Sustainability reporting as a catalyst for strategic growth

Sustainability reporting is evolving fast. With mandatory frameworks like the International Sustainability Standards Board (ISSB) and the Corporate Sustainability Reporting Directive (CSRD), and emerging ones such as the Taskforce on Nature-related Financial Disclosures (TNFD) and the Taskforce on Inequality and Social-related Financial Disclosures (TISFD), businesses face growing pressure to disclose sustainability-related information.

In terms of the regulatory landscape, 2025 marked the first year of mandatory sustainability reporting under the CSRD in the EU. Globally, ISSB adoption continues to gain momentum; more than 36 jurisdictions have adopted (or are on the journey to adopt) the ISSB standards.

But in the current context of regulatory shifts and uncertainty, what’s the real value of sustainability reporting beyond compliance? This blog explores how companies can unlock their full potential by turning sustainability reporting into a lever for long-term value creation.

We are still in the early stages of the sustainability reporting journey. While some companies have started to report under mandatory frameworks and others are just starting their journey, most initial efforts remain focused on materiality assessments and understanding disclosure requirements under mandatory frameworks. There is still significant progress to be made, particularly in strengthening internal operating processes, controls, and embedding sustainability into core strategy and decision-making processes. In these early days, and amid ongoing regulatory shifts and uncertainty, many companies are questioning what the real benefits of sustainability reporting are.

Sustainability reporting is set to continue to rapidly evolve and has the potential to become increasingly important alongside financial reporting. Investors continue to ask for consistent, high-quality and comparable sustainability-related information. PwC’s Global Investor Survey 2024 found that nearly two-thirds of investors gain significant confidence from sustainability reporting when disclosures are consistent and comparable year-on-year.

The transition to a greener economy, at least in the EU, is reinforcing the need for high-quality sustainability reporting, and the valuable business insights it provides. At the same time, scrutiny from customers, consumers, and other stakeholders has intensified over recent years as societal mindsets evolve, pushing businesses to demonstrate genuine sustainability. Echoing this, PwC’s Voice of the Consumer 2024 survey found that more than four-fifths of consumers are willing to pay more for sustainably produced or sourced goods, even as cost-of-living pressures weigh. 

Yet many companies still approach sustainability reporting with a compliance mindset, missing its broader strategic potential. As reporting efforts mature, the focus should shift toward value creation and how to capture it.

Effective implementation is crucial to unlock value creation. While sustainability reporting can be costly, cutting corners often leads to greater long-term risks. This is where proper implementation matters. Opting for a quick and cheap implementation means that material sustainability-related risks may not be properly identified or not thoroughly managed. Companies may also be missing crucial insights and sustainability data that could be decision-useful. Those that are unprepared and lack resilience may face higher costs in the future. For example, investing in flood barriers or relocating facilities away from coastal zones can reduce exposure to physical climate risks like rising sea levels or extreme weather events. Without these measures, businesses may face costly disruptions, insurance challenges, or even asset impairments—risks that could have been mitigated with timely and effective planning.

Companies that embed sustainability into their strategy, operations and decision-making processes are better positioned to mitigate risks, strengthen resilience, enhance financing opportunities, and capitalise on the transition to a greener economy. These benefits are most effectively realised and optimised when sustainability is embraced as a strategic tool and not just a regulatory requirement.

To fully leverage sustainability as a strategic tool, companies should develop a robust business case that clearly demonstrates the business value. This means going beyond just managing sustainability-related risks to creating value from sustainability initiatives. Many businesses struggle to translate ambitions into actionable strategies due to perceived high costs and unclear long-term inaction consequences.

A strong business case for sustainability should link sustainability performance to financial performance. Beyond setting out measures and actions to address sustainability-related risks, it should highlight business opportunities, identify key value drivers, and articulate the path to achieving value creation.The article ‘The sustainability factor: Mastering new drivers of value creation’ illustrates this well, outlining five interconnected value drivers that companies can use to unlock sustainability-related opportunities and manage associated risks, helping translate these factors into tangible business value.

Echoing the potential value of sustainability reporting, PwC’s Global Sustainability Reporting Survey 2025 indicates that 70% of respondents who have reported under ISSB or CSRD—whether voluntarily or not—find that beyond compliance, significant or moderate value is obtained from data and insights collected for ISSB/CSRD reporting.

However, early CSRD reporting suggests that many companies have so far primarily focused on sustainability-related impacts and risks. To fully realise the potential of sustainability as a value driver, more effort may be needed to identify and quantify the financial upside of sustainability-related opportunities. High-quality reporting plays a critical role here: it helps articulate the outcomes of a well-structured business case, demonstrates how risks and opportunities are being managed, and shows how sustainability is embedded in strategy and decision-making processes, which is precisely what investors are looking for.

Sustainability reporting is far more than a simple regulatory exercise. It is a strategic lever for long-term value creation. But in order to take it to the next level, companies should build a strong business case and embed sustainability at the core of their strategy, operations and decision-making processes. High-quality reporting and decision-useful disclosures build trust, guide investment decisions and protect value by reducing uncertainty. Those that use sustainability to drive value creation and resilience—not just to meet rules—will be better positioned to thrive.