Erik Saito, senior vice president, global strategic advisory at Workiva.
For too long, businesses have made unsubstantiated claims about their environmental, social and governance (ESG) initiatives. Now, stakeholders are demanding that accountability and transparency accompany ambitious climate commitments. So much so, that regulations such as the Corporate Sustainability Reporting Directive (CSRD) have been introduced to standardise and regulate ESG information in a similar way to financial data.
Consequently, business leaders are facing mounting pressures to manage sustainability, risk, finance and compliance information to give stakeholders a holistic understanding of companies’ performance and environmental impact. However, those that have successfully bridged the gap between these pillars are finding that integrating their reporting builds stakeholder trust and, ultimately, drives business growth.
The role of regulation in new ESG reporting
With stakeholders insisting on more openness about the environmental impacts of companies’ operations, ESG data has taken centre stage. It is now viewed as having the same importance as financial data when measuring a business’ performance.
Where previously, ESG metrics were a ‘nice to have’ or were merely seen as a tick-box exercise, they are now viewed as a strategic imperative. In fact, in a recent report, 76 percent[i] of respondents stated that effectively communicating their organisation’s sustainable value story is critical for investor relations and liquidity.
The increased prevalence of ESG information has called for new reporting methods – and regulatory frameworks are evolving to support new expectations. Recent regulatory updates, such as the CSRD, underscore a collective commitment to establish integrated reporting as the new standard.
These reporting directives mandate the integration of sustainability information within annual financial reports. Through legislative transposition, they aim to foster greater transparency and encourage organisations to align their operations with sustainable development goals. However, many companies have found wider benefits beyond mere compliance.
In a study of global professionals involved in ESG reporting, 81 percent[ii] of organisations that were not subject to the CSRD, still indicated plans to comply. Similarly, 93 percent[iii] of institutional investors said they would be more likely to invest in companies with integrated financial and non-financial reporting, with 97 percentiii stating that integrated financial and sustainability data helps identify performance gaps that enhance financial growth opportunities. This echoes the demand for greater transparency on ESG data throughout markets, as well as the value these insights provide to stakeholders.
Driving business performance sustainably
In 2025, expanded frameworks for carbon accounting, emissions reductions, and supply chain transparency are expected to evolve further. As ESG regulations evolve by the day, companies that are on top of their ESG data will be the most resilient and agile when new regulations are introduced – or when existing ones are altered. Additionally, adopting adaptive compliance techniques will give organisations a competitive edge in a green economy that is becoming more and more reliant on agility and foresight.
This was echoed within Workiva’s recent Benchmark Survey of 1,600 global leaders: 97 percentiii of executives say sustainability reporting will be a business advantage within two years, whilst 96 percentiii of investors agree it strengthens financial performance.
As the perspectives of finance executives across the globe evolve to further embrace sustainability as a profitability driver, ESG initiatives can deliver both environmental and financial benefits. Consequently, organisations can make more environmentally friendly decisions whilst significantly improving operational efficiency and cutting down costs.
Adapting to the road ahead
Nevertheless, whilst many organisations are seeing the benefits of collecting and reporting on ESG data, many have experienced challenges with preparing and presenting their insights. Despite high confidence in their preparedness, numerous organisations lack the necessary technology and operational processes to meet the necessary standards.
For example, amid efforts to adapt to an ever-evolving landscape, 74 percent[iv] of organisations identified overlapping standards and regulations as their primary concern. Additionally, 57 percent[v] of decision-makers reported difficulties in collecting and reporting reliable ESG and sustainability data, as many rely on manual tools and workflows for cross-functional reporting.
Tackling these issues is essential for transforming ESG objectives into tangible, measurable outcomes that enhance stakeholder trust—a key motivator for compliance among corporate leaders worldwide. Increasingly, leaders will need to prioritise investing in technology that helps streamline data collection, analysis, and reporting processes. Over time, the comprehensive data collected across an organisation’s operations will become valuable, enhancing visibility and supporting strategic decision-making.
The future of ESG reporting
As stakeholder expectations evolve, businesses will face increasing pressure to provide detailed ESG reports – regardless of regulatory compliance or political shifts. Integrating advanced technologies will be critical in meeting these demands, enabling organisations to embrace sustainable practices effectively.
Overall, ESG data is no longer a supplementary aspect of corporate reporting – it is becoming a fundamental cornerstone of it to increase transparency. Regardless of regulations, discerning leaders are seeing value past compliance demonstrated by 85 percent of executivesiii planning to forward with climate disclosures, regardless of political shifts.
Ultimately, this is a time of opportunity and difficulty for organisations. Those that integrate financial strategy with ESG activities will gain a competitive edge and satisfy regulatory requirements, while those that don’t run the danger of slipping behind.
[i] https://www.workiva.com/sites/workiva/files/pdfs/thought-leadership/accelerate-value-creation-with-assured-integrated-reporting-forrester-consulting-study-en.pdf
[ii] https://www.workiva.com/uk/resources/2024-esg-survey
[iii] https://www.workiva.com/resources/2025-executive-benchmark-integrated-reporting
[v] https://www.workiva.com/sites/workiva/files/pdfs/thought-leadership/accelerate-value-creation-with-assured-integrated-reporting-forrester-consulting-study-en.pdf
