If your sustainability work is just compliance, you are cooked
Staying relevant in a world of simplified reporting
A few weeks ago, I wrote a piece of therapy for sustainability professionals, telling you to “keep it material to maintain the momentum.” If you took my advice or are undertaking it, great! On the other hand, if you are heads down in your ESG spreadsheets and reporting only, your time might be up.
Read on carefully.
WHY IT MATTERS: Regulatory compliance is today's primary driving force behind sustainability efforts. If you haven’t built a business use case beyond compliance, your efforts and your company are at risk.
The sustainability office has grown and strayed
Let’s go through a little history, shall we? Sustainability offices had driven business value and impact prior to the rise of regulations. In 2014, the Weinreb Group’s CSO report reported that there were five focus areas for CSOs:
Collective benefits for stakeholders
Innovation
Stakeholder signaling (communications)
Access across the business
Orchestrating and engaging those teams across the business
Dang! Who wouldn’t want to be working in sustainability in 2014?
Just over ten years later, their updated 2025 CSO report proclaims, “Regulation is the dominant force directing corporate sustainability strategy.”
This shift is reflected in our 2025 survey results, with nearly 90% of CSOs saying they are spending more time on regulatory compliance today than they did two years ago, and three quarters listing regulatory requirements as the most prominent development sustainability at their company.
🤦♂️Good lord.
I’ve observed this trend firsthand when talking with CSOs.
Some CSOs have left their corporate posts and struck out independently because their company made them carbon accountants.
I rarely hear a plan or focus on progress when I press about the work to improve the metrics over time.
I have seen blank stares when asking about climate risk, which is often overlooked.
For some time, we have led with compliance as the priority.
So, if compliance is the most crucial task, what happens to your job when THE big compliance framework is simplified?
The EU Commission is set to publish its simplification of CSRD and CSDDD on February 26th. Posts on LinkedIn speculate it might align with the simpler ISSB S1 and S2 frameworks.
Soon, this might be you (taken from Office Space):
Wipes brow nervously: Well, I take the activity data from operations and others, calculate it to emissions, and then hand it over to legal for a review.
I get it. This is a gross oversimplification of the work done, but I predict management teams will ask this question soon as business outcomes are absent. As you look around at the DEI shifts and political pressures on sustainability progress, folding simplified compliance into an existing compliance role makes sense because many haven’t shown their value.
The governance model that some companies are leading with today is: Let’s comply. Outcomes, reputation risk, and transition progress be damned.
If the mere suggestion of this question worries you, you might be in a sustainability bubble and need to break out because your job and the company are at risk. Don’t believe me? The Wangari Digest released Finance Execs Are Eating Sustainability Professionals for Breakfast a few hours before this post.
Let’s be clear on what the regulations are
Compliance is necessary and table stakes, but it isn’t where you provide value as a domain expert.
Last Friday, a CSO and I discussed business value amidst these DEI pullbacks and restatements. He asked me why companies are so confused about the intersection of ESG topics and business value.
At this point, my answer shouldn’t surprise you. While we discussed the lack of a consistent definition, which is why I wrote ESG Mindset, I believe the regulations played a big part.
ICYMI: The regulations were created to provide comparable data to financial markets for investing and lending decisions.
The new rules will ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues.
Sustainability factors are becoming a mainstream part of investment decision-making. There are increasing calls for companies to provide high-quality, globally comparable information on sustainability-related risks and opportunities, as indicated by feedback from many consultations with market participants.
Don’t lament the simplification of CSRD, as the value of the data is meant for someone else, largely investors! 👀
However, you can and must use ESG data to determine its value to your company.
KEY POINT: Every company must understand its intersection with ESG topics; data collection and analysis are key.
Remember, a regulatory framework designed to do one thing isn’t going to get your company to do another.
SOX was meant to reduce fraud, not make companies more ethical.
GDPR protects citizens' privacy but doesn’t empower companies to operate technology responsibly.
And if you think that domain expertise will keep you safe, even in a simplified scheme, it won’t. I worked on SOX from a technology controls perspective for years. Lawyers picked up what they needed to pretty quickly.
Who could have predicted that regulations would ultimately consume the attention of the sustainability office, putting them in a very precarious position as things get simplified?
ESG must get back to get back to business
As I’ve written before, companies won’t stop working programs. ‘Working’ in this case means ‘providing business value.’ Companies might stop supporting sustainability offices where compliance is the only thing they do.
Start with a clear definition of ESG.
The material Environmental, Social, and Governance risks that affect a company and opportunities that drive toward long-term value and sustainable growth.
Next, lead with assumptions and the potential use cases to get moving. If you have examples of how these use cases have worked successfully in the past, all the better.
There’s no shortage of advice on what to do from here. For example, you could go through the Weinreb Group’s 2014 focus areas and turn them into steps:
Start with identifying your existing access across the business, leveraging the influence of others.
Identify collective benefits and outcomes for stakeholders with assumptions to build a use case, making sure to keep an eye on the business context and materiality.
I can’t stress the two points above enough. Break out of your sustainability bubble and bring your data and knowledge to protect and improve the business.
Orchestrate and engage related teams from across the business to the use case.
Innovate and test the outcome.
Communicate the outcomes to stakeholders.
This thread flows through to the Weinreb Group’s 2025 report, which correctly proclaims:
“Sustainability must deliver business value.”
Look, I have read many CSR reports and have seen material ESG innovation. Still, I look at others and can tell the company isn’t getting it. I attend conferences packed with people looking to better understand the regulations but not engage in the work. If I see these things, investors and other stakeholders do, too.
Compliance without action is performative. We are chasing metrics, rather than outcomes, and there is even a more considerable risk. Your company leaders may be intentionally focusing you on compliance alone as it allows the company to sidestep the difficult work.
KEY INSIGHT: The EU views this simplification exercise as a chance to build competitiveness, and you and your business should, too.
If the sustainability office has become a compliance function and the regulation becomes so easy that legal or accounting can take over, you are cooked.
Show your value. Now is the time.
