Sustainability questions from customers: How to turn it into a strategic advantage

Quality, price and delivery time have long been at the heart of business decision-making. This playing field is fundamentally shifting. Sustainability has become a crucial fourth pillar, and ESG (Environmental, Social & Governance) plays an increasingly important role in it.

Large organizations no longer look only at their own impact, but actively involve their entire value chain. The reason is business-related: the environmental and social impact is often significantly greater in the supplier chain than within their own organization. As a result, more and more companies are receiving questionnaires about their carbon emissions, working conditions and ethical behavior.

From directive to obligation

The focus on supply chain responsibility has a solid foundation. In 2011, the United Nations adopted the Guiding Principles on Business and Human Rights, followed by the OECD guidelines in 2012. These made it clear that abuses in the supply chain are also the responsibility of all companies operating in that chain.

The textile industry illustrates this. Behind fast fashion often lies a harsh reality: forced labor, poor working conditions and heavy environmental pollution. According to international guidelines, major brands bear responsibility for addressing these abuses throughout the chain.

For years, the criticism was that these guidelines were non-binding. Therefore, Europe created laws such as the CSRD (Corporate Sustainability Reporting Directive) and the CSDD (Corporate Sustainability Due Diligence Directive). The CSRD requires large companies to report on their ESG performance. The CSDDD goes further: organizations must actively conduct due diligence to prevent and address wrongdoing.

Although the EU delayed implementation in 2025 and significantly narrowed the scope (to companies with more than 1,000 employees and €450 million in turnover), the underlying trend remains unchanged: transparency on ESG performance is expected regardless of legislation.

Opportunities and risks of transparency

Providing ESG data offers tangible benefits. NYU Stern research shows that 58% of studies found a positive relationship between ESG performance and financial results, while only 8% showed a negative association. The benefits are measurable:

• Insight and improvement. ESG data provides concrete insights to improve sustainability performance. Organizations with an active sustainability strategy outperform their peers financially over the long term.
• Stronger customer relationships. Reliably providing ESG data strengthens collaboration and demonstrates that your organization is helping clients achieve their sustainability ambitions.
• Competitive advantage. When your ESG data is superior to competitors, sustainability becomes a unique selling point alongside quality, price and delivery time.
• Attract and retain talent. Research by PwC shows that employees’ willingness to stay increases dramatically when employers improve their ESG policies. Other research shows that 64% of people would not accept a job with an organization without strong ESG values.

At the same time, risks exist. Weak performance becomes more visible, it requires investment in systems to provide validated data, and often suppliers in the chain are not yet prepared to provide quality information.

Four strategic options

Not every organization needs to take the same approach. The choice depends on the level of ESG data you want to achieve and the extent to which you anticipate future developments.

Strategy 1: Compliance

Meeting ESG data requests from legislation, without further investment. This is the starting point for organizations with relatively low ESG risks. It is sufficient to maintain the “license to operate.

Strategy 2: Risk management

ESG risks are identified, evaluated and managed in a structured manner. This strategy helps prevent reputational damage, increase supply chain control and be prepared for future regulation. This suits organizations that want to integrate ESG risks into existing risk management processes.

Strategy 3: Business case

Collecting and analyzing extensive ESG data creates valuable insights. A manufacturing company that analyzes its energy consumption may discover that energy consumption can be reduced by 20% by investing in energy-saving technologies. This leads to lower operating costs as well as improved ESG ratings. This strategy suits organizations that want to use sustainability as a competitive advantage.

Strategy 4: Positioning as a sustainable company

Organizations that brand themselves as sustainable must have their ESG data fully in order. Transparency about ESG performance strengthens the brand image and makes you more attractive to customers, partners and investors. In doing so, the most credible organizations are also open about aspects that need improvement.

ESG questions: a governance issue

Determining the right ESG data strategy is not an operational decision you can delegate. It is a fundamental governance issue that belongs at the board level. After all, the choice determines investments, risk profile and market position of the organization.

The CSDDD makes this explicit by linking liability and penalties to due diligence. Organizations that look away from wrongdoing or inadequately identify risks will be held liable with fines proportional to global turnover. In addition, companies can be excluded from tenders.

This requires clear responsibilities: who is responsible for ESG data? How is this secured in systems and processes? And how is progress reported to the board? These questions require structural attention at the highest level.

Getting started with sustainability questions

Most organizations go through a natural progression through various strategies. Concrete steps to begin:

• Define your ambition. Where do you want to be in two to three years? What role does sustainability play in your business strategy?
• Start with materiality. Focus on what is actually relevant to your sector, stakeholders and business model.
• Build up systematically. Start with the most crucial ESG data (e.g. CO2 emissions scope 1 and 2) and gradually expand to more complex aspects.
• Provide reliable data. Invest in systems and processes that provide validated ESG data.
• Make it measurable. Formulate SMART goals: specific, measurable, acceptable, realistic and time-bound.

In conclusion

Besides quality, price and delivery time, ESG has become a decisive factor in business relationships. The EU has entrenched this responsibility with legislation such as the CSRD and CSDD, although the exact scope and timing are still evolving.

A strategic choice lies ahead for organizations: minimum compliance, active risk management, leveraging business cases, or full positioning on sustainability. Organizations that use ESG data strategically improve their sustainability performance, financial results, and competitive position.

The question is no longer whether to respond to ESG data questions, but how to strategically use it to future-proof your organization. Looking away is not an option. How you deal with it determines your position in the market.