Foreword from the Expert Team:
In the course of supporting hundreds of Vietnamese businesses in building ESG reporting systems, our consulting team – Carbon Credit Viet Nam Joint Stock Company – has witnessed a worrying reality: the majority of businesses still manage ESG data manually in Excel, lack control processes, and have no audit trail.
This not only creates serious risks of error but also leaves businesses vulnerable to accusations of “Greenwashing” – a practice being prosecuted ever more aggressively worldwide. In 2023-2025, regulators imposed penalties on a series of major corporations, with fines reaching up to USD 55.9 million (the Vale case) and USD 27 million (the DWS case).
This article has been compiled based on our practical experience, combined with official guidance from COSO, the GHG Protocol, the SEC and the EU CSRD. The objective is to help your business clearly understand how to collect ESG data to proper standards, digitize processes, and build internal controls to avoid costly mistakes.
Current state: 57% of businesses face ESG data quality issues
An EY survey found that 55% of public companies still store ESG data in Excel. Only 9% of businesses use comprehensive ESG management software (Deloitte, 2024; EY, 2024; Diligent/OCEG, 2023).
These challenges highlight why businesses need to digitize ESG data and strengthen data management processes. Add Your Heading Text Here
The five main data quality challenges
| Challenge | Description | Real-world example |
|---|---|---|
Accuracy | Calculation errors, inconsistent methodologies, risk of manipulation | Vale falsified dam safety certifications → 270 deaths |
Completeness | Missing data, especially Scope 3 from the supply chain | Scope 3 often accounts for 80%+ of total emissions but is rarely reported |
Consistency | Different methodologies across departments | HR, Operations and Finance define metrics differently |
Timeliness | Annual collection fails to meet frequent reporting requirements | CSRD requires annual reporting with tight deadlines |
Verifiability | Data lacks an audit trail and cannot be audited | DWS fined €25 million for “documentation and control deficiencies” |
Source: Compiled from Deloitte (2024), SEC (2023), BaFin (2025)
What is Greenwashing? Definition and legal risks
Greenwashing is defined by the SEC as “conveying false information to exaggerate environmental or sustainability practices”. EU research shows that 53% of green claims are vague, misleading or unsubstantiated (European Commission, 2024; SEC, 2023).
Common forms of Greenwashing
Notable Greenwashing enforcement cases
Global regulators have stepped up greenwashing enforcement with record fines:
Falsified dam safety certifications (2023)
Exaggerated ESG integration (2023-2025)
Lack of written ESG policies (2022)
Misleading recyclability claims (2023-2024)
“Ethical” fund invested contrary to commitments (2024)
Source: SEC (2022-2023), BaFin (2025), ASIC (2024), Pensions & Investments (2025)
Types of ESG data and collection sourcesTypes of ESG data and collection sources
ESG data comes from many different sources and departments. A clear understanding of the origin and characteristics of each data type is the first step toward building a controlled collection system (GRI, 2021; GHG Protocol, 2004).
Data quality hierarchy under the GHG Protocol
The GHG Protocol establishes a priority order for data sources: Primary data (direct measurement) > Supplier data > Industry-average data > EEIO data (spend × factor). Businesses should maximize primary data and minimize estimates (GHG Protocol, 2004; 2011).
Digitizing ESG data: From Excel to management systems
The ESG software market reached USD 1.92-2.62 billion in 2024 and is projected to grow to USD 5.54-7.56 billion by 2033 (CAGR 12.5-18.2%). Cloud-based solutions account for 65-70% of market share (Roots Analysis, 2025; Industry Research, 2025). Businesses can digitize ESG data by moving from spreadsheets to integrated management systems. This improves traceability, consistency, and reporting efficiency.
Các nền tảng phần mềm ESG hàng đầu
Source: Verdantix (2024), Contrary Research (2024), Arbor (2026)
Automated data collection technologies
Real-time monitoring of energy, water and emissions, eliminating manual data entry
Real-time monitoring of energy, water and emissions, eliminating manual data entry
Real-time monitoring of energy, water and emissions, eliminating manual data entry
Real-time monitoring of energy, water and emissions, eliminating manual data entry
Source: SEC (2022-2023), BaFin (2025), ASIC (2024), Pensions & Investments (2025)
Internal control over ESG data under COSO
Technology alone is not enough to digitize ESG data effectively. Strong internal controls are also essential to maintain reliable and verifiable information. COSO issued the guidance “Achieving Effective Internal Control Over Sustainability Reporting” (ICSR) in March 2023, applying the 5 traditional internal control components to sustainability reporting. This is regarded as the benchmark for the “SOXification of ESG” (COSO, 2023; Deloitte, 2023).
