The Future of ESG Reporting: Key 2025 Trends 

As we look towards 2025, the landscape of Environmental, Social, and Governance (ESG) reporting is set to undergo significant transformations. I was recently reading the 2024 Sustainability Action Report by Deloitte and thought it highlighted many of the emerging trends we’re seeing, as well as spotlighted the growing importance of social value in the world of ESG. Here’s my take.

About the survey

Deloitte surveyed 300 executives, including senior finance, accounting, sustainability, and legal executives, at publicly owned companies with revenue of at least $500 million, and across a broad range of sectors including consumer products, financial services, life sciences and health care, oil & gas, and technology, media, & telecommunications 

Four key takeaways: 

1. Increased ESG investment

Companies are ramping up their investments in ESG initiatives. This trend is driven by growing stakeholder demand for transparency and accountability in corporate practices. More than three-quarters of respondents said that they have created new roles and responsibilities to prepare for increased ESG regulatory or disclosure requirements. 

2. Regulatory pressure

Governments and regulatory bodies are tightening ESG disclosure requirements, making it imperative for businesses to comply with new standards. The report found that virtually all – 99% – of companies are preparing for increasing disclosure requirements, following the release of a series of new regulatory sustainability reporting mandates and standards, including the EU’s CSRD and the IFRS’s ISSB standards here in Europe as well as California’s new climate reporting laws, and the SEC’s climate disclosure rule in the US. 

3. Stakeholder influence

Investors, customers, and employees are increasingly prioritising ESG factors in their decision-making processes, pushing companies to integrate these considerations into their core strategies. Greater efficiencies, lower risk, and enhanced trust with stakeholders were recognised by more than half (51%) of survey respondents as the top three internal business benefits companies expect to see by investing in sustainability reporting. 

4. Technological Advancements

74% of public companies are planning to invest in sustainability reporting technology and tools over the next year to make the collection, analysis and reporting of ESG data more efficient and accurate.  

Interestingly, we’re seeing those companies who took a “wait and see approach” to ESG reporting are now lagging. 52% of companies with a cross-functional ESG group are preparing extensively versus just 24% of companies without one are.

Those who took early action are reporting significant progress and may already be realising some of the internal and external benefits that can result from a deeper understanding and measurement of environmental, social, and governance (ESG) risks and impacts.

Technology is essential to help resolve the ESG data challenge 

Investors and institutions will increasingly leverage data intelligence to evaluate ESG investments, measure ESG impact and make investment decisions. The task is daunting, often a data creation challenge rather than a data collecting challenge. Most executives (81%) also report challenges related to documentation in their top three challenges, including important control steps such as review, sign-off, and certification of ESG data—key processes and internal controls that are typically well established in financial reporting but generally less established in sustainability reporting.  

And not having strict standardised criteria for what constitutes an ESG investment doesn’t help. Based on the survey results, it appears that many respondents are using more than one standard or framework for ESG disclosures, with ISSB/Sustainability Accounting Standards Board (SASB) (54%), GRI (50%), and TCFD (49%) leading the way. 

What you can do to plan ahead

Impact reporting platforms like ours can help with data management while aligning to different framework guidances so companies with large pools of data can analyse performance and other metrics more easily. With more data at play, there is more scope for fund managers to understand, manage and influence the ESG performance of their portfolio and ultimately report on it. We’re seeing more and more companies take a proactive approach to data management to ensure they are not left behind.

The role of social value reporting 

While environmental and governance aspects have traditionally dominated ESG discussions, the social component (thankfully) is gaining traction. Social value reporting focuses on the impact of business activities on society, encompassing areas such as community engagement, employee well-being, diversity and inclusion, and philanthropy. 

Here’s why social value reporting will be crucial in 2025: 

• Holistic impact measurement: Companies will need to provide a comprehensive view of their impact, beyond financial performance. Social value reporting enables businesses to capture the broader effects of their actions on society. 
• Managing stakeholder expectations: As stakeholders become more discerning, they will expect more detailed insights into a company’s social contributions. Transparent social value reporting will be key to building trust and credibility. 
• New competitive advantage: Businesses that effectively communicate their social impact will stand out in a crowded market. Demonstrating a commitment to social value can enhance brand reputation and attract purpose-driven customers and employees. 
• Regulatory compliance: With increasing regulatory scrutiny on social issues, robust social value reporting will help companies stay ahead of compliance requirements and avoid potential penalties. 

How Impact Reporting can help 

At Impact Reporting, we understand the evolving needs of businesses in the ESG landscape. Our platform is designed to help organizations measure, analyse, and report their ESG with ease and accuracy. 

• Connect all the dots: Our tool consolidates all your data in one place, offering a complete picture of your social impact and sustainability initiatives.  
• Embrace framework flexibility: Compatible with any international reporting framework, our platform adapts to your unique needs and any set of standards you desire that is available today – and in the future. 
• Access without limits: Employees, clients, and suppliers can all contribute to and access your ESG data seamlessly. 
• Outcomes not outputs: Facts and figures are great, but we focus on meaningful outcomes rather than superficial metrics, helping you understand and improve your ESG contributions holistically.  

Looking ahead 

As we approach 2025, the importance of ESG reporting cannot be overstated. Businesses that prioritise and transparently communicate their impact will be better positioned to meet stakeholder expectations, comply with regulations, and achieve sustainable success. 

Impact Reporting is committed to supporting your journey towards comprehensive social value measurement. Together, let’s embrace the future of ESG reporting and make a real difference for our planet and its people. 

Schedule a demo today or contact our team at 0161 532 4752 to learn more about how we can help you measure your social good.