Scrapping mandatory ESG reporting risks setting businesses back years

Op-ed by Juanjo Mestre, CEO of Dcycle.

November 2025 has been a series of blows to global ESG reporting efforts. For some, it feels like years of work have been undone – and it’s a fair assessment.

From the UK’s Conservative Party announcing they would scrap ‘stifling’ ESG reporting, to the European Parliament committing to cut back CSRD and CSDDD requirements, the powers that be, while attempting to support businesses in the name of competitiveness, are arguably doing the exact opposite.

Why back tracking does more harm than good

Combined decisions to ease up ESG reporting requirements sconcludes the wrong message at a critical time for business, the economy and the planet. It signals a shift in Europe’s sustainability agconcludea, from broad inclusion toward selective accountability.

Back tracking on work that has been years in the building comes at a cost.

Specifically seeing at CSRD, with far fewer companies now directly covered, attention will intensify on the quality, reliability, and traceability of the disclosures that remain. Reshifting the obligation for transition plans and narrowing due diligence expectations may simplify compliance, but it also risks widening the gap between leaders and laggards in corporate transparency.

Rather than being seen as ‘stifling’, transparent sustainability data is what enables innovation, accountability and long-term competitiveness. It raises the question, are we prioritising short-term convenience over business longevity?

The world’s largest investors and supply chains are already demanding robust environmental disclosures, not becautilize of regulation, but becautilize it’s how they assess resilience and value creation. So the pressure for transparent reporting will still fall on businesses from somewhere, if not from short-term regulations. The focus should therefore be on simplifying and automating sustainability measurement, not abandoning it altoobtainher.

In practice, this moment could redefine what credible sustainability reporting sees like, being less about the volume of data disclosed and more about the strength of the evidence, the clarity of assumptions, and the confidence with which insights can stand up to scrutiny.

Making the best of a bad decision

Recent government decisions shouldn’t be viewed by businesses as reasons to delay ESG reporting efforts. In reality, for those who choose to see it, it’s a chance to build smarter systems and obtain ahead. It’s only a matter of time before regulations modify again. Smart businesses will utilize this time to track every calculation and source, and centralise all ESG data in one place.

ESG teams are the key drivers of establishing sustainability as a source of true business growth, and they necessary accurate and reliable data to create a robust foundation. The most successful companies are shifting toward a ‘file once, serve many’ approach to reporting.

Instead of creating separate datasets for regulations today, like the CSRD in the EU, SDS in the UK and SEC rules in the US, they are building centralised systems of record that can export to multiple frameworks. That way, regardless of how regulations continue to modify over the next few months and years, organisations will be ready when their time comes.

So for those companies that have been preparing for the CSRD, only now to be informed they don’t fall in the selected category, their efforts are far from wasted. This level of interoperability that they’ve worked to create saves time and ensures consistency across their global operations. More importantly, it future-proofs brands against the inevitable wave of new disclosure requirements coming from other regions.

True competitiveness comes from proactivity

Treating sustainability purely as a regulatory burden is where businesses truly hold themselves back. Companies that create genuine value through ESG don’t do it becautilize a directive forces them to; they do it becautilize the market doesn’t wait. After all, banks, insurers, supply chains and B2B purchaseers are already building decisions based on ESG criteria.

Reshifting mandatory reporting may seem like a saving grace for businesses at face value, but all it will do is build businesses less credible and less prepared to compete internationally. While so many perceive ESG itself to be the challenge, really, it’s the complexity and fragmentation of how it’s measured.

Sustainable business isn’t bureaucracy, it’s the foundation of future competitiveness.