Tapping into existing tax data can reveal efficiencies and the right approach to tackling the ESG data dilemma.

In brief
  • Compliance with ESG requirements is becoming increasingly complex.
  • The information needed to appropriately respond to ESG regulations already exists within tax data.

Tax is a certainty for every business, as every transaction within a company has a tax implication that may impact the bottom line. Now, along with taxes, there’s another business certainty coming to the fore: the importance of environmental, social and governance (ESG) matters.

Corporate changes seem to quicken their pace year after year, and sustainability concerns are keeping pace — setting the pace, some would argue. The 2023 EY Tax Finance Operations Survey shows 47% of executives indicated that green or sustainability taxes will have a significant impact on the organization’s tax and finance function.¹


Given that tax rules are at the heart of many ESG regimes, it’s no surprise that ESG reporting faces a similar data dilemma.


Increasing tax and ESG data — increasing demands


With rapid advances in generative AI, the tax and ESG reporting space can expect some efficiencies from the latest technology. However, generative AI models are only as good as the underlying data sets that feed them, so as organizations look to comply with the latest ESG requirements, and the world urges transparency in reporting, we may be facing one of the greatest data challenges of our time.


Correctly addressing ESG requirements hinges on data. Having plenty of it won’t help — having the right data will. It has to be accurate and relevant to the myriad global regulations that vary, but are nevertheless present, across every sector and industry.


With information everywhere, how can you find what’s really needed?

Amid concerns and complexities surrounding ESG compliance, there’s one bright spot: most of the data you need for reporting is data you already have. And that data probably sits partly (or wholly) within your tax department.


Having that tax data in house, the question for ESG data becomes, “How do you find it and apply it?” Reusing tax data to meet ESG requirements requires the right technology and the right team.


This is a challenge that the EY and Microsoft Tax Alliance is familiar with. In fact, our experience shows that you can address this challenge by starting exactly where you are. Imagine if you had to look no further for your ESG data. We are working with Microsoft to ascertain the best way to reuse data sets from our proprietary data platforms (e.g., EY Fabric, EY Global Tax Platform and EY Mobility Pathway) across multiple regulatory reporting domains to save time and increase transparency for clients, all while confirming data stays secure and private.


Through the strategic alliance between EY and Microsoft, we are helping companies formulate a strategy to meet ESG reporting demands, as well as help them leverage their data to provide insights (past and future) to the business on how to build more sustainable, value-driven organizations.

Uncover ESG upside with an ecosystem approach

It takes a team. Most organizations find themselves needing to source multiple datasets from different technology environments. This requires an ecosystem approach to ESG data where the underlying enterprise resource planning (ERP) can interface with something like Microsoft’s Cloud for Sustainability, which leverages automation to provide near-real-time views of enterprise-wide emissions’ impact because ESG data is fed and sorted direct from your ERP systems, simplifying compliance and making reporting straightforward.

The EY team’s experience reviewing ERP data sets helps identify areas where ESG credits and incentives apply, which can mean that your ecosystem not only addresses core ESG compliance and reporting but also yields capital for the business in existing data sets.

Positioning your organization for a sustainable, data-rich future

Take a holistic approach and don’t reinvent the wheel. Approaching today’s ESG data challenges by tapping into your existing tax reporting ecosystem can make all the difference, especially if it’s based on innovative technology and ERP interoperability.

We want to solve for a healthier planet together. Your enterprise, your people and our compliance reporting platforms can help your organization contribute to a more sustainable tomorrow.


Leveraging existing tax data can effectively address ESG reporting matters while future-fitting your organization for success.

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