Investors want to trust the companies they do business with—on earnings, forecasts, and other data-driven indicators.

Now they have a new arena in which trust matters immensely: sustainability. Investors now view sustainability information as part of the due diligence process, and environmental, social, and governance data combine with financial data to make that process whole in their eyes. For companies and their CFOs, this creates a challenge: how to make sustainability data as transparent and trustworthy as investors demand.

Sources of trust, drivers of value

What drives trust and trust equity in an organization? Deloitte has identified more than 90 trust drivers across 18 enterprise domains like authentic leadership, customer experience, supply chain resilience, cyber security, compliance and other areas. Notable among them are financial integrity and data integrity. Both of those lie at the heart of a company’s ability to carry out sustainability reporting in a trustworthy manner.

Evolution in reporting is not new.

Consider the ways Generally Accepted Accounting Principles (GAAP) emerged from regulatory responses to the Great Depression, with International Financial Reporting Standards (IFRS®) arising to replace GAAP beginning early in this century. The growing need to report on sustainability in a trustworthy fashion is a similar shift, driven by large external forces and taking shape over time.

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There’s more than one type of “sustainability” in play here.

There’s the work of sustaining our planetary environment—and the work of building and sustaining each company’s health, growth, and future prospects. Trust and financial integrity are vital means to that end. They mutually reinforce each other, and the CFO and the finance team are positioned to drive that process.

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This isn’t the first time you’ve heard that sustainability has a business case and driver of value.

What’s new is that realizing that value takes more than the intent and more than the action—companies need to substantiate their sustainability achievements to a high standard. In other words, investors need data they can trust before they put their money where their mouths are.

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When trust is at stake,
companies trust the CFO

That puts sustainability data in the same elevated category as other critical data a company provides to regulators, auditors, analysts, and investors. And that puts it squarely in the CFO’s area of responsibility. The data that backs up a company’s sustainability commitments should be audited, assured, and presented in a clear, consistent way.

Trustworthy sustainability data is important for CFOs in part because sustainability has become an important component in financial statements, and in part because gathering and verifying the required data requires the organization to make a significant investment in measurement and reporting capabilities.

The Deloitte-Fletcher research has found that global institutional investors are most likely to trust either their own in-house data systems or corporate disclosures that are audited or assured. Surveyed institutional investors lack trust in the unaudited information a company self-reports and is the least used data. The same research found that sustainability investing is important to US institutional investors, and 83% have sustainability policies in place.4

There’s one place where the comparison to other data falls short. In many financial and other compliance areas, CFOs are managing data in accordance with well-established regulatory and reporting standards. In the sustainability arena, regulations around the world are still evolving. Yet the investor demand for trust and clarity is happening right now. Once regulations are in place, the consistency and standardization they provide may clarify the landscape. But in the meantime, investors are relying on what companies decide to report.

While the clarity of available data lags, organizations may be tempted to engage in what has been termed “greenhushing”—holding back on some information, perhaps because it’s difficult to provide with precision. The reasoning? Better to say nothing than to be found in error or to fall short of commitments. Yet this can have unforeseen competitive consequences because some rating agencies publish comparative lead tables that put different companies’ sustainability information side by side. No reporting organization or data point exists in a vacuum, and if someone shows progress where you report nothing, the reputational impact can be immediate.

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Obstacles to overcome

The resolve to evolve sustainability data and trust is like sustainability itself—easy to declare and difficult to execute. In the Deloitte 2023 CxO Sustainability Report, executives across industries ranked the “difficulty of measuring environmental impact” as the most frequently cited obstacle in their sustainability efforts. In addition, many large organizations continue to aggregate sustainability data on spreadsheets, which makes it difficult to trace individual pieces of information—for example, at the asset or facility level—back to their sources.

When sustainability data or its lineage is missing or incomplete, that isn’t by itself “untrustworthy”—but it doesn’t contribute to trust either. These grey areas are among the most difficult to navigate.

One way to address that concern is with a deliberate focus on Sustainability Data Management. By pairing physical sustainability measures with data management that includes broad collection, third-party integration, supplier tracking, and other measures, it becomes easier to establish granular visibility into sustainability performance and satisfy stakeholder demands.

Remember that there is more to achieve with sound sustainability data than the positive of building new trust and value. There are also negatives to overcome. When you work to justify the return on sustainability investments, part of your audience includes people who may doubt the entire exercise.

