Data is emerging as pivotal for enabling sustainability transformations, where multiple, diverse stakeholders come together in large-scale initiatives. However, while data is critical, these initiatives often struggle due to uncertainty, diverging interests, unclear ownership, fragmented data, and shifting sustainability goals. Recent work has identified data diplomacy as a viable governance practice for resolving issues around data ownership, access, and control, when diverse actors are involved. We explore the potential of data diplomacy for overcoming barriers to sustainability transformation. Drawing on a longitudinal study of four multi-actor initiatives driving sustainability transformation in the agri-food industry, we illustrate how actors rely on data diplomacy to overcome barriers. Our findings show how data diplomacy builds trust, align interests, formalize agreements, harmonize data, and enable flexible governance arrangements. The paper demonstrates the potential of data diplomacy for overcoming data-related barriers in sustainability transformations with implications for dynamic approaches to data governance.