Organizations face a widening tension between harnessing data for innovation and complying with increasingly stringent sovereignty rules. This article introduces the Data Sovereignty Assessment Framework, a practical tool that translates this tension into five evaluative dimensions: (1) legal and regulatory compliance, (2) data ownership and control, (3) localization and infrastructure sovereignty, (4) consent, rights, and ethics, and (5) data sharing and ecosystem alignment. We demonstrate its utility using a workshop-based self-assessment at EnergyOrg, a large Swedish energy firm, which reveals a conservative, compliance-strong posture with weaker outward-facing capabilities. The Framework supports managerial diagnosis, targeted improvement, and balanced governance by revealing trade-offs between constraint and capability and shows how sovereignty capabilities can enable digital innovation. Although rooted in European regulatory principles, the Framework’s logic can inform organizations worldwide that seek to balance compliance with data-driven innovation under varying jurisdictions. We argue that treating sovereignty as a strategic enabler rather than a barrier can unlock trustworthy, data-rich innovation. Implications include governance roadmaps, risk-aware data sharing, and compliance-by-design artificial intelligence (AI) at scale.