Current global trends in environmental, social, and governance (ESG) issues and evolving regulatory developments continue to shape the landscape of ESG reporting in 2025, driven by advancements in technology that enable real-time data analysis, decision-making, and environmental stewardship. As regulations come into effect across jurisdictions in the European Union, Australia, Singapore, Hong Kong, and California, mandating comprehensive ESG reporting and heightened supply chain oversight, companies will look to technology solutions to ensure compliance and frame strategies to meet sustainability goals.
The debate over the purpose of a corporation in the context of sustainability has influenced the development of regulations that seek disclosure of a company’s material ESG risks that may affect value creation for shareholders. Forward-thinking companies are not merely complying but integrating sustainable practices deeply into their operational strategies. This strategy evaluates performance from a broader perspective by considering the triple bottom line—environmental, social, and financial dimensions. Sustainable businesses and compliant businesses alike will require sophisticated data collection and analysis to meet regulatory needs and to integrate sustainability into their operations.
With technology and regulations continuously evolving, organizations demand reliable solutions that can easily adapt to meet reporting needs and help them operationalize short- and long-term sustainability goals. Oracle offers solutions that seamlessly integrate data across organizational silos—from financials and procurement data to supply chain and human resource data—empowering informed decision-making through interactive dashboards and advanced analytics. Oracle’s AI services are embedded across our full stack of solutions to help companies increase productivity, foster innovation, and transform data to deliver insights and solve complex challenges.
Research has shown that sustainable practices are good for business and can improve a company’s brand reputation, reduce environmental and supply chain risks, improve production and distribution cost and impacts, and help companies gain competitive advantage. A 2023 study by Bain & Company and EcoVadis uncovered a correlation between sustainability and profitable business results.
All industries are responsible for producing negative externalities, such as greenhouse gas emissions (GHG) associated with product manufacturing or operations. The extent to which an organization is contributing to global emissions and the measures taken by the company to mitigate environmental risk are important considerations for investors, shareholders, customers, suppliers, and other stakeholders. ESG reporting regulations promote transparency in the market, reinforcing risk management practices, increasing market competition for responsible investments, and encouraging accountability and progress toward ESG goals. With tools to track and measure negative externalities, companies can focus on mitigation measures that reduce their own operational impacts and the indirect impacts within their value chain.
In the European Union, enhanced focus on climate disclosure will impact more companies as 2025 marks the first year of mandatory climate reporting for large public entities operating in the EU comes into effect aligned with the EU Corporate Sustainability Reporting Directive (CSRD). Companies will also need to comply with new digital tagging requirements for ESG data using human and machine-readable XBRL formats through both the EU taxonomy and CSRD, which enables data comparability, streamlined data analysis, and regulatory compliance.
The EU Sustainable Finance Disclosure Regulation (SFDR) is also expected to undergo amendments to better align with the EU taxonomy and CSRD, which will bring changes for financial institutions.
In the UK, the government has supported the adoption of the ISSB’s International Financial Reporting Standards (IFRS) S1 and S2 standards for sustainability and climate reporting, with mandatory reporting likely to begin in 2026. IFRS S1 requires firms to disclosure their approach to governance, strategy, risk management, and performance metrics related to sustainability. IFRS S2 requires disclosure related to physical and transition risks. The new standards merge several frameworks including the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
Supply chain oversight continues to be a trending topic in 2025 with enhanced regulation to ensure EU companies are complying with human rights and environmental standards. Technology will play a critical role in assisting companies with end-to-end supply chain visibility in real-time that can help them make informed, data-driven decisions to mitigate risk and build resiliency.
In addition to SFDR and CSRD, certain EU companies and non-EU entities in the financial sector will need to consider future implementation of the EU Corporate Sustainability Due Diligence Directive (CS3D), which mandates human rights oversight and environmental due diligence in supply chains.
The EU’s Carbon Border Adjustment Mechanism (CBAM) is in its final transitional phase this year, requiring EU importers to report the carbon emissions embedded in their imports in the CBAM Transitional Registry and, beginning in 2026, buy certificates to offset those emissions or prove that the carbon price was paid during production.
Deforestation is also top of mind in the EU, where the EU Regulation on Deforestation-free Products (EUDR) aims to ensure that certain commodities do not originate from deforested land or contribute to further degradation. The regulation requires that anyone trading or exporting these products from the EU must conduct due diligence to ensure that the product was sourced sustainably.
Sustainability oversight will extend to nearly all products sold in the EU with the mandatory Digital Product Passport (DPP) initiative, which requires products to hold a digital document that stores details on the origin of materials, environmental impacts, manufacturing, consumer safety, compliance, and end-of-life disposal. The DPP registry is slated to launch in 2026.
In the United States, individual states have introduced laws that require companies to disclose environmental data and material climate-related risks, such as California’s Senate Bill 219, Greenhouse Gases: Climate Corporate Accountability: Climate-Related Financial Risk.
In December 2024, Canada launched its inaugural sustainability reporting standards that include financially material sustainability topics and climate-related topics that align reporting with the IFRS S1 and IFRS S2. The standards are voluntary with a transition period for mandatory disclosure.
In Asia-Pacific, Australia approved the Australian Sustainability Reporting Standards AASB S1 and AASB S2 in September 2024. AASB S1 includes voluntary disclosure standards for financially material sustainability-related risks and opportunities. AASB S2 is mandatory for certain entities and requires disclosure on financially material climate-related risks and opportunities with reporting starting this year.
Hong Kong approved mandatory climate disclosures for companies listed on the Hong Kong Exchange beginning in January this year that are aligned with IFRS S2.
Singapore has also implemented mandatory climate-reporting standards for listed companies beginning in 2025 that include disclosure of Scope 1 and Scope 2 emissions. The phased transition will require Scope 3 disclosure in FY2026 and external limited assurance in FY2027.
Oracle’s ecosystem of Fusion applications and AI agents work together to help you make data-driven decisions that can drive innovation, mitigate risk, limit environmental and social impacts, and cut costs.
The evolving regulatory landscape, technological changes, and the complexities of ESG data management and reporting are major challenges for companies to navigate in 2025. With technology solutions to help you evaluate your business, make data-drive decisions, and optimize resource use, Oracle can help you make progress toward your sustainability goals, meet regulatory needs, and plan for a better future.
Learn more about how Oracle can help you build a more sustainable future: Sustainability | Oracle
1 Axel Seemann, Sylvain Guyoton, Anna Bianchi, and Jacqueline Han, “Do ESG Efforts Create Value?,” Bain & Company and Ecovadis, https://www.bain.com/insights/do-esg-efforts-create-value/#
2 Amanda Carter, “Corporate Climate Disclosure Has Passed a Tipping Point. Companies Need to Catch Up.,” World Resources Institute, May 6, 2024, Corporate Climate Disclosure Has Passed a Tipping Point | World Resources Institute
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