The Challenges of ESG and the Role of Compliance (GDPR and ESG) in Modern Management: Best Practices and Lessons Learnt

Source abstract

Abstract Environmental, social, and governance (ESG) frameworks have become strategic imperatives for organizations operating in a context of digital transformation, regulatory complexity, and heightened stakeholder expectations. This chapter examines the challenges of ESG adoption and the role of compliance—especially General Data Protection Regulation (GDPR)—as a key governance enabler shaping managerial decision-making. It explains how sustainability responsibilities, ethical governance, and data protection requirements increasingly interact, creating both synergies and operational dilemmas, particularly when ESG reporting demands extensive monitoring while GDPR requires data minimization, lawful processing, and accountability. Drawing on current managerial practices and European experience, this chapter highlights how integrated governance architectures can align ESG objectives with robust data governance, strengthening transparency, auditability, stakeholder trust, and organizational resilience. Illustrative cases from the European energy and corporate sectors show how proactive integration of data protection into governance structures supports credible ESG performance, while failures in data governance can create legal, reputational, and sustainability risks. This chapter concludes with actionable best practices, including board-level oversight, privacy-by-design in ESG data systems, third-party controls, and the use of anonymization and aggregation in reporting. Overall, this chapter positions GDPR not as a constraint on ESG ambition but as a framework that strengthens the governance pillar of ESG and supports sustainable value creation in data-driven environments.