ESG Data-as-a-Service (DaaS) A game-changer for resource-constrained SMEs

1. ESG data gaps for SMEs: A major barrier to green transformation

SMEs account for over 90% of global businesses and serve as the backbone of the economy by contributing significantly to growth and job creation. However, as Environmental, Social, and Governance (ESG) factors become critical criteria for success and competitiveness, SMEs face numerous challenges in integrating and reporting ESG.

These pressures arise from both external demands and internal limitations. On one hand, SMEs face increasing pressure from global supply chains, export markets, and green financing requirements, as large corporations progressively embed ESG criteria into their procurement processes, demanding detailed data from suppliers. However, data related to Scope 3 emissions often depend on multiple parties within the value chain, over which SMEs usually have limited control.

Simultaneously, evolving international regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and recommendations from the International Sustainability Standards Board (ISSB) impose increasingly complex ESG disclosure requirements. This creates significant compliance pressure on SMEs, which typically lack dedicated ESG teams like large corporations. The absence of a unified global ESG standard further complicates SMEs’ adaptation, as they must navigate varying regional regulations.

At the same time, demand for green financing from investors, regulators, and consumers continues to grow, requiring transparent ESG data disclosure. Financial institutions, particularly green capital providers, view ESG data shortages as a major barrier to funding.

Top 5 challenges SMEs face in implementing environmental measures (Source: Internet)

Faced with these pressures, investing in ESG data capabilities is gradually becoming not a choice but a prerequisite for survival and competitiveness - especially for manufacturing, exporting companies, and businesses aiming for green transformation to enhance brand value.

2. ESG DaaS - A fully outsourced ESG data model

In response to the urgent need for effective ESG management, ESG Data-as-a-Service (ESG DaaS) is emerging as a comprehensive solution tailored for SMEs. Beyond simply providing data, ESG DaaS acts as an outsourced “technology arm” that enables small and medium enterprises to achieve ESG measurement and reporting capabilities comparable to large corporations without requiring substantial internal resource investment.

2.1. Definition: What is ESG Data as a Service (ESG DaaS)?

ESG Data-as-a-Service (ESG DaaS) applies the Data-as-a-Service (DaaS) model to the Environmental, Social, and Governance domain. Essentially, DaaS is a cloud-based data management strategy that treats data as a strategic business asset, enhancing flexibility, scalability, and operational efficiency.

Similar to other “as-a-service” models (such as Software-as-a-Service, SaaS), DaaS offers on-demand access to vast data repositories, enabling valuable information distribution across the organization to support data-driven decision-making.

At its core, DaaS provides data integration from multiple sources via Application Programming Interfaces (APIs), often consolidated and standardized using technologies like data virtualization. This allows businesses to quickly access curated, reusable datasets, supports self-service analytics, and significantly reduces data retrieval time.

API and data-as-a-service (DaaS) management architecture (Source: Internet)

When applied to the ESG domain, the ESG DaaS model delivers standardized, integrated, and cloud-hosted datasets covering Environmental, Social, and Governance dimensions. This eliminates the need for on-premises infrastructure investments while enabling instant access to ESG indicators - including historical data, with high availability.

These datasets can be seamlessly integrated into internal systems, analytical models, or customized reporting tools, thereby enhancing the organization’s ability to measure, report, and make ESG-related decisions with greater agility and efficiency.

2.2. ESG DaaS: How it empowers SMEs to measure ESG like large enterprises

ESG DaaS addresses this challenge head-on by delivering ESG capabilities as a flexible outsourced service. Built on cloud infrastructure, ESG DaaS eliminates the need for on-site hardware and operates on a pay-as-you-go model, transforming upfront capital expenditure (CapEx) into more manageable operating expenses (OpEx) a perfect fit for SMEs with limited budgets.

