ESG Updates: An ESG Year in Review for Listed Corporates in 2025

Key Takeaways

• CSRD and ESRS were simplified and delayed through the Omnibus package, but mandatory, assured sustainability reporting remains on track for 2026–2029, with Wave 1 entities already publishing their first reports.
• ISSB and IFRS Sustainability Standards transitioned from conceptual frameworks to live, regulated climate and sustainability disclosures across multiple markets including Hong Kong, the UK, and Türkiye during 2025.
• ESG ratings and benchmarks such as MSCI, Sustainalytics, ISS, CDP and EcoVadis came under sharper regulatory scrutiny in the EU and UK, fundamentally changing how corporates manage ratings governance.
• Climate and nature reporting frameworks (TCFD, TNFD, GRI, SASB, CDP) matured rapidly in 2025, with data quality, alignment across global frameworks, and independent assurance becoming more important than sheer volume of disclosure.
• Companies that had already invested in centralised ESG data models and robust reporting processes were positioned as early leaders, while those relying on spreadsheets struggled with overlapping deadlines.

2025 was a turning point for environmental social and governance reporting among listed corporates. It was a year of regulatory recalibration. The world shifted firmly towards the International Sustainability Standards Board (ISSB) framework as the emerging baseline for investor-focused disclosures. At the same time, ESG ratings, benchmarks and data quality came under the microscope for sheer volume.

This shift in the ESG landscape meant practical implementation, governance enhancements and alignment across frameworks. Companies with ESG strategies and structured data models emerged as early leaders as the disclosure calendars from platforms like CDP, CSA and EcoVadis tightened up.

Below we provide a rundown of the key ESG frameworks and developments that shaped 2025, what they meant in practice for corporate sustainability and what ESG teams should keep an eye on for 2026.

2025: By the Numbers

2025 was the year ESG moved from theory to tracked, enforceable practice. Despite political headwinds in some jurisdictions and quarterly outflows from sustainable funds, the structural shift towards integrated sustainability disclosures continued.

Here are some of the numbers that mattered:

• Global ESG fund assets: Held steady around USD 3.1–3.2 trillion in early 2025
• Global clean energy investment (2024): Approximately USD 2 trillion—roughly double fossil fuel investment
• US sustainable assets under management: Rose slightly to 26% of total AUM by mid-2025
• Asset owners increasing sustainability integration: 73% globally, driven primarily by financial performance considerations

Several jurisdictions announced or advanced ISSB-aligned rules in 2025. Hong Kong began phasing in IFRS S2-aligned climate disclosures from 1 January 2025. The UK consulted on UK Sustainability Disclosure Standards (UK SRS). Türkiye took its first steps towards regulated reporting with TSRS standards. And the UAE’s Federal Climate Law entered into force in May 2025, as the global momentum behind climate commitments gathered pace.

Despite political flux—including US executive orders promoting fossil fuels and rolling back Inflation Reduction Act incentives—asset owner sustainability uptake (73%) and California’s persistence on climate laws showed that ESG considerations are here to stay in stakeholder expectations and financial markets.

Regulatory Updates: CSRD, ESRS and Global Standards

2025 was the year ESG regulation went from expansion to consolidation. Policymakers across the EU, UK, US and Middle East adjusted timelines and datapoints but kept the core ESG objectives and enforcement intact. The message was clear: simplify but not retreat.

Below we break down the major regulatory developments by jurisdiction.

ESRS / CSRD in the EU: From Expansion to Implementation

The CliffsNotes version: 2025 was the first real CSRD reporting year for Wave 1 entities (large public interest entities), while the Omnibus proposals reset the timelines for others. Quality of governance and ESG data—not quantity—was what mattered most.

2025: The Highlights

The EU’s “Omnibus simplification package” was first adopted by the EU Council on 14 April 2025, following European Parliament approval on 3 April. This package proposed:

• Delaying CSRD for certain large undertakings and listed SMEs to 2028–2029
• Raising employee and turnover thresholds for defining “large undertakings” under both CSRD and the Corporate Sustainability diligence directive (CS3D)
• Two-year postponements for climate transition plans
• Removal of harmonised CS3D liability regimes still under negotiation
• EFRAG’s 2025 work programme focused on major revisions to the European Sustainability Reporting Standards (ESRS). On 20 June, EFRAG published a draft progress report proposing streamlined disclosures, simplified double materiality assessments and burden-reduction measures. Exposure drafts for amended ESRS followed on 21 August and continued on 3 December, with a focus on readability, reporting reliefs and materiality thresholds for non-financial entities.

