In 2025, ESG reporting is set to shake things up, especially for large companies and financial institutions. The EU’s Corporate Sustainability Reporting Directive (CSRD) mandates that big firms start dishing out sustainability data for the fiscal year 2024, while financial institutions will submit annual PAI statements by mid-2025. Meanwhile, California is tightening its own disclosure laws. Buckle up—it’s a compliance whirlwind that promises accountability but brings complexity. Curious about how this affects your organization? There’s more to explore!
Upcoming ESG Reporting Changes for 2025
As 2025 approaches, a whirlwind of changes in Environmental, Social, and Governance (ESG) reporting standards is set to transform how companies present their sustainability efforts.
As 2025 nears, a storm of ESG reporting changes will redefine corporate sustainability disclosures.
The Corporate Sustainability Reporting Directive (CSRD) will require large listed companies in the EU to report their sustainability data for the financial year 2024 in 2025. Meanwhile, all large EU businesses will need to gather data for 2025, which will be reported the following year. Large EU companies must collate 2025 data for reporting in 2026, creating an additional layer of complexity for compliance. Germany is even considering tweaking reporting thresholds, which could ease the compliance burden for some companies, while a few EU nations are still lagging in integrating CSRD into their laws.
Across the pond, the Sustainable Finance Disclosure Regulation (SFDR) is making waves as it demands financial institutions disclose their annual Principal Adverse Impact (PAI) statements by June 30, 2025. Think of PAI statements as a report card that reveals how investment decisions might be flunking sustainability factors. This rule applies to all financial entities in the EU, making them accountable for their environmental mischief.
Meanwhile, California’s climate disclosure laws maintain their 2026 compliance date for 2025 data, but companies trying their best to comply without all the pieces in place won’t face penalties – at least not yet. The California Air Resources Board is expected to further clarify these rules by July 1, 2025. In Australia, large entities with consolidated revenue ≥ A$500M will also need to adapt to new ESG reporting requirements starting in 2026.
Over in Singapore, the government is aligning its sustainability reporting with the International Sustainability Standards Board (ISSB) standards, introducing a fresh set of requirements for listed companies. This wave of regulation represents a major leap in ESG reporting in Asia, reflecting a global trend towards consistency in sustainability frameworks. Companies should also be aware of the EU’s Green Claims Directive which aims to prevent misleading environmental marketing claims by requiring substantial evidence for sustainability assertions.
As these changes roll out, companies maneuvering this regulatory labyrinth will certainly face uncertainty. Firms operating internationally will need to adapt reporting systems to meet differing standards, or risk being lost in the compliance shuffle. 2025 is shaping up to be a pivotal year, and companies must be ready to juggle the evolving landscape of ESG reporting.