A few pioneering platforms showcase the clear potential of this model:

• Eevery: Eevery offers ESG assessment tools aligned with international frameworks such as the SDGs, GRI, CSRD, and EU Taxonomy. This enables SMEs to quickly identify their position in the ESG journey while leveraging built-in expertise to comply with complex standards without a dedicated in-house team. Eevery also provides actionable steps, helping companies not only measure but also improve and effectively communicate their sustainability progress.

• WAP Sustainability: WAP Sustainability takes it a step further with a comprehensive managed services model. WAP supports SMEs with technically demanding tasks such as greenhouse gas inventories, product life cycle assessments, and data management, as well as preparing compliance reports for global ESG requirements. This approach not only reduces staffing costs and saves time but also ensures compliance accuracy, while providing SMEs with long-term partnership and support from ESG experts.

  Eevery ESG performance management dashboard (Source: Internet)

Overall, ESG DaaS addresses two core challenges for SMEs:
🔹 Limited financial resources - by converting upfront CapEx investments into a flexible OpEx model with pay-as-you-go pricing.
🔹 Lack of dedicated ESG teams - by embedding standardized data, international frameworks, and built-in ESG expertise directly into the platform.

As a result, SMEs can not only report ESG performance in line with international standards, but also actively improve sustainability outcomes and strengthen their competitive position in the global value chain.

However, implementing ESG DaaS also comes with potential risks that must be identified early. Some “one-size-fits-all” platforms may fail to capture the unique ESG factors of individual businesses, leading to compliance-focused reports that lack strategic depth. Vendor lock-in can also pose challenges when switching providers or integrating with other systems - particularly if data is locked within proprietary technology or subject to high extraction fees. Finally, businesses must pay close attention to data security and privacy, ensuring that providers comply with relevant data protection regulations and maintain robust security protocols.

3. ESG DaaS operating model for SMEs: From sensors to transparent reporting

3.1 Collecting ESG data via sensors and IoT

 In an ESG DaaS model, IoT devices and sensors serve as the backbone of automated environmental data collection.

• Energy and temperature sensors: installed in refrigeration units, HVAC systems, boilers, data center racks, manufacturing equipment, and transport vehicles.
• Remote or unmanned locations: such as pumping stations, remote substations, or warehouses.
• RFID, Bluetooth beacons, and GPS sensors: attached to conveyor belts or packaging lines.

These devices provide real-time data, reducing manual workloads, minimizing errors, and ensuring accuracy  a critical factor in building transparent ESG reports.

They can track metrics such as energy consumption, water usage, waste management, and emissions, providing strong support for two key pillars of ESG: Environment and Governance.

Raw data from IoT systems in small and medium-sized enterprises (SMEs) is collected and transmitted through multiple technology layers, starting with devices such as temperature sensors, motion detectors, smart meters, and cameras. These devices capture information like temperature, vibration, and other key metrics, and may perform basic preprocessing before transmitting the data.

Data transmission between these devices can leverage protocols such as Wi-Fi, Bluetooth Low Energy (BLE), Zigbee (enabling communication between different devices within the same network), LoRaWAN (for long-range data transmission), or cellular networks - depending on factors like coverage range, use case requirements, power consumption, bandwidth, and cost.

The data then passes through processing layers such as gateways, where it can be refined to reduce latency and optimize bandwidth usage. After this stage, the data is sent to cloud platforms like AWS IoT (Amazon’s IoT service) or Azure IoT Hub (Microsoft’s IoT service) for storage and analysis. These platforms offer device management, security, and integration with other enterprise systems.

Once stored, businesses can leverage analytics tools to turn raw data into actionable insights. Interactive dashboards and machine learning models enable real-time analysis, generating visual reports and instant alerts for managers.

Crucially, with seamless integration into enterprise systems such as CRM, customer support platforms, spreadsheets, or messaging apps, IoT-triggered events can automatically create tasks, send alerts, or update internal data in real time - keeping operations synchronized and responsive.