The final vote on passing the EU Omnibus took place and passed in the EU Parliament on December 16th  2025.

Early 2025 CSRD reports from large EU-listed companies showed practical approaches to double materiality assessments. Impact-Risk-Opportunity (IRO) counts typically ranged from the low 20s to low 50s. These reports showed increased transparency on carbon emissions, energy efficiency, water, waste management, biodiversity, diversity, labour practices and community metrics. Science based targets and net zero commitments were common, although application of double materiality varied.

What to watch:

• Finalisation of datapoint reductions (potentially cutting mandatory datapoints by more than 50%)
• How national enforcement authorities will judge the quality of reduced sustainability disclosures
• Growing pressure for alignment between ESRS, ISSB and investor-focused reporting

ISSB / IFRS Sustainability Standards: The New Global Baseline

2025 was the first year ISSB moved from conceptual frameworks to phased-in mandatory or quasi-mandatory use in capital markets. ISSB is now the standard around which all other reporting frameworks are building.

2025 Milestones:

• Hong Kong: Phased in IFRS S2-aligned climate disclosures for listed issuers from 1 January 2025
• United Kingdom: Consulted & published exposure drafts on UK Sustainability Disclosure Standards (UK SRS S1 & S2); 2026 approval pending
• Türkiye: Took first steps toward regulated reporting with TSRS standards
• ISSB: Issued targeted amendments to IFRS S2 addressing sector-specific climate risk disclosures and financed emissions

Early adopters in 2025 set the bar high for consistent, investor-grade climate metrics. Many regulators signalled future assurance requirements for ISSB-aligned reporting that would match financial reporting rigor.

What to Watch in 2026:

• When and how ISSB becomes mandatory in your jurisdiction
• Expectations around independent assurance of ISSB-aligned sustainability disclosures
• Can ISSB outputs coexist with ESRS and US-style climate reporting
• Can corporates avoid duplication by having a single ESG data model?

California Climate Laws (SB 253 & SB 261):

US climate disclosure rules adopted by the SEC in 2024 faced legal challenges throughout 2025 and created uncertainty for multinational issuers. But California’s climate laws moved forward despite court actions.

California remained the US standard-setter despite legal challenges. Scope 3 greenhouse gas emissions and climate risk disclosures were top of the agenda.

The California Air Resources Board (CARB) advanced draft regulations in 2025 on:

• Scope 1, 2 and 3 emissions reporting
• Climate risk disclosures
• Public consultation rounds and draft enforcement timelines

A court injunction delayed SB 261 implementation but preparatory enforcement notices and guidance still encouraged large businesses operating in California to prepare for climate risk reporting. Proposed rulemaking was delayed to Q1 2026 board meeting but SB 253’s 2026 reporting on prior-year GHG emissions remained unchanged.

Financial implications for multinationals: Companies with over USD 1 billion revenue operating in California must now model how these state rules intersect with SEC, ISSB and ESRS frameworks—especially around Scope 3 data and global supply chains.

California’s rules support the state’s 2045 carbon neutrality goal and 100% clean electricity targets which exceed federal baselines.

What to Watch:

• Enforcement timelines and penalties
• Alignment with ISSB (TCFD and IFRS S2) and SEC-style disclosures
• Multinationals with California operations caught by these new reporting requirements

UK and Middle East: Stewardship, Supply Chains and New Climate Laws

The UK and selected Middle East jurisdictions used 2025 to refine stewardship, supply-chain and climate rules that impact global ESG strategies.

UK Modern Slavery Act Updates:

2025 saw a major overhaul of the UK “Transparency in Supply Chains” guidance under the modern slavery act. Key changes included:

• A new five-step risk assessment framework
• Broader supply chain definition covering all tiers of suppliers
• Enhanced expectations around business and human rights due diligence
• Clearer guidance on diligence obligations for business partners

UK Stewardship Code:

The updated UK Stewardship Code in 2025 reinforced long-term sustainable value creation but shifted focus towards narrative, outcomes-focused reporting instead of checklist-style ESG disclosures.

UAE Federal Climate Law:

The UAE’s Federal Climate Law entered into force on 30 May 2025, mandating:

• Greenhouse gas measurement and reporting
• Data retention for at least five years
• Penalties up to 2 million dirhams for noncompliance
• A national target of climate neutrality by 2050

These developments underscore how listed corporates must enhance supply chain due diligence, human rights oversight, and climate governance across global operations to remain competitive and protect consumers.

