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Companies are facing approaching deadlines for a new wave of global sustainability reporting. California’s climate disclosure laws, which are undergoing legal challenges, would require thousands of organizations to produce investment-grade climate risk reports. Many multinationals also fall under “Wave 2” of the EU’s Corporate Sustainability Reporting Directive (CSRD). And this is just the start of a broader, more complex regulatory journey.
The opportunity—and the urgency—are clear. Acting now can help you meet California’s deadlines, prepare for CSRD, and stay ready for what’s next. These requirements also open the door to something bigger: aligning sustainability and financial reporting to build a future-ready strategy. Done right, these regulations can create an opportunity to align sustainability and financial reporting more closely, enabling companies to build a future-ready reporting strategy and potentially leverage sustainability data to help identify ways to create long-term value for the business.
ESG and sustainability reporting A 12-month roadmap for capturing a sustainability reporting advantage
This new regulatory environment is anything but simple. Multiple timelines, varying reporting thresholds, nuanced data requirements, and evolving assurance rules make the landscape complex. Compounding this, many companies often need to reconcile existing voluntary reporting with new regulatory requirements—and do it with both speed and precision. For companies newly facing the CSRD, or those contending with California’s climate reporting laws, the key is to focus on activities that can build an interoperable reporting strategy capable of delivering immediate results while scaling for the future.
PwC has developed an illustrative roadmap that lays out a practical 12-month approach to meeting regulatory requirements. It is designed to help companies lay a strong reporting foundation, build the core of their program, operationalize reporting processes, and effectively communicate their final disclosures. As part of this roadmap, we’ve also provided a condensed 3-month “fast track” to help companies prepare for several California climate-related reporting requirements.
A 12-month roadmap
California fast-track:
Sustainability strategy Five moves to help drive value with your sustainability reporting strategy
To implement this roadmap, organizations should focus on five upfront fundamental actions that can drive meaningful progress across both short- and long-term sustainability reporting needs. These strategic moves are designed to help deliver value regardless of jurisdiction, and they form the backbone of a successful approach to regulatory readiness, whether for California, CSRD, or other global frameworks.
While companies may find the steps below more or less critical depending on where they are on their sustainability journey, these actions represent key components of an effective reporting strategy. Whether a business is just beginning to report or already navigating complex requirements, taking these steps can help build a strong, reliable foundation for managing today’s fast-changing environment.
Step 1: Secure executive buy-in: Executive sponsorship is one of the single most important accelerants for sustainability reporting. CFOs, ESG controllers and sustainability leaders can’t afford to treat reporting as anything but a strategic imperative. Without leadership alignment, programs can stall, budgets can lag and credibility can suffer. With it, organizations move quickly, allocate resources wisely, and transform compliance into advantage.
The stakes extend well beyond regulatory compliance. Sustainability reporting is becoming increasingly tied to investor confidence, brand reputation, and access to capital. Disclosures backed by the C-suite and independently assured can also carry weight with stakeholders. Securing executive buy-in won’t be automatic. You will likely encounter several obstacles, but if left unaddressed, these challenges can create risk. Here’s how to overcome them.
How to turn C-suite skeptics into sponsors
| Step | Action | How it creates value |
| Rapid upskilling | Conduct teach-ins on how regulations converge, timelines, and assurance requirements. | Aligns leadership on key requirements and enables them to make faster, more informed decisions. It also dispels the notion of waiting until deadlines are near, which can inflate costs. |
| Strategic framing | Embed sustainability into corporate strategy to improve resilience, reduce costs, increase revenue, and gain access to capital. Be sure to link sustainability metrics to financing (e.g., sustainability linked loans). | Leaders get a clear sense of the link between sustainability and real dollars. |
| Stakeholder engagement | Map key stakeholders and messaging cadence. | Focuses scarce C-suite time on the topics that matter. |
| Governance | Appoint and assign responsibilities for the sustainability reporting steering committee chair. | Locks in accountability early and avoids duplicating work as regulation expectations evolve and assurance requirements increase. |
| Funding and KPIs | Approve a budget and datasets with assurance-ready controls. | Signals C-suite commitment and enables execution. |
Step 2: Charting your sustainability–financial integration journey: Determining the ambition for sustainability reporting is ultimately a strategic choice and one that signals how a company intends to integrate sustainability into its business, governance, and financial narrative. The long-term destination is clear: sustainability and financial performance reported side-by-side as part of the company’s story about value creation. But reaching that level of integration often takes time, system maturity, and organizational alignment.