IoT applications in ESG reporting (Source: Internet)

Today, affordable IoT sensors not only help collect data but also empower SMEs to take a more proactive approach to ESG implementation. With the ability to continuously capture environmental data at a reasonable cost, SMEs can embark on their ESG journey without facing significant financial barriers. This automation not only ensures accurate reporting but also enables quick risk detection and timely intervention to reduce pollution and optimize operations.

3.2 ESG Data management and processing on a DaaS platform

Once raw data is collected from sensors and other sources, the next step in the ESG DaaS model is to manage and process it on a cloud - based platform. This is a critical stage that transforms fragmented datasets into  valuable insight, helping businesses make strategic decisions and assess ESG performance.

Integrating all ESG indicators into a single database not only enhances accessibility and consistency but also allows companies to analyze and share information anytime, anywhere. As a result, businesses can maintain a holistic view of their ESG activities, regardless of the number of users or applications involved.

Data quality is essential to ensuring ESG reports are reliable and auditable. Modern ESG DaaS platforms provide tools to standardize data collection processes, minimize discrepancies, and establish internal controls similar to those in financial reporting. Regular audits help verify data accuracy and completeness, while ensuring long-term consistency and traceability.

Data quality monitoring system (Source: Internet)

In addition to ensuring data quality, ESG DaaS platforms also automate the process of handling and integrating data from multiple sources. AI and Machine Learning technologies are applied to minimize processing time and reduce risks associated with manual workflows.

Data can come from IoT sensors, internal records such as electricity and water bills, HR policies, audit reports, supplier documentation, or supply chain information. These inputs can be extracted and transformed into high-quality ESG reports through platforms like Karomia’s VSME.

In addition, ESG DaaS platforms leverage publicly available data from sources such as Eurostat, national meteorological databases, and NASA to monitor environmental factors, including sea-level changes.

For many SMEs, ESG data is often scattered across spreadsheets, emails, or, in some cases, not tracked at all—resulting in errors and low reliability. ESG DaaS addresses this challenge by consolidating and standardizing data from various sources, ensuring consistency and quality. The result is a single source of truth with auditable data that reduces the risk of greenwashing and eliminates “shadow data.”

With ESG DaaS, SMEs can strengthen trust with investors, customers, and stakeholders while building a solid foundation for making transparent, data-driven decisions. In this way, raw data becomes a strategic asset, enabling sustainable business growth.

3.3 Data analysis and transformation into actionable insights

Once ESG data has been collected, standardized, and centralized on an ESG DaaS platform, the next step is to transform raw data into valuable insights. This is a critical stage that allows SMEs to fully understand their sustainability performance and make informed decisions.

ESG DaaS platforms offer advanced analytics tools and customizable dashboards that visualize ESG data in real time. This allows stakeholders to quickly grasp key indicators. Using Machine Learning (ML) and Artificial Intelligence (AI), the system can detect trends, identify inefficiencies, and recommend improvement measures - generating truly actionable insights.

Data analysis helps SMEs pinpoint potential issues across all three ESG dimensions: environmental, social, and governance. Examples include high emission levels, inefficient resource usage, or high employee turnover in specific departments. Based on these insights, SMEs can take corrective actions such as adjusting operating hours to save energy or investing in energy-efficient equipment.

A key feature of ESG DaaS platforms is benchmarking, enabling SMEs to compare their ESG performance against internal targets or industry standards. This helps identify strengths and weaknesses in ESG strategies. Furthermore, by integrating Double Materiality Assessment, businesses can focus on the ESG issues that matter most—both in terms of external impact and financial relevance.

ESG Data collection: sources - quality - applications (Source: Internet)

Some key ESG KPIs that SMEs can track include:

Environment: GHG emissions (Scope 1, 2, and 3), energy consumption, waste generation, recycling rate, and water usage.
Social: Workforce diversity, occupational health and safety, working conditions in the supply chain, human rights protection, and community engagement.
Governance: Board structure, compensation policies, anti-corruption measures, ESG risk management, and tax transparency.