Contact Nossa Data for support with managing ESG Regulatory compliance & preparations

Annual and Thematic ESG Reporting Updates

Beyond hard law, 2025 was shaped by updates to mainstream voluntary (and semi-mandatory) frameworks underpinning climate, nature, and impact reporting. While some frameworks like TCFD and SASB are being folded into ISSB, they still influence regulatory design and stakeholder expectations.

TCFD: Still the Backbone of Climate Disclosure

TCFD principles remained foundational in 2025, even as ISSB began to subsume its recommendations into IFRS S2.

2025 Highlights:

The UK Financial Conduct Authority (FCA) published its 2025 climate disclosure review findings. The review critiqued inconsistencies in listed issuers’ and asset managers’ TCFD-aligned disclosures, particularly around:

• Scenario analysis quality
• Transition plan robustness
• Consistency in climate risk governance

Regulators in multiple jurisdictions used 2025 to move from “comply or explain” to more prescriptive expectations for climate metrics, governance factors, and risk management.

What to Watch:

• How ISSB will move the TCFD agenda forward (continued integration with IFRS S2)
• Increased regulatory scrutiny of scenario analysis and climate transition plans
• Corporate climate reports increasingly evaluated through both a TCFD and ISSB lens

TNFD: Nature Moves from Pilot to Practice

2025 saw rapid uptake of the Taskforce on Nature-related Financial Disclosures (TNFD) by investors and early-adopter corporates, particularly in high-impact sectors like the energy sector and agriculture.

2025 Milestones:

• Sector guidance packages were finalised and published
• TNFD status report summarised pilot learnings and emerging best practice
• Guidance on “nature transition planning” was released, explaining how companies can integrate biodiversity and ecosystem considerations into broader climate and enterprise risk management strategies

Investors rapidly adopted metrics on dependencies, and heightened awareness around environmental impact from extreme weather events pushed nature onto corporate agendas.

What to Watch:

• If and when regulators incorporate TNFD concepts following UN Biodiversity COP 16
• Growing investor expectations around disclosing nature-related dependencies and environmental and social impacts
• How TNFD fits with climate and enterprise risk reporting frameworks

GRI: Evolving Climate and Energy Standards

GRI remained the primary framework for impact-focused sustainability disclosures in 2025, especially for stakeholders beyond investors. It continues to anchor corporate transparency around renewable energy, labour practices, and community engagement.

2025 Developments:

Revised GRI Climate and Energy topic standards were published, updating requirements on:

• Greenhouse gas emissions reporting
• Energy consumption metrics
• Climate mitigation and adaptation disclosures

These revisions were designed to improve interoperability with ESRS climate and energy datapoints, making it easier for companies to map disclosures across frameworks.

What to Watch:

• GRI’s continued convergence with ESRS impact datapoints
• How GRI fits with ISSB reporting—and the rise of hybrid reports
• Balancing GRI’s impact lens with ISSB’s investor lens in business strategy

For more information on GRI, TNFD, and ESRS updates, check out our blog post here.

SASB: Sector Metrics in the ISSB Era

SASB standards remained the primary reference for sector-specific ESG metrics in 2025, even as they moved under the ISSB umbrella.

2025 Updates:

Exposure drafts proposing amendments to SASB standards were released to better align with IFRS S1/S2. Updates addressed:

• Sector climate metrics
• Financed emissions methodologies for financial institutions
• Enhanced sector comparability measures

Listed corporates in 2025 increasingly used SASB metrics to benchmark esg performance against peers for investors and ratings providers.

What to Watch:

• When SASB amendments are finally wrapped up
• How SASB metrics get integrated into ISSB reporting
• Ongoing work on emissions and sector metrics

Contact Nossa Data for support with streamlining and aligning your annual reporting disclosures & processes

Benchmarks, ESG Ratings and Data Providers Under Scrutiny

2025 marked a turning point where ESG ratings and benchmarks shifted from unregulated market tools to activities under direct or indirect regulatory oversight. Listed corporates increasingly had to manage ratings governance: who they respond to, how they validate data, and where they reference ratings in annual reports and prospectuses.

“Rate the Raters” Regulation

Policymakers in 2025, particularly in the EU and UK, advanced frameworks to regulate ESG ratings providers, moving them closer to being treated as regulated financial services.

