Almost daily I receive emails from startups wanting to sell me an ESG reporting platform. All of them can ensure compliance to all European regulations and provide nice and user-friendly dashboards. Starting an ESG reporting tech company is a textbook example of finding opportunities by looking at emerging needs that can be met through technology. Given the high number of comprehensive regulations introduced by the EU, it is an obvious match.

When I receive these emails or LinkedIn messages, I always reply and ask for details on how they will collect supply chain data in China. And that ends the conversation.

It is relatively easy to build a system that automatically read electricity bills (in a European language) and calculates scope 2 emissions for a few locations in Europe. Headcount numbers, flight and hotel data likewise. Scope 3 emissions from your manufacturing plant in China is a different story, not to mention from 200 suppliers in a complex chain.
To complicate further, to be CSRD-compliant you need to reduce the emissions. Annual data will not be sufficient to keep you updated through the year, so if manufacturing in China is an important part of your emissions, you need to look at more frequent reporting of data.

The good thing is that there are many ESG reporting platforms also in China. Many have been developed exactly with the manufacturing and supply chain issues in mind, including with real time monitoring of electricity use and sources (as many plants have PV panels on the roof and the grid is quickly turning green, real time site data is important). Chinese startups have definitely seen the same needs as those in Europe and the US, however most of them do not have an English website (or a website at all, since a WeChat official account might be sufficient in China).

It is impossible for ESG tech companies in Europe or the US to gather quality data from China supply chains. Two fundamental reasons are that systems should be in Chinese language and hosted on local servers. But it is fully possible to collaborate with local partners to ensure compliance and ESG performance improvement.