One step at a time

As we help our clients navigate these times of uncertainty, we dive into some insights in our recent global survey Earning trust with investors through better sustainability data. Based on our research and other resources, we were able to uncover four actions that can help earn investors' trust in corporate sustainability commitments.

Strengthen sustainable governance capabilities through greater coordination across the C-suite and everywhere data is gathered.

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While the Chief Sustainability Officer (CSO) may drive the organization’s sustainability strategy, all C-suite leaders, the board, and managers across the business have roles to play for an organization to reliably execute its sustainability commitments. Education about sustainability goals should span the business, so people understand the data they’re gathering and passing up the chain instead of delivering it blindly. More than 60 percent of responses to a 2023 global survey of board directors say that sustainability will be the top issue that affects trust in the next one to three years—ahead of other issues such as customer experience and cyber security.5

Invest in sustainability measurement, reporting systems, and compliance solutions to enable more robust, higher-quality disclosures.

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Establishing trust with investors is not a “one-and-done” objective. Many large corporations have already begun developing sophisticated reporting capabilities to get ahead of impending regulatory requirements. Recent research indicates sales of software solutions that help companies track and report on sustainability metrics will likely surpass US$1 billion in 2024.6 Companies should strive to gather and report data in a granular manner at the facility, asset, or product levels so they can “prove it in the shopping cart.”

Back up sustainability disclosures with third-party assurance.

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Investors trust assured disclosures as much as their own proprietary data.7 Audited or assured disclosures provide the transparency in sustainability information that investors seek. Not only are these sources more trusted, but more experienced sustainability investors from our survey were more likely to employ audited or assured and in-house data. This suggests that as other investors gain experience, they too will increasingly rely on these data sources.

Lead with investor engagement to tell your sustainability story.

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Investor engagement provides an opportunity to address potential issues, foster transparency and accountability, and earn trust. Respondents to our survey with a minimum of two years implementing a sustainable investment policy state they are 1.5 times more likely to regularly use an active sustainability investment strategy, meaning they may vote their proxies, engage in dialogue with corporate leaders, and make shareholder proposals.8 In that kind of dialogue, trust runs both ways and can work for companies’ and investors’ mutual benefit: Anecdotal evidence shows investors respect and reward good-faith efforts at engagement and transparency, even if the short-term results have rough edges. As one observer put it, “Have an active conversation, not an annual one.”

Survive, drive, thrive

No change, however vital, happens instantly. As CFOs, finance teams, and organizations feel their way forward in meeting these demands, they are likely to progress through stages of maturity and action. Meeting extant needs can help them survive. Embarking on meaningful change can help them to drive forward. And organizations that set themselves apart through effective and innovative measures can unleash their ability to thrive. Let’s look at what may distinguish each of those stages.





Sustainability isn’t a new concern, but today’s environment is more nuanced. Amid heightened expectations—and the need to dispel misgivings about “greenwashing”—it's no longer enough just to “check the box” in a way that might have sufficed only a few years ago. Investors want more confidence, and that comes from you—in the form of sound data that’s full, coherent, audited, assured, and available. Remember that they are in the middle of the trust environment: Investors need to trust what you tell them because they need to earn the trust of their own stakeholders in turn. Your data becomes their data. Trust gained or lost travels up and down the value chain.

If sustainability were a “yes or no” question for CFOs, there would likely be little difficulty getting to “yes.” But every concern, however critical, exists among a real-world mixture of competing demands on an executive’s attention. With all the other pressures they face, some CFOs may find sustainability near the bottom of today’s to-do lists. Others may be taking a deliberate wait-and-see approach while their counterparts pressure-test the new reality. While they cede the field to first-movers, they are continuing to treat sustainability as a matter of liability management and not value creation.

But the views Deloitte’s research found among investors is real, and real-time: Our respondents aren’t in wait-and-see mode. They want trustworthy sustainability data now, which turns up the pressure on CFOs to make it a priority. CFOs who wait out the competition, or wait for regulation to clarify, may miss investor and value-creation opportunities in the near term.

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Managing Director

Deloitte & Touche LLP

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Deloitte & Touche LLP

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Deloitte & Touche LLP

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Deloitte Consulting LLP

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