ESG Reporting Gains Momentum Despite Eased Regulatory Pressure

The Rising Tide of ESG Reporting

After all the dust Omnibus stirred up, for a second it seemed like Europe’s corporate sustainability momentum might stall. The directive offered companies a reprieve of up to two years of delay in mandatory CSRD reporting. For a moment, we all thought this would derail progress altogether.

But PwC's recent data suggests otherwise. If anything, Omnibus only halted the inevitable. Companies are quickly rediscovering that ESG reporting is not just a compliance must, it’s a strategic driver. Data collected for frameworks such as the CSRD (Corporate Sustainability Reporting Directive) and the ISSB (International Sustainability Standards Board) is not just a compliance requirement. It is becoming an engine for smarter decision-making across strategy, risk management, supply chain transformation, and Stakeholder engagement.  

Why Are Companies Reporting Even When They Don’t Have To?

Surveys show a fascinating split: about 40% of survey respondents planning to report under the CSRD in the future say they’ll postpone statutory reporting by two years, in line with the EU’s ‘stop the clock’ directive. An equal amount say they’ll report on the original timeline, even if not legally required to do so, whether under the CSRD or an alternative framework like the ISSB or the Global Reporting Initiative.

And the opportunities are real. PwC’s research found that more than two-thirds of companies reporting under CSRD or ISSB gain moderate or significant value from the data they collect. Not just value for compliance, but insights that ripple through the entire business.

• Nearly 48% of companies say sustainability data helps them comply with other regulations.
• 38% use the insights for risk management and overall business strategy.
• A quarter link ESG reporting directly to investor engagement and communications/marketing.
• Others are leveraging it for supply chain transformation (28%) and workforce initiatives (20%).

Another Driving Force in ESG Reporting

If stakeholders were once passive observers, they’ve now become active drivers of ESG reporting. Investors in particular are upping the pressure. Globally, 54% of firms integrate ESG factors directly into their investment strategies, and in Europe that number rises to 56%. Meanwhile, ESG ratings are rated around 7 out of 10 in importance for investor communication.

That matters because investors aren’t relying on one neat source of truth. They triangulate, comparing non-financial reports with ESG ratings, data from vendors, and direct conversations with issuers. Inconsistency is no longer an option; if your story doesn’t hold across channels, investors will notice.

How Investors Define ESG Strategy

Research done by Deutsche Bank highlights the range of approaches investors take. Globally, more than half (54%) integrate ESG factors directly into their investment strategy. Another 15% prefer a “best-in-class” model, while 14% focus on sector exclusions. Just 10% admit they have no ESG strategy at all.

Europe leads the way, with 56% integrating ESG factors compared to 46% in the Americas. The direction is clear: ESG integration is becoming mainstream, but regional gaps remain.

Where do Investors Really Get Their ESG Data from?

So where do investors go for information? Globally, 27% rely on aggregated ESG ratings, 25% on bulk vendor data, 20% on direct interaction with issuers, and 19% on company non-financial reports. In other words, no single source dominates. This makes ESG reporting a credibility game, one where accuracy, transparency, and comparability matter more than ever.

What Motivates ESG Adoption for Stakeholders?

Motivations are evolving fast. Client demand is the single strongest driver, cited by 63% of respondents. Over half also point to broader societal benefit. Roughly a third believe ESG investments will outperform the market over the long term, and nearly half say they want to keep pace with market trends.  

• Over 50% highlight broader societal benefit.
• Roughly 37% believe ESG will outperform the market long-term.
• Close to 50% say they want to keep up with market trends.

This demonstrates how ESG has shifted from “nice-to-have” to market expectation, even for investors.

The Missing Link: Technology, and the right Software

When it comes to targets, the landscape is uneven. Some companies began publishing quantifiable ESG goals even prior to 2020, while others are only just formulating their first disclosures. Roughly one in five still haven’t published anything measurable.

In retrospect the players who have been publishing their ESG reports since the very beginning wish they had done many things differently including:

• Better technology/software to streamline reporting.
• Earlier confirmation of data availability and completeness.
• Greater cross-functional collaboration.

Put simply, the missing piece is software.

Without the right software, ESG reporting becomes a resource drain. However, with it, reporting becomes an integrated system for managing performance, the very thing stakeholders are asking for.

The Real Aftermath of The Omnibus

Omnibus may have shifted deadlines, but it hasn’t slowed down the forces reshaping corporate sustainability. Client demand, investor expectations, and market trends are all converging. In fact, 63% of investors cite client demand as their main reason for incorporating ESG, while over half see it as essential for society at large.

This isn’t just about compliance anymore. ESG reporting is becoming the core element of all business. The companies that lean into it now will find themselves ahead of the race. Steering their strategies, strengthening their resilience, and winning stakeholder trust. The dust is settling, and one truth is clear: ESG reporting is no longer optional, it’s inevitable.