Sustainability reporting as a catalyst for strategic growth

The European Commission’s recent omnibus proposals offer companies some breathing room in the demanding landscape of sustainability reporting. By postponing key obligations under the CSRD, EU Taxonomy, and CSDDD and adjusting the scope for certain organisations, the regulatory roadmap has been recalibrated. While core reporting obligations remain in place and assurance will continue to be an important factor, this development creates a timely opportunity: companies now have the leeway and flexibility to enhance their sustainability performance and improve data quality.

Rather than viewing sustainability reporting as a compliance obligation, organisations can use it as a strategic lever for performance and growth. They can invest in the governance structures, data systems, and risk management frameworks that underpin credible disclosures. This shift is not just about meeting today’s obligations – it’s about preparing for tomorrow’s expectations from regulators, markets, and society. It’s a chance to move beyond compliance and focus on building the foundations for resilient, future-ready business models.

From regulation to expectation: the new accountability

Even with regulatory timelines extended, companies continue to face rising expectations from a wide range of stakeholders. Clients increasingly seek alignment with CSRD principles. Investors and financial institutions factor sustainability performance into capital allocation and financing decisions, often rewarding transparent and credible disclosures with better terms. At the same time, strong sustainability credentials are becoming a key differentiator in attracting and retaining talent in competitive labour markets – particularly among younger generations who value purpose-driven employers and environmentally responsible products.

Furthermore, boards are increasingly held accountable for how they manage climate, social, and supply chain risks. In this context, sustainability is no longer a peripheral concern – it has become a core business issue with reputational, legal, and financial implications. A recent Swiss ESG litigation report underscores this development, highlighting the growing legal exposure faced by companies and their boards. Potential liabilities under Swiss civil, criminal, and administrative law may arise from environmental harm, human rights violations, and governance failures. To mitigate these risks, companies need robust corporate governance, transparent sustainability reporting, and proactive risk management strategies – not just to meet compliance requirements, but to manage broader legal and operational exposure. The message is clear: responsible leadership requires addressing sustainability-related risks with the same discipline as any other strategic or financial risk.

Sustainability meets enterprise risk management

When it comes to climate risks, companies must assess how both physical and transition-related impacts could affect their operations, supply chains, and asset base in order to protect their business model. For example, climate-related events such as the flooding of a production site can disrupt logistics and supply chains, potentially triggering cascading effects across value creation processes with concrete financial consequences. As climate risks intensify, insurance premiums for certain physical assets may rise substantially – or such assets may become even uninsurable – forcing companies to consider relocating factories or restructuring production footprints.

Scenario analyses can help anticipate risks, assess possible outcomes, and evaluate response options before disruptions occur. Understanding exposure to physical climate risks enables companies to adapt operations early and avoid potentially severe losses. Similarly, monitoring carbon pricing, emission profiles, and dependencies on critical raw materials as well as identifying which materials are viable in a low-carbon future can prompt timely adjustments in product design or sourcing strategies – strengthening both resilience and long-term competitiveness.

From risk mitigation to business innovation

Moving beyond risk mitigation, companies that integrate sustainability into strategy can uncover new areas for growth by rethinking their offerings and closing the loop – transforming their product portfolios towards more sustainable and circular models. This is not only an environmental imperative – it is monetarily relevant. Sustainability integration enables organisations to explore new markets, develop future-fit business models, and differentiate through purpose-driven value propositions. Rather than reacting to pressure, they proactively shape their role in a resource-constrained economy.

This shift requires strong leadership. Boards and executive teams must ensure that sustainability topics are not treated as parallel processes, but fully embedded in strategic planning, performance management, and enterprise-wide decision-making. As scrutiny around accountability intensifies, governance quality becomes a clear differentiator. Companies need to be able to demonstrate both awareness and action.