For many growing companies, pressure to act on ESG and sustainability reporting is rising faster than internal readiness. Regulatory expectations are becoming more structured, stakeholder scrutiny is intensifying, and customers, investors, and business partners are asking increasingly detailed questions about governance, supply chains, risk, and accountability.
Yet many companies still lack clarity on what ESG strategy and sustainability reporting actually require in practice: where to begin, what to prioritize, and how to build the internal systems needed to support credible disclosure. “ESG strategy is the foundation that gives sustainability reporting real substance,” says Melis Tarakçıoğlu. “Reporting is how a company communicates its approach and performance. Strategy is what determines what matters, where the business is exposed, what it wants to achieve, and how progress will be measured.”
Tarıkçıoğlu is a sustainability and human rights consultant with experience across ESG strategy, sustainability reporting, and human rights due diligence. She has worked at KPMG and UN Global Compact Türkiye and is currently pursuing a Master’s in Political Philosophy at Universitat Pompeu Fabra, focusing on climate justice and political ecology. For her, the gap between ESG ambition and operational reality is one of the most pressing challenges companies face today.
ESG Strategy as the Foundation for Sustainability Reporting
There is still widespread confusion about what ESG strategy actually involves. For Tarakçıoğlu, the first step is to understand that ESG strategy is not separate from business strategy. It is the internal framework that helps a company identify its most important environmental, social, and governance priorities, assess risks and opportunities, define objectives, and decide how progress will be managed over time.
Effective ESG work starts with understanding a company’s baseline. This means conducting a gap assessment, reviewing governance structures, evaluating existing policies, assessing data systems, and identifying where the business stands against sector expectations. “The key questions are straightforward,” she says. “Where are we today? What does strong practice in our sector look like? And what do we still need to build?”
From there, companies can identify material ESG risks, define measurable goals, establish KPIs, and assign ownership across teams. Reporting then builds on this structure. It covers materiality assessment, stakeholder engagement, data collection, risk analysis, and the governance frameworks needed to support credible disclosure. Without this foundation, sustainability reporting risks becoming a communications exercise rather than a reflection of how the company actually manages its impacts, risks, and responsibilities.
Building ESG Governance, Data, and Accountability Systems
The biggest challenge for many growing companies is infrastructure. ESG reporting requires companies to track information they may never have systematically gathered before, including emissions data, supplier labour conditions, pay equity, water usage, governance processes, and climate-related risks. “That data is typically scattered across HR, procurement, finance, and operations,” Tarakçıoğlu says. “In many cases, the challenge is not only the data itself, but the lack of a shared methodology for collecting, defining, reviewing, and consolidating it across departments.”
As a result, companies may publish figures they cannot fully defend or delay disclosure because the data is not ready. The deeper structural problem is that ESG is often treated as an annual reporting exercise rather than an ongoing management discipline.
“Without an operational cadence driving performance between reporting cycles, companies rarely improve in a meaningful way,” she says. This is also where the risk of greenwashing emerges. Clear ownership, leadership engagement, and internal training across departments are therefore essential from the beginning.
Aligning with Regulatory Requirements and Market Expectations
The regulatory landscape has become significantly more complex, particularly for companies connected to European markets. The EU’s Corporate Sustainability Reporting Directive introduces structured reporting under the European Sustainability Reporting Standards, including a double materiality approach. The Corporate Sustainability Due Diligence Directive requires in-scope companies to identify and address adverse human rights and environmental impacts across their chains of activities.
For companies in Türkiye, the pressure is becoming increasingly local. TSRS — Türkiye’s Sustainability Reporting Standards — is already mandatory for certain in-scope companies and requires disclosure of material sustainability-related and climate-related risks. Turkish companies with EU commercial relationships are also facing indirect pressure through supply chains, being asked by customers and partners to demonstrate that due diligence processes are in place even without a direct legal obligation. “The direction is the same across markets,” Tarakçıoğlu says. “It is moving away from voluntary narrative claims and toward structured, evidence-based, and increasingly assured reporting and due diligence.”
Preparing for ESG Risks and Long-Term Resilience
Climate disclosure expectations are expanding. “It is no longer only about publishing a report,” Tarakçıoğlu says. “Companies are increasingly expected to have reliable ESG data, credible transition planning, stronger governance, and a clear understanding of how their business model fits into a lower-carbon economy.”
Managing ESG risks is becoming central to this shift. Companies are expected to understand not only their impacts on people and the environment, but also how sustainability-related risks could affect their own operations, value chains, financing, reputation, and long-term resilience.
The companies that move early are often better positioned because they build systems before pressure intensifies. For Tarakçıoğlu, the path forward is less about producing perfect reports and more about building durable foundations that can evolve with rising expectations.
Follow Melis Tarakçıoğlu on LinkedIn for more insights on operationalizing ESG strategy, strengthening sustainability reporting, and building resilient systems to meet rising accountability expectations.