2025 Developments:

• EU (ESMA): Consulted on technical standards for ESG ratings regulation covering governance, conflicts of interest, and methodology transparency. Regulation coming into effect Summer 2026
• UK (FCA): Confirmed forthcoming ESG ratings legislation with FCA publishing proposed rules - implementation in 2028
• Japan & HK: Issued IOSCO-aligned voluntary codes of conduct

What Corporates Need to Know:

• Disclose which ESG ratings providers you engage
• Understand your rights to challenge or influence ratings methodologies
• Track how ratings are referenced in annual reports and prospectuses
• Manage greenwashing risk and reputational risks from ESG claims

For an overview of the top ESG rating agencies assessing listed companies, see this guide.

CDP: More Time-Sensitive and Influential

CDP sharpened its role as a de facto climate data standard in 2025, with more investors using CDP outputs to supplement regulatory disclosures.

2025 Recap:

• New questionnaire and guidance published with increased emphasis on climate transition plans, Scope 3 emissions, and nature/water questions
• 2024 scores and A-List made public
• Scored submission deadline: 17 September 2025
• Unscored amendment window closed: 19 November 2025
• 2025 scores released privately in December

CDP scores and the A-List publication had noticeable reputational impact for listed corporates, influencing investor perception and, in some markets, banking relationships related to sustainability reporting.

What to Watch:

• Even closer alignment between CDP questions, ISSB/ESRS datapoints, and regulatory requirements
• Growing investor reliance on CDP outputs for climate commitments
• Can we trust what companies are submitting in their sustainability disclosures?

S&P Global CSA: Midyear Investor Checkpoint

The S&P Global Corporate Sustainability Assessment (CSA) remained a critical benchmark in 2025, especially for inclusion in major sustainability indices.

2025 Recap:

• First 2025 CSA scores released in July, providing a midyear snapshot of company’s financial performance on ESG metrics
• Investors increasingly cross-checked CSA outcomes against publicly available CSRD, TCFD, and ISSB-style disclosures

What to Watch:

• Methodology and weighting updates
• Pressure for closer alignment with regulatory reporting frameworks
• Scrutiny of scores against actual disclosures to spot greenwashing

EcoVadis: Beyond Supply Chains to Enterprise Reputation

EcoVadis’ influence expanded in 2025 from a procurement tool into a broader ESG performance signal used by customers, lenders, private sector investors, and private equity.

2025 Recap:

• EcoVadis moved medals to a percentile-based system
• Ranked #1 as “most useful” ESG rating provider in ERM’s Rate the Raters 2025 study

What to Watch:

• How EcoVadis interacts with incoming EU/UK ESG ratings regulation
• Will companies start explaining EcoVadis performance externally?
• Integration with supply chain due diligence and sustainable finance requirements

Thomson Reuters Foundation Datasets: WDI and AICDI

2025 saw growing use of thematic ESG datasets to contextualise companies’ own disclosures, especially on workforce and access to justice topics.

2025 Updates:

• Workforce Disclosure Initiative (WDI) published ESRS-focused analysis linking outputs to workforce and human capital requirements
• AI Company Data Initiative (AICDI) launched a new dataset

What to Watch:

• How regulators and investors use these datasets alongside CSRD/ISSB reports
• Application in due diligence and risk assessments
• Linking to UN Guiding Principles and business and human rights frameworks

Contact Nossa Data for end-to-end disclosure integration with ESG benchmark platforms, assessing scoring gaps, & ensuring AI-readiness of your ESG data

Operational Lessons from 2025: Data, Systems and Governance

2025 rewarded companies that had already invested in centralised ESG data models, clear governance structures, and cross-functional reporting calendars.

Key Operational Insights:

• Listed corporates relying on manual spreadsheets struggled to meet overlapping CSRD, CDP, CSA, EcoVadis, and national reporting obligations without errors or version-control issues
• Leading companies built a “single source of truth” ESG data architecture capable of mapping to ESRS, ISSB, GRI, TNFD, and ratings questionnaires simultaneously
• Board and senior management oversight of ESG data quality, ratings engagement, and litigation/greenwashing risk became central to corporate strategies
• The role of AI and digital tools in ESG data management grew—including automation, validation, and predictive analytics—while energy and governance considerations around AI use also emerged

What Separated Leaders from Laggards:

Leaders

• Data Architecture: Unified ESG data platform(s)
• Governance: Board-level oversight & ESG steering committees
• Reporting Calendar: Integrated & proactively managed
• Framework Mapping: Automated across multiple frameworks
• Assurance Readiness: Built-in controls & centralised documentation

Laggards

• Data Architecture: Fragmented spreadsheets
• Governance: Ad-hoc responsibilities & delegation
• Reporting Calendar: Reactive & deadline-driven
• Framework Mapping: Manual, repetitive duplication
• Assurance Readiness: Retrofitted compliance with over-dependency on auditor guidance

ESG systems outperformed spreadsheets. Companies that had sorted their data models were already ahead—able to enhance resilience, reduce compliance burdens, and respond to investor and regulatory requirements with confidence.

