By: Anna-Stina Reuter, Principal Sustainability Consultant at Sphera
Over the past few years, discussions surrounding sustainability reporting standards have evolved significantly. In the coming months alone, the threshold for the Corporate Sustainability Reporting Directive (CSRD) is set to be lowered, the simplified set of the European Sustainability Reporting Standards (ESRS) will be published, and the reporting deadline under California’s Climate Legislation approaches in January. Rather than signaling a scale-back on sustainability, these changes aim to make compliance more achievable and impactful across the business landscape.
These developments present an opportunity for organisations to shift towards meaningful, long-term reporting – strengthening their sustainability programmes, maturing implementation efforts and laying the groundwork for more accurate, strategic data. While recent research from Sphera revealed that 46% of companies acknowledge gaps in their readiness for the ESRS, conversations are moving beyond the question of “are we audit-ready?” towards a more forward-looking focus: creating real business value through sustainability practices. Robust reporting requirements are driving stronger sustainability actions, and those actions, in turn, are producing more meaningful reporting.
Firms should act now, not later
In the face of regulatory uncertainty, it might be tempting for companies to take a “wait and see” approach. But the reality is that regulation is not going away – only evolving. At the same time, stakeholders are ramping up expectations for transparent, accurate sustainability data. Sphera’s research revealed that 53% of respondents said they’ve already stepped-up efforts to manage supply chain risk through improved data. The adoption of IFRS S1 and IFRS S2 is already increasing globally, obligating more climate-related sustainability disclosure. Companies that act sooner gain valuable time to align internally, as well as develop more integrated and robust data structures to refine their reporting methodologies before the next phase of regulation takes effect.
Acting early also helps build internal capability. In many organisations, sustainability remains fragmented – a patchwork of efforts governed by separate teams with differing mandates, such as product, supply chain, and corporate sustainability. Beyond these, functions like investor relations, finance, HR, and R&D all require or contribute sustainability information, yet often operate in silos. These divided responsibilities create a complex environment that makes coordination and coherence difficult. The companies that are staying ahead are using this moment to integrate sustainability across functions, future-proof their business models, and demonstrate leadership to investors, customers, and regulators.
Embedding reporting into business processes
As sustainability frameworks transition from voluntary to mandatory, regulatory requirements and corporate sustainability programmes are beginning to influence one another in deeper, more structured ways. Synergy effects between different regulatory frameworks are also emerging, as overlapping standards and aligned objectives reinforce one another and drive greater coherence across jurisdictions. For sustainability initiatives to inform each other effectively, data from diverse sources must connect seamlessly. Supply chain information, product-level sustainability metrics, and corporate KPIs, covering both current performance and forward-looking indicators, need to flow together to enable forecasting and scenario analysis.
An AI-driven, adaptive data management platform can provide this capability – linking corporate, product, and supply chain data. By doing so, companies can monitor initiatives across functions, decarbonise supply chains, enable environmental production, and drive more informed decision-making across sustainability domains. This enables organisations to embed sustainability intelligence into the business itself – turning compliance data into operational insight and strategic foresight.
The companies best prepared for what lies ahead are those treating sustainability reporting as an ongoing process rather than a once-a-year compliance exercise. This shift requires consistent data collection, shared ownership, and alignment across systems and teams. When effectively embedded into core business processes, sustainability reporting becomes a powerful tool – driving operational efficiency, improving decision-making, and fostering accountability across the organisation.
Turning integrated sustainability into a strategic advantage
The companies that will lead in this new regulatory era are those treating sustainability data as a tool for foresight. Rather than waiting for reporting requirements to decide what gets measured, proactive firms are identifying the risks and opportunities before they’re formalised into regulation. This approach enables them to stay ahead of emerging disclosure requirements while shaping internal strategies around long-term sustainability goals.
By taking control of their sustainability data now, companies can transform what has been a compliance exercise into a source of strategic advantage. Those that embed integrated data into core decision-making will be better equipped to anticipate market shifts and build resilience in an ever-changing environment where sustainability performance increasingly impacts business success.
While sustainability frameworks continue to evolve, the underlying direction is clear. Businesses that act now to strengthen their reporting capabilities and integrate sustainability into core processes will be the ones best placed to succeed.
