Novisto Says the Quiet Part Out Loud: Most ESG Data Is Basically Unusable

A 2024 Deloitte survey found 57% of companies cite data quality as their top ESG challenge. That number doesn’t capture the full scale of the problem. Most corporate sustainability officers can’t reliably measure their own emissions. Investors trying to compare ESG reports across companies find inconsistent methodologies and incomplete data. And regulators demanding independently verified disclosures are discovering that many firms lack the basic infrastructure to comply. Novisto, a Montreal-based software company, is building a business by saying what few in the industry will admit: most ESG data is fundamentally broken.

The company raised $27 million in Series C funding in May 2025, bringing total capital to over $55 million, betting that corporations will pay millions to fix infrastructure problems they’ve been ignoring for years.

While competitors tout their ability to help companies showcase sustainability commitments, Novisto is betting on solving something far more unglamorous: making ESG data actually work. The thesis is simple and uncomfortable. The problem isn’t that corporations lack commitment to sustainability. It’s that the infrastructure supporting ESG reporting is held together with spreadsheets, manual processes, and what amounts to corporate duct tape.

The Data Quality Crisis Nobody Talks About

The numbers expose a credibility crisis hiding in plain sight. According to a Bloomberg study, 98% of companies face substantial difficulties integrating ESG issues into their financial reports. The Deloitte research shows 88% of firms list data quality among their top three ESG concerns. These aren’t minor technical hiccups. They represent fundamental system failures.

Charles Assaf, CEO and co-founder of Novisto, frames the issue as an execution problem rather than an integrity problem. The former enterprise software executive with over 16 years of experience scaling technology companies told reporters that forward-thinking leaders aren’t waiting for regulatory clarity but need systems that actually function.

Founded in 2019 by Assaf alongside Edouard Clement and Marian Borca, the company has raised over $55 million to date. The Series C round was led by Inovia Capital, with participation from White Star Capital, SCOR Ventures, and Sagard. Since its Series B in 2023, revenue has nearly tripled, suggesting genuine market demand for software that treats ESG data as an engineering problem rather than a communications challenge.

Why ESG Reporting Breaks Down

The ESG data problem manifests in several ways that software engineers would recognize immediately but sustainability professionals have been forced to accept as normal.

First, data lives in silos. Environmental metrics sit with operations teams. Social data exists in HR systems. Governance information lives with legal and compliance. Nobody designed these systems to talk to each other, because until recently, nobody needed them to.

Second, the actual collection process is absurdly manual. Large corporations often employ teams of people chasing down information from dozens or hundreds of different departments, across multiple countries, in various formats. One sustainability manager might be working from Excel spreadsheets while another pulls data from PDF reports. There’s no version control, no audit trail, no way to verify who changed what and when.

Third, quality assurance is nearly impossible under current systems. When data passes through multiple hands and multiple formats before reaching a final report, errors compound. Duplicates appear. Inconsistencies emerge. And because most companies lack proper data governance frameworks for ESG information, there’s no systematic way to catch these problems before they reach investors.

The regulatory pressure only makes this worse. The EU’s Corporate Sustainability Reporting Directive requires detailed disclosures that many companies simply cannot produce reliably with their current systems. The SEC’s climate disclosure rules demand independently verified emissions data. Companies are being asked to provide investment-grade information using tools designed for informal internal tracking.

The Software Solution to a Governance Problem

What Novisto offers sounds almost boring compared to the typical sustainability software pitch. There are no promises to save the planet or transform corporate culture. Instead, Novisto built what it describes as an ERP for ESG, a centralized platform where all sustainability data lives, gets processed, and becomes reportable.

The platform automates data collection across departments and geographies. It creates audit trails showing exactly who contributed what information and when. It applies quality assurance measures systematically rather than hoping someone catches errors manually. And it adapts to different reporting frameworks without requiring companies to rebuild their entire data infrastructure each time regulations change.

For clients like Sanofi, Emirates Group, Bombardier, Meta, and Moderna, this solves a problem that was actively preventing them from meeting regulatory requirements. Laurent Lhopitalier, Head of ESG at Sanofi, noted that the partnership with Novisto accelerated the pharmaceutical giant’s journey toward CSRD-aligned disclosures while establishing new standards for data governance and quality.

Novisto has also partnered with major industry players including SLB and S&P Global, giving it distribution channels into companies that might not have actively sought out ESG software but need it nonetheless. The company now employs around 120 people and has earned recognition from industry analysts Gartner and Verdantix, landing a spot in Deloitte’s 2024 Technology Fast 50 program.

The European Expansion Play

The $27 million Series C is specifically earmarked for European expansion, where Novisto plans to build a team equal in size to its North American operations. This makes strategic sense. European regulations are stricter and more detailed than their U.S. counterparts, meaning companies face more complex compliance requirements and therefore feel more pain from inadequate systems.

