Article

From data to reporting: A guide to leveraging ERP analytics to track ESG performance

Jul 21, 2025 · Authored by Cindy M. Bratel

Organizations are facing increasing pressure from investors, customers, employees and regulators to demonstrate their commitment to sustainable and responsible practices. Achieving success in a world that demands transparency and accountability requires robust technology and strategy. That’s where enterprise resource planning (ERP) systems enter. ERP platforms are becoming primary tools to track, analyze and communicate environmental, social and governance (ESG) efforts and serve as a lens through which organizations can understand their true impact, make informed decisions and demonstrate their commitment to creating value. Technologies like IFS Cloud have made ESG performance tracking accessible to businesses, offering unmatched flexibility, real-time data processing and data integration capabilities.

Q: How does an ERP platform support an organization’s ESG goals?

A: Enterprise resource planning (ERP) systems serve as data ecosystems capable of capturing, analyzing and reporting ESG metrics. These systems allow businesses to not just measure their ESG efforts, but to understand and improve their environmental and social impact. These systems provide a toolkit for quantifying ESG performance across various areas, including the following:

Q: How can organizations integrate ESG tracking into their existing ERP systems?

A: Organizations today face the challenge of seamlessly embedding ESG metrics into their core operations infrastructure. Integrating ESG into existing ERP systems requires a nuanced strategy involving technological innovation, cultural shift and alignment.

• Data collection and standardization: This integration starts with collecting ESG data across business operations and identifying gaps in current ESG data tracking. Following that, standardized data collection protocols should be set up. Developing and implementing consistent measurement methodologies ensures data quality and reliability.
• ESG module development: Modern ERP systems have native ESG capabilities. Embedding organizational ESG data into existing systems requires the creation of dedicated sustainability dashboards. Additionally, real-time reporting capabilities should be utilized to track environmental and social impact.
• Reporting and compliance alignment: ESG metrics must be mapped to applicable reporting standards. Organizations can ensure compliance with regulatory requirements by developing automated compliance checking and implementing transparent reporting mechanisms within the ERP platform.

Q: What are the technical and organizational capabilities required to effectively leverage ERP for ESG performance tracking?

A: Data integration infrastructure is the foundational capability for effective ESG performance tracking. Organizations should develop robust frameworks that can seamlessly connect data sources across multiple systems, geographies and domains. As ESG data increasingly becomes critical, cybersecurity and data governance systems become essential. This includes encryption technologies and secure authentication mechanisms.

Organizations should create systems for seamless communication and data sharing between sustainability, finance, operations, human resources and technology teams, ensuring transparency and collaboration. Training programs that promote sustainability literacy must be encouraged across all organizational levels. This involves creating dedicated ESG roles and upskilling existing employees.

Q: What advantages do companies gain from using ERP for ESG performance?

A: Beyond compliance reporting, ERP-driven ESG metrics offer organizations unmatched insights to bridge the gap between operational efficiency and sustainable business practices.

• Cost optimization: An ERP provides insights into resource consumption, waste generation and operational inefficiencies. These insights enable businesses to identify and eliminate unnecessary expenditures. The predictive analytics capabilities help in modeling cost savings scenarios and investing in targeted sustainability initiatives that deliver financial returns.
• Improved decision-making: Organizations get unprecedented visibility into ESG performance through ERP-ESG integration, allowing them to leverage data-driven insights. Additionally, real-time performance tracking ensures forward-looking decisions involving resource allocation and operational sustainability across all business functions.
• Risk mitigation: Modern ERP platforms function as early warning systems for environmental, social and governance risks. By continuously monitoring data streams across operations, organizations can detect potential compliance issues, supply chain vulnerabilities and regulatory challenges before they become critical problems. ERP systems also provide robust and auditable trails of ESG performance for remaining compliant.
• Stakeholder and investor confidence: ESG credentials directly correlate with market valuation and an ERP serves as a credible platform for demonstrating social and environmental impact. Hence, these platforms create auditable narratives of the company’s contributions. By demonstrating measurable ESG data points, organizations can differentiate themselves in competitive markets.

How we can help

As businesses navigate the ESG landscape, having a strategic guide and technology support becomes crucial. Baker Tilly and IFS form a powerful alliance in the world of ESG and technological innovation, helping companies transform their approach to ESG.

Turn sustainability into a strategic opportunity for growth and meaningful impact with Baker Tilly and IFS!