Environmental Information as a Public Utility

This preprint argues that current ESG and CSRD sustainability governance is structurally inefficient because it relies on decentralized, document-heavy compliance. Thousands of firms independently reproduce similar data collection, auditing, and reporting processes, which creates duplicated costs, fragmented datasets, and high administrative overhead. As a result, a growing share of resources is absorbed by compliance itself rather than by real environmental improvements. The paper reframes sustainability reporting as a system-level resource allocation problem. Compliance is treated as a measurable system cost that competes with actual decarbonization and transition investments. When reporting, assurance, and validation are duplicated across firms, regulatory “entropy” increases and net environmental outcomes deteriorate, even if formal rules become stricter. To address this, the paper proposes a structural shift toward an Environmental Information Utility model, also described as “Regulatory-as-a-Service.” In this model, the regulator (or a delegated public institution) operates a shared information infrastructure that produces standardized, validated, machine-readable environmental indices. Firms provide only minimal incremental inputs, while reusable outputs are distributed through stable APIs. Two core indices are introduced. The Environmental Load Index represents a fact-based environmental footprint aligned with lifecycle assessment principles. The Improvement Potential Index represents the feasible reduction potential under known technologies and constraints. These indices are designed to be directly consumable by financial systems, procurement platforms, and consumer tools. By centralizing the label and index layer, the system reduces transaction costs, improves comparability, limits rating divergence and greenwashing, and enables continuous, AI-driven decision-making. Quantitative illustrations show that as duplicated compliance overhead declines, net environmental gain increases mechanically, even under uncertainty. The paper also outlines a practical implementation architecture, governance safeguards, and a concrete pilot roadmap. It argues that treating environmental information as a digital public utility aligns sustainability regulation with how modern markets, algorithms, and institutions actually operate, shifting the focus from paperwork compliance to measurable environmental impact.