The timing aligns with the EU’s Omnibus proposals, which aim to streamline sustainability reporting requirements rather than add new layers. Companies that invested in proper infrastructure now have an advantage. Those still relying on manual processes are falling further behind, particularly as enforcement phases begin across multiple jurisdictions.

What Happens When Companies Don’t Fix This

The consequences of inadequate ESG infrastructure are becoming tangible. California’s SB 253 requires Scope 1 and 2 emissions disclosure starting in 2026, with Scope 3 following in 2027. The EU’s CSRD mandates comprehensive sustainability reporting with third-party assurance for thousands of companies starting in 2028. China, Hong Kong, Singapore and Japan are introducing mandatory ESG reporting aligned with International Sustainability Standards Board frameworks from 2026 onward.

Companies without reliable data systems face several risks. First, regulatory penalties for non-compliance or inaccurate disclosures. Regulators are beginning to compare sustainability claims against financial filings and investor presentations, looking for contradictions. The enforcement posture is shifting from guidance to accountability.

Second, exclusion from capital markets. As mandatory disclosure expands, investors are demanding decision-grade ESG data comparable to financial reporting. Fund managers relying on ESG metrics to guide allocation decisions can’t work with unreliable information. Companies unable to provide credible data risk losing access to sustainable finance vehicles, which represented over $1 trillion in green bond issuance projections for recent periods.

Third, supply chain exclusion. Large corporations facing mandatory Scope 3 disclosure requirements are pushing data demands down to suppliers. Being unable to provide emissions data is becoming grounds for losing contracts with major buyers who need that information for their own compliance.

Fourth, competitive disadvantage in M&A and valuation. Climate risk is repricing sectors faster than most governance cycles can adjust. Companies that can credibly embed scenario analysis into capital allocation decisions have material advantages over those still treating ESG as a communications function.

Where ESG Infrastructure Is Heading

The regulatory trajectory points toward ESG data becoming as rigorous as financial data. The EU CSRD requires limited assurance on sustainability disclosures, with regulators issuing targeted assurance standards. California and several other U.S. states are implementing verification requirements for emissions reporting. This means internal controls, documented methodologies, and audit trails that can survive regulatory scrutiny.

The technology requirements mirror financial systems. Centralized platforms that consolidate data from operational systems. Automated calculations following standardized methodologies. Integration with ERP, HRMS, procurement, and facility management systems. Version control and approval workflows equivalent to financial close processes.

The timeframe for building this infrastructure is compressing. First-wave CSRD reporters have already begun disclosing. State-level U.S. mandates activate in 2026 and 2027. Asian market requirements take effect across major economies within the next year. Companies treating this as a future project are already behind compliance timelines.

The market is responding accordingly. The global ESG reporting market is projected to grow at approximately 15% annually through 2027, driven by increasing investor scrutiny, expanding regulatory requirements, and rising data volumes. Artificial intelligence is reshaping collection and analysis capabilities, enabling automation of previously manual processes and generating predictive insights around ESG risk exposure.

What This Says About the ESG Industry

The success of Novisto reveals something important about where the sustainability movement currently stands. The aspirational phase is over. Companies no longer need to be convinced that ESG matters. They need help actually doing it competently.

This represents a maturation of the market. Early-stage sustainability initiatives could survive on good intentions and approximate data. But as ESG information becomes material to investor decisions and subject to regulatory oversight, the standards have changed. Investors want decision-grade data. Regulators want auditable information. Neither group will accept spreadsheets and manual processes as adequate infrastructure.

The companies winning in this environment are the ones treating ESG data with the same rigor they apply to financial data. That means proper systems, defined processes, clear accountability, and technology that doesn’t require heroic manual effort to function.

Assaf framed this shift in practical terms during the Series C announcement. Large companies understand that sustainability creates business value, he noted. They’re not backing away from their commitments despite some political backlash against ESG. They’re just becoming less vocal while continuing to build the infrastructure needed to compete in a world where sustainability performance matters.

The Unsexy Reality of Sustainability Software

There’s an irony in the approach Novisto has taken. While the broader sustainability industry traffics in inspiration and aspiration, this company built a business by acknowledging that most ESG initiatives fail at the implementation level. The vision might be saving the planet. The actual work is data governance, workflow automation, and quality assurance.

That’s not the story most sustainability conferences want to tell. It’s far more appealing to discuss bold net-zero commitments than to admit that many companies can’t even reliably measure their current emissions. But it’s the latter problem that the company is solving, and apparently, it’s the one companies are willing to pay millions to fix.

The market seems to agree this approach has merit. Revenue growth of nearly 3x in two years suggests genuine demand for software that treats ESG data as an engineering problem rather than a communications challenge.

As regulatory requirements tighten and investor scrutiny intensifies, the companies that figure out the infrastructure piece will have a significant advantage over those still trying to manually compile reports every quarter. The bet underlying Novisto’s expansion is that this advantage is worth substantial investment, and based on its client roster and funding rounds, many of the world’s largest corporations seem to agree.