From regulatory requirement to strategic lever: sustainable reporting evolves.

The European Union is currently facing a complex challenge with regard to sustainability reporting, which is gaining in importance in a global context, where social and environmental responsibility is becoming a priority for companies and institutions. The EU's intention is to find a balance between the growing demand for transparency on sustainability and the need to reduce the reporting burden on companies, as initially envisaged by the Corporate Sustainability Reporting Directive (CSRD).

In a scenario where sustainability becomes a determining factor for long-term success, companies must be prepared to meet the challenges and seize the opportunities. The increasing attention by consumers, investors and institutions on responsible business practices requires companies to strategically integrate sustainability. Regardless of the constraints imposed by specific regulatory obligations, adopting a sustainable approach becomes crucial not only for strengthening corporate image and reputation, but also for successfully addressing market challenges and effectively responding to the growing expectations of a business landscape being increasingly oriented to social and environmental issues. 

As part of the European initiatives to simplify and harmonise corporate sustainability reporting, a process has been launched to revise the European Sustainability Reporting Standards (ESRS), i.e. the standards that concerned companies are required to adopt to ensure clear, consistent and comparable reporting of non-financial information. To this end, the European Commission has mandated the European Financial Reporting Advisory Group (EFRAG) to propose a simplified version of the standards by 31 October 2025. Currently, the ESRS include a considerable number of mandatory datapoints (around 1,200), which require a highly detailed disclosure. However, as part of the ongoing review, the Commission intends to significantly reduce the number of datapoints, in order to simplify the structure of the standards without compromising their informative effectiveness. In particular, the aim is to: 

• place more emphasis on quantitative data, which are considered more comparable and objective than qualitative data;
• clarify the distinction between mandatory and voluntary requirements, so as to provide companies with clearer guidance on what is essential to report.
• lighten the administrative burden on companies, while maintaining a high level of transparency and accountability.

Double materiality will continue to be a key element for companies that want to integrate sustainability into their strategy. This approach considers two aspects: on the one hand, how environmental, social and governance (ESG) factors can influence a company's financial performance (financial materiality); on the other hand, how corporate actions can affect the environment and society (impact materiality). In this way, companies can obtain a clearer view of their sustainability-related impacts, risks and opportunities (so-called IROs), which is reflected in various aspects of corporate management:

• integrated risk management: by identifying and assessing both financial and ESG risks, companies can develop more resilient and sustainable strategies;
• creation of shared value: this approach fosters innovation and improved relations with stakeholders, contributing to long-term competitive advantage;
• facilitated access to finance: companies with sound ESG practices can attract sustainable investments and enjoy a positive valuation by financial markets;
• improved transparency and reputation: clear and comprehensive reporting enhances the trust of investors, customers and other stakeholders, improving corporate image.

It is therefore clear how much strategic it is for companies to prepare themselves for future developments in the European regulatory framework and the growing expectations of stakeholders by starting a voluntary sustainability integration process at an early stage. This means starting to develop and consolidate internal procedures and monitoring tools to effectively collect, manage and communicate the most relevant ESG information.

This approach allows not only to anticipate future regulatory obligations, but also to build stronger and more transparent governance over time, improve stakeholder relations and enhance market competitiveness.