The five components of ESG internal control
| COSO component | Application to ESG data |
|---|---|
1. Control environment | Leadership commitment, a culture of transparency, ESG governance structure with clear roles |
2. Risk assessment | Identifying risks of data errors, unreliable data sources, greenwashing exposure |
3. Control activities 3. Control activities | Segregation of duties, multi-level approvals, data reconciliation, logic checks Segregation of duties, multi-level approvals, data reconciliation, logic checks |
4. Information & Communication | Documentation of methodologies, metric definitions, emission factor sources |
5. Monitoring | Periodic internal reviews, independent audits, continuous improvement Periodic internal reviews, independent audits, continuous improvement |
ESG data control process
- Segregation of duties: Data collector ≠ Verifier ≠ Reporter
- Approval workflow: Department head → ESG team → Legal → Executive Board → Board of Directors/Committee
- Documentation: Retain source documents, calculation methods, factors used, methodology changes
- Reconciliation: Compare ESG data with financial data (energy costs vs. consumption), analyze variances of 5-10%
- Error correction: Materiality threshold for restatement, correction process within 30 days
Legal requirements for ESG data quality
| Regulation | Data quality requirements | Penalties for violations |
|---|---|---|
| EU CSRD | Limited assurance mandatory from 2025; Reasonable assurance possible from 2028 | €30,000 + 2 years’ imprisonment (France); Exclusion from public tenders |
| EU Green Claims Directive | Bans “carbon neutral” claims based solely on offsets; Requires verified evidence | Up to 4% of global turnover |
| UK FCA Anti-Greenwashing Rule | ESG claims must be “fair, clear, not misleading” with evidence | Up to 10% of global turnover (UK CMA) |
| ISSB IFRS S1/S2 | Compliance with the GHG Protocol for Scope 1,2,3; Disclosure of uncertainty | 36 countries have adopted/are adopting (>50% of global GDP) |
Vietnam Circular 96/2020 | Disclosure of GHG, energy, labor and community data based on GRI principles | Applies to public companies, listed organizations, securities companies |
Source: European Commission (2024), FCA (2024), IFRS Foundation (2024), Vietnam Ministry of Finance (2020)
ConclusionConclusionConclusion
Businesses need to digitize ESG data as sustainability reporting requirements become more demanding. Reliable data systems also help reduce errors, strengthen internal controls, and limit greenwashing risks.
Recent enforcement cases show increasing regulatory scrutiny of unsupported sustainability claims. Businesses therefore need reliable data, clear methodologies, and verifiable evidence to support their ESG disclosures.
To ensure compliance and avoid greenwashing risks, businesses need to:
A message from the ESG Expert Team – Carbon Credit Viet Nam Joint Stock Company
Throughout our journey supporting Vietnamese businesses in building ESG reporting systems, we have realized that the problem is not a lack of data but a lack of control processes. Many businesses have complete electricity, water and fuel invoices, but they are stored in scattered locations, no one is responsible for consolidation, and no one performs cross-checks.
Our advice: Don’t wait until an audit or an international partner demands it before starting to digitize. The investment cost of ESG software ($5,000-50,000 USD/year for SMEs) is far lower than a greenwashing scandal, which can cause millions of dollars in reputational and legal damage.
If your business needs support in setting up an ESG data collection system, assessing greenwashing risks, or preparing for assurance – our team of experts is ready to accompany you from the initial status assessment through to implementation and training.
Reference List
ASIC (2024) ‘Greenwashing: A view from the regulator’, Australian Securities and Investments Commission. Available at: https://asic.gov.au/
Bộ Tài chính (2020) Thông tư 96/2020/TT-BTC hướng dẫn công bố thông tin trên thị trường chứng khoán. Hà Nội: Bộ Tài chính.
COSO (2023) Achieving Effective Internal Control Over Sustainability Reporting (ICSR). Committee of Sponsoring Organizations of the Treadway Commission.
Deloitte (2023) ‘Using the COSO Framework to Establish ICSR’, DART – Deloitte Accounting Research Tool. Available at: https://dart.deloitte.com/
Deloitte (2024) Sustainability Action Report 2024. Deloitte Global.
Diligent/OCEG (2023) ESG Data Management Survey. Diligent Corporation.
European Commission (2024) Directive 2024/825 on Green Claims (Greenwashing Directive). Brussels: Official Journal of the European Union.
EY (2024) ‘How internal controls lay the foundation for ESG reporting’, EY Insights. Available at: https://www.ey.com/
FCA (2024) Anti-Greenwashing Rule ESG 4.3.1R. London: Financial Conduct Authority.
GHG Protocol (2004) A Corporate Accounting and Reporting Standard. Revised Edition. Washington, DC: WRI and WBCSD.
GHG Protocol (2011) Corporate Value Chain (Scope 3) Standard. Washington, DC: WRI and WBCSD.
GRI (2021) GRI 1: Foundation 2021. Amsterdam: Global Reporting Initiative.
Industry Research (2025) ‘ESG Software Market Size & Share 2034’, Industry Research Reports. Available at: https://industryresearch.biz/
Pensions & Investments (2025) ‘DWS Group settles greenwashing investigation with $27 million fine’, Pensions & Investments. Available at: https://pionline.com/
Roots Analysis (2025) ESG Reporting Software Market Insights & Trends 2025-2035. Roots Analysis.
SEC (2022) ‘BNY Mellon Investment Adviser Settlement’, SEC Press Release. Washington, DC: U.S. Securities and Exchange Commission.
SEC (2023) ‘Vale S.A. Settlement – ESG Task Force First Enforcement Action’, SEC Press Release. Washington, DC: U.S. Securities and Exchange Commission.
Verdantix (2024) Green Quadrant: ESG Reporting and Data Management Software. Verdantix Ltd.
Disclaimer:
This article has been compiled for the purpose of providing general guidance and information and does not constitute legal or professional advice. Legal regulations may be updated. Businesses should consult experts before implementation.
© 2025 Carbon Credit Viet Nam Joint Stock Company. All rights reserved.