A major strength of ESG data analysis within the DaaS model is its ability to be directly integrated into an SME’s business strategy. The system not only automates data collection but also identifies inefficiencies, risks, and offers improvement recommendations. As a result, SMEs can make operational adjustments such as optimizing energy use, managing waste, and improving working conditions thereby reducing risks, enhancing efficiency, and driving innovation.

3.4 Transparent and compliant ESG reporting

The final stage in the ESG DaaS operating model is transforming actionable insights into transparent, compliant ESG reports ensuring they are both auditable and trustworthy.

An effective ESG report must align with clear standards. For SMEs, a common choice is VSME (Voluntary Standard for SMEs), a simplified sustainability standard designed for non-listed companies.

This standard consists of two parts: the Basic section, tailored for micro-enterprises or businesses just starting their reporting journey, and the Comprehensive section, aimed at medium-sized companies or those partnering with banks and large corporations.

Illustration of defining organizational and operational boundaries under the VSME Standard (Source: Internet)

Beyond VSME, SMEs participating in global supply chains or seeking international funding will often need to adopt global reporting frameworks such as GRI, SASB, TCFD, and ISSB. ESG DaaS platforms can automatically convert existing data into report formats aligned with these standards, enabling businesses to meet diverse stakeholder requirements with ease.

One of the greatest advantages of ESG DaaS is fully automating the reporting process. Instead of spending weeks or even months on manual compilation, the system can generate a complete, standardized report in just a few hours. Built-in consistency checks and integrated data approval workflows help minimize errors, ensuring that businesses have audit-ready data capable of meeting the stringent requirements of banks, investors, and regulators.

With ESG regulations evolving rapidly worldwide, companies must stay up to date to avoid compliance risks. ESG DaaS solutions typically include multi-factor authentication, encrypted data transmission, and protection against cyberattacks to safeguard sensitive information.

By adopting ESG DaaS, SMEs can shift their perspective on ESG reporting from a costly obligation to a compliance proof with tangible business value. Transparent reporting empowers businesses to:

• Stay prepared for new regulations
• Reduce legal risks and protect their reputatio
• Clearly communicate their sustainability commitments

When done right, ESG reporting becomes a strategic asset helping SMEs expand partnerships, build market trust, and strengthen their position in the sustainable business ecosystem.

4. International practices: Leading enterprises in the DaaS ESG sector

The Data as a Service (DaaS) market is experiencing rapid growth, projected to reach USD 61.93 billion by 2030, with a CAGR of 20% from 2025 to 2030 [48]. Notably, small and medium-sized enterprises (SMEs) are expected to be the fastest adopters, with a CAGR of 23.9% by 2030.

This growth is primarily driven by the rising adoption of the pay-as-you-go model, which removes the barrier of high upfront investment costs a long-standing challenge for SMEs accessing data services. Already, 72% of SMEs use data for decision-making, and 18% are leveraging Generative AI tools, indicating increasingly sophisticated data utilization.

Market providers are becoming more diverse in functionality and expertise. A prime example is Persefoni, a SaaS-based carbon accounting platform powered by AI, capable of measuring Scope 1, 2, and 3 emissions and delivering GHG emissions reports compliant with various international climate regulations.

Persefoni stands out with its “Persefoni Copilot” feature a GPT-style conversational interface for carbon accounting and an anomaly detection capability for large datasets. Its primary clients are major financial institutions, but it also offers a free version for small businesses within its investment portfolio. The platform has been widely adopted by leading financial organizations such as Apollo Global Management, TPG, Bain Capital, and L Catterton.

Persefoni software Source: Internet)

Meanwhile, Sweep focuses on sustainable data management for enterprises and financial institutions with complex supply chains. The platform uses AI to collect and monitor real-time emissions data, while ensuring compliance with major ESG regulations such as CSRD and SFDR.