2025 Summary: What Listed Corporates Are Taking Into 2026

2025 did not roll back ESG—it clarified, delayed selectively, and raised expectations on quality and assurance.

Key Takeaways for 2026:

• CSRD survived in a leaner but still enforceable form, with the Omnibus simplification package reducing datapoints without abandoning core reporting obligations
• ISSB became the organising principle for investor-focused sustainability reporting across global frameworks
• ESG ratings entered the era of formal oversight, with EU and UK regulations demanding new governance around how companies select and reference ratings
• Nature-related disclosure frameworks matured faster than expected—TNFD and revised GRI standards signal that biodiversity and natural capital will be a key focus area in 2026–2028
• Disclosure deadlines got tougher, making ESG calendars and data systems critical to business operations
• Jurisdictional fragmentation (EU, UK, US/California, UAE, and others) means companies must design ESG systems that flex across multiple regulatory and ratings regimes
• Data consistency, robust governance, and integrated ESG systems are now competitive advantages, reducing compliance risk and strengthening investor trust

The sectors which invested in structured, centralisable ESG data are positioned to enhance transparency, meet evolving regulatory requirements, and drive value creation—regardless of which framework takes precedence in any given jurisdiction.

For companies still relying on patchwork approaches, 2026 will require a shift toward unified ESG data platforms that can handle reporting, regulation, and ratings all at the same time. That’s exactly what solutions like Nossa Data are built to solve.

FAQs

Do companies still need to report against multiple frameworks after 2025?

Yes, they do. 2025 showed that overlap between ESRS, ISSB, GRI, TNFD, and ratings platforms like CDP and EcoVadis is unavoidable. The key advantage comes from structuring ESG data once and being able to map it across all the different frameworks. Rather than duplicating effort, companies that build a single, centralised data layer can respond to sustainability reporting requirements across jurisdictions without starting from scratch each time. This is the approach that platforms like Nossa Data enable—helping companies manage ESG initiatives, voluntary ESG disclosures, and mandatory requirements from a unified foundation.

How do the new EU/UK “Rate the Raters” regulations affect corporates directly?

In effect, ESG ratings are now treated as regulated financial information in key markets. Post-2025, companies need a clear grip on how they select, reference, and explain their ratings. This means establishing governance around which ratings providers you engage, understanding investor rights to challenge methodologies, and ensuring any ratings referenced in annual reports or prospectuses can be substantiated. Companies will also need to manage how changes in ratings are communicated, especially where ESG performance influences sustainable finance relationships or index inclusion.

How should smaller or non-EU listed companies prepare if they are not yet in CSRD scope?

Even if not directly subject to the corporate sustainability reporting directive, smaller companies should begin preparing now. Practical steps include conducting early materiality assessments aligned with double materiality principles, upgrading data systems to capture ESG metrics systematically, and mapping current disclosures to ISSB requirements. Many such companies will face indirect pressure through global supply chains—large customers subject to CSRD or EU taxonomy requirements may request enhanced ESG data from suppliers. Early preparation also positions companies to respond to investor expectations and potential future regulatory requirements in their home jurisdictions.

How can companies manage ESG litigation and greenwashing risk after 2025?

The heightened regulatory scrutiny of 2025 brought increased litigation risk around climate targets, AI use in ESG claims, and supply chain diligence. To manage this, companies should establish robust internal controls around ESG data quality and disclosure sign-off. Seeking independent assurance for key sustainability disclosures—particularly around climate commitments and net zero targets—adds credibility and reduces exposure. Transparency is essential: avoid overclaiming on ESG factors or making forward-looking statements without clear evidence and methodologies. Companies should also monitor developments around industrial strategy and European competitiveness initiatives, which may influence enforcement priorities.

What was the biggest operational lesson of 2025?

Calendars matter. Companies that succeeded in 2025 had integrated ESG data management systems that could meet overlapping deadlines for CSRD, CDP, CSA, EcoVadis, and national filings without version-control chaos or data quality issues. The lesson is clear: shift away from patchwork reporting toward a single, structured ESG data layer that can handle reporting, regulation, and ratings simultaneously. That operational shift—supported by economic growth in ESG technology—is now a competitive differentiator for listed corporates navigating climate change, global warming pressures, and energy transition demands.