The anticipated wave of corporate sustainability reporting requirements in 2025 has been met with delays and uncertainties, leaving businesses in a state of limbo. The future of regulations like the Corporate Sustainability Reporting Directive (CSRD) in Europe, climate disclosure requirements in the U.S., the potential Omnibus Simplification Package, and the European Deforestation Regulation (EUDR) remains unclear. This ambiguity frustrates businesses that have spent years preparing for compliance, creating a sense of “hurry-up-and-wait.” However, this period of uncertainty also presents an opportunity: a chance to reassess, refine, and solidify internal structures and strategies for sustainability reporting. Instead of scrambling to meet impending deadlines, companies can use this time to build robust systems and processes that will facilitate future compliance.
Despite the delays, the direction of travel is clear: sustainability reporting is inevitable. Even companies seemingly prepared for the initial 2025 deadlines often lacked fully streamlined internal reporting structures and standardized processes. The biggest challenge isn’t necessarily the evolving regulatory landscape, but rather internal coordination. Many companies still grapple with fragmented data management, where different aspects of ESG data reside in various departments – environmental health and safety, human resources, finance, legal, procurement, and more – under the purview of different stakeholders. This lack of centralized data management hinders efficient reporting and consistent improvement. This pause allows businesses to address these internal challenges, develop clear roles and responsibilities, and establish standardized metrics for data collection and reporting.
The current regulatory limbo provides a crucial window for businesses to address the internal hurdles to effective sustainability reporting. A common issue within multinational corporations is the difficulty of accessing and consolidating the necessary data for reporting across numerous regulatory regimes. Information related to environmental, social, and governance (ESG) factors is often dispersed across various departments, hindering the ability to generate a comprehensive overview. For instance, environmental data like water management and emissions might fall under the Environmental Health and Safety team, while diversity, equity, and inclusion data resides with Human Resources. Harmonizing these disparate data streams under a common reporting framework requires meticulous planning, coordination, and buy-in from various stakeholders. This interim period offers a valuable opportunity to build the necessary internal infrastructure for data collection, management, and reporting, thereby easing the future burden of compliance.
Despite the delays and ambiguities surrounding specific regulations, existing standards and pending legislation provide a valuable blueprint for action. The International Sustainability Standards Board (ISSB) standards, for instance, are already impacting reporting practices in certain jurisdictions, requiring alignment with climate disclosure standards. The European Financial Reporting Advisory Group (EFRAG)’s guidance documents on European Sustainability Reporting Standards (ESRS) further illuminate the granular detail expected in future reports. These resources, although not definitive, offer a practical framework for companies to begin building internal systems and processes that will facilitate compliance once the final regulations are in place. This proactive approach allows businesses to anticipate future requirements, minimizing the need for reactive scrambling once the rules are finalized.
The current reprieve from hard deadlines should be viewed as a strategic opportunity, not a cause for complacency. Companies should utilize this time to develop a comprehensive “corporate sustainability playbook.” This involves mapping existing data sources, establishing clear lines of responsibility, and creating standardized metrics for data collection and reporting. It also requires identifying and training key personnel to manage the reporting process. While the specific details of forthcoming regulations may evolve, the fundamental principles of transparency, accountability, and comprehensive ESG reporting remain constant. Companies that invest in building robust internal systems and processes during this period of uncertainty will be better positioned to adapt and comply efficiently when the final regulations are implemented.
Focusing on the uncertainty surrounding future regulations is a distraction from the core task at hand: preparing for the inevitable shift towards mandatory sustainability reporting. Significant reporting requirements are already in place, and more are undoubtedly on the horizon. Businesses that seize this current pause to strengthen their internal reporting infrastructure, streamline data management, and develop clear processes will be significantly advantaged when the final regulations take effect. A proactive, rather than reactive, approach to sustainability reporting will not only ensure compliance but also contribute to a more sustainable and resilient business model in the long run. This period of uncertainty, therefore, presents a valuable opportunity to build a strong foundation for future success in the evolving landscape of ESG reporting.