Taking a more comprehensive approach, Atlas Metrics has become an “all-in-one” ESG platform trusted by over 2,500 banks, companies, and investors. It supports full-spectrum ESG management, including CSRD compliance, double materiality assessments, and carbon footprint tracking. With AI-powered automated reporting, Atlas Metrics allows companies to enter data once and reuse it across multiple types of reports, while also integrating third-party reports.

This solution has helped companies streamline ESG compliance processes, strengthen sustainable governance capabilities, support banks in meeting ESG requirements end-to-end, and simplify SFDR compliance for asset managers. Currently, Atlas Metrics is building a global ESG data infrastructure that enables companies to collect, report, and share all types of ESG data in a unified and efficient way.

Atlas metrics data collection and analysis results (Source: Internet)

KEY ESG also stands out with a flexible ESG management platform that allows companies to customize indicators, automatically collect data via API or CSV, and generate compliance reports for multiple regulatory frameworks such as CSRD, IFRS, SFDR, and the EU Taxonomy.

This diversity reflects the maturity of the ESG DaaS market, moving beyond one-size-fits-all solutions. Each provider pursues its own niche strength, Persefoni specializes in carbon accounting for the financial sector, Sweep optimizes supply chain visibility, and Atlas Metrics offers comprehensive solutions for SMEs. For businesses, the takeaway is clear: rather than looking for a single “fits-all” product, it’s essential to choose a solution aligned with your industry, material ESG issues, and strategic objectives.

5. Lessons, adaptation, and strategic implications for Vietnamese businesses

Vietnamese companies particularly SMEs are under mounting pressure from global partners in export supply chains and FDI networks to meet ESG standards. Yet, a significant proportion still lack the necessary expertise (60%) and dedicated ESG leadership teams (38%). This gap underscores the urgent need for capacity building, strategic ESG planning, and the adoption of data-driven tools to stay competitive in an increasingly sustainability-focused global market.

Barriers preventing organizations from committing to ESG in Vietnam (Source: Internet)

In this context, ESG Data-as-a-Service (DaaS ESG) is emerging as a direct solution to bridge the “gap between awareness and action,” enabling companies to turn sustainability intentions into concrete steps. With automation, AI integration, and streamlined data management, DaaS ESG platforms help SMEs overcome resource constraints and accelerate ESG adoption.

Global best practices show that businesses should not attempt to “do everything at once,” but rather start with the most material ESG factors - those directly tied to core operations and stakeholder priorities. DaaS ESG can help identify and track these priority areas, while also reducing the risk of superficial greenwashing through transparent, standardized, and auditable reporting.

Alongside technology, supportive policies and financial incentives play a crucial role. Governments and financial institutions are simplifying sustainability reporting requirements and expanding access to cost-effective digital tools. In Vietnam, the government has introduced interest rate subsidies for green initiatives, developed a national green taxonomy, and committed to net-zero by 2050 all within the context of an estimated USD 2.4 trillion climate technology investment need by 2050.

These conditions create a strong foundation for enterprises to adopt DaaS ESG, while also opening significant opportunities for local startups to design solutions tailored to sector-specific needs, industry contexts, and domestic regulations.

For resource-constrained SMEs, a key strategic shift is moving from a “build everything in-house” mindset to a “rent the right solution” approach. The DaaS ESG model exemplifies this strategy giving SMEs access to advanced ESG technology and expertise via flexible, scalable, and cost-efficient subscription models. This frees up internal resources to focus on core business activities while maintaining competitiveness, attracting investment, and meeting rising stakeholder expectations.

Given the combined forces of growing ESG demand, robust policy support, and the strategic direction toward a green economy, DaaS ESG is not just a commercial tool to optimize ESG implementation. It is a strategic enabler of localized innovation within Vietnam’s climate tech ecosystem  contributing to resilience, long-term profitability, and stronger positioning in the sustainable global economy.