greenomy, on the other hand, foster a culture of collaboration with built-in workflow features for easy task management.
Excel Doesn’t Include ESG Reporting Guidance
While Excel remains a familiar and adaptable tool, it is not designed to manage the complexity of modern ESG frameworks like the CSRD, which can require reporting on up to 1,200 interconnected data points. Even the simplified VSME calls for clear guidance, for instance, to distinguish between mandatory and optional disclosures and understand when each applies. Additionally, the responsibility falls entirely on companies to assess the relevance of each data point manually. This often leads to a time-consuming process that demands close cross-functional collaboration and frequent consultation of official guidance.
In contrast, advanced ESG reporting softwares like Greenomy integrate the latest frameworks directly into the platform. It provides real-time, in-platform guidance, including contextual explanations and how-to support for each data point. Disclosures are automatically interlinked, preventing redundant data entry and ensuring consistency across the report. This not only saves time but also reduces manual errors, making the reporting process more efficient, especially for companies navigating new frameworks like the CSRD or VSME for the first time.
Excel Doesn’t Support Traceable, Auditable ESG Data
Both the CSRD and VSME highlight the need for accurate, traceable, and auditable ESG data, requirements that Excel struggles to meet. Manual entry, formula errors, and a lack of audit logs or data lineage make it difficult to ensure transparency and accountability over time. The CSRD places sustainability reporting under the direct responsibility of a company’s board and requires limited (and soon reasonable) assurance from independent auditors. This demands a complete audit trail from source to disclosure.
While the VSME does not require third-party verification, it still necessitates data traceability to support collaboration and reuse past work. Excel also lacks support for digital tagging formats like iXBRL, which are required under CSRD to produce machine-readable reports.
In contrast, advanced ESG reporting tools offer built-in audit logs, version control, and tagging capabilities, ensuring compliance, accuracy, and streamlined workflows from data collection to final report submission.
Excel Is Not Built for Standardised, Machine-Readable ESG Reporting
The ESRS have introduced a structured and harmonised approach to ESG disclosures across the EU. By enforcing common KPIs and standardised methodologies, they significantly enhance the transparency and comparability of sustainability data, allowing stakeholders to reliably benchmark companies across sectors.
To further improve usability and align with the digital era, the CSRD requires companies to submit their sustainability reports in a machine-readable format starting in 2026 (for the 2025 reporting year). To support this shift, the European Single Electronic Format (ESEF), previously used for financial reporting, has been extended to cover non-financial disclosures. Reports must now be prepared in Inline XBRL (iXBRL), enabling streamlined analysis and integration of both financial and ESG data in a single digital format. Excel, while flexible, does not natively support iXBRL or enforce the structural consistency required under these new standards.
ESG Reporting Softwares as Alternative to Excel Shortcomings
As ESG Reporting evolves, businesses will increasingly need to move beyond Excel and adopt tools tailored to the complexity of today’s requirements. While Excel remains a versatile tool, it was not built for the structured, auditable, and data-rich demands of ESG reporting. Its limitations can hinder accuracy, efficiency, and consistency, while dedicated ESG softwares offer automation, guidance, and actionable insights that give companies a clear competitive edge.
Every organisation has unique sustainability reporting needs, which is why choosing the right solution matters. Greenomy’s platform is built on years of experience in ESG data collection and has been designed to support organisations of all sizes and sectors. It addresses the real-world challenges of ESG reporting with built-in guidance, intuitive workflows, and collaborative features that simplify the entire process, from first-time reporting to full regulatory compliance.
Discover how Greenomy can streamline your ESG reporting, book a demo today.
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