Companies Urged to Act Now as Sustainability Reporting Rules Keep Evolving

A guest commentary from Sphera's principal sustainability consultant argues that companies should treat sustainability reporting as a continuous business process rather than an annual compliance exercise, even as key European and Californian regulations undergo revision. Research from Sphera shows 46% of companies acknowledge gaps in their readiness for the European Sustainability Reporting Standards, underscoring the need for early action.

The Corporate Sustainability Reporting Directive threshold is set to be lowered and a simplified set of European Sustainability Reporting Standards is forthcoming, while California's climate legislation reporting deadline approaches in January. Despite these adjustments, Sphera data shows that 53% of surveyed respondents have already stepped up efforts to manage supply chain risk through improved data. Adoption of IFRS S1 and S2 is also expanding globally, increasing mandatory climate-related disclosure obligations on companies across jurisdictions.

Many organisations still manage sustainability in fragmented silos across product, supply chain, finance, HR and investor relations teams. This fragmentation makes cohesion difficult and creates data gaps that undermine reporting quality. Sphera argues that an AI-driven, adaptive data management platform can bridge corporate, product and supply chain data, enabling companies to move beyond compliance and convert sustainability intelligence into operational insight and strategic foresight. Firms that build integrated data structures now will be better placed to refine methodologies before the next regulatory phase.

Looking ahead, companies that embed sustainability into core business processes will be positioned to anticipate market shifts and build long-term resilience. The convergence of multiple regulatory frameworks—CSRD, ESRS, IFRS S1/S2, California climate laws—is creating synergy effects that reward early adopters. The commentary concludes that proactive firms are identifying risks and opportunities before they are formalised into regulation, transforming what was once a compliance burden into a source of competitive strategic advantage.

Key figure — 46% of companies acknowledge gaps in ESRS readiness