For most companies, especially those subject to CSRD, Year 1 reporting marks the start of an integration journey, where the key decision is how far to go now while building toward full convergence over time. This early ambition shapes your organization’s reporting structure, tone, and messaging, as well as how sustainability insights are embedded into enterprise decision-making.
The integration journey typically progresses through three stages of ambition:
- Strategic foundation: Establishing a coherent sustainability narrative that can connect priorities, performance, and governance to the business strategy. This phase focuses on clarity, consistency, and internal alignment around what matters, and may take the form of separate standalone documents (e.g., financial reporting, sustainability reporting).
- Integrated sustainability narrative: Aligning sustainability and financial messaging to show how environmental and social factors influence business performance and risk. This requires stronger collaboration across finance, sustainability, risk, and communications teams, and may include some overlap in disclosures or integrated content.
- Fully integrated reporting: Embedding sustainability metrics and insights directly into corporate financial reporting and management discussions. As one integrated disclosure, this signals to investors and stakeholders that sustainability is core to long-term value creation and enterprise resilience.
Practical steps to set your organization’s reporting ambition
| Step | Action | How it creates value |
| Define purpose and audience | Review stakeholder landscape and information needs, as well as intended audiences of reporting types. | Prevents unfocused messaging and aligns tone, scope, and format. |
| Assess current capabilities | Evaluate team skills, data quality, and governance maturity. | Grounds ambition in reality and flags resourcing needs early. |
| Set year 1 reporting approach | Consider disclosure approach options (e.g., standalone reporting, integrated reporting) and align on year 1 approach and how it may need to evolve over time. Benchmark peers and align with corporate strategy. | Sets expectations, aligns internal teams, and guides resource allocation. |
| Align stakeholders | Engage finance, sustainability, legal, and communications to confirm ownership of reporting elements. | Builds cohesion, avoids siloed messaging, and accelerates workflows. |
| Plan for flexibility | Design reporting with room to scale as regulations evolve. | Confirms agility and avoids costly rework as obligations expand. |
Step 3: Understand requirements across global sustainability regulations: While the CSRD, ISSB and California’s climate laws contain overlapping data requirements, each regulation does outline unique disclosures. The key is to identify overlaps, reduce duplication and create a scalable approach that can work across frameworks. As companies begin this work they should consider the following:
- Diverging scopes and compliance thresholds
- What qualifies as a reporting entity or activity under one regulation may not trigger reporting under another.
- Overlapping but not identical data requirements
- Companies should understand interoperability. While key regulations do have overlapping requirements, some jurisdictions may have unique disclosures. For example, the reporting boundaries for greenhouse gas emissions or climate risks may differ slightly by regulation, potentially causing errors and inefficiencies that need reconciliation.
- Misaligned timelines
- Companies often need to collect and report data on different cadences and across different timeframes, which complicates planning and resourcing.
- Evolving assurance and governance expectations
- Many new regulations require limited assurance or outline a move to reasonable assurance over time, which in turn demands strong documentation, well-defined internal controls, and clear roles. These capabilities are not always fully established.
- Emerging—but incomplete—interoperability guidance
- While EFRAG and ISSB are aligning standards, companies lack clear, prescriptive tools for harmonizing across frameworks in practice.
How to navigate regulatory requirements across multiple jurisdictions
| Step | Action | How it creates value |
| Map applicability and scope | Identify which entities, jurisdictions, and business units fall under each regulation. | Clarifies obligations and prevents blind spots. |
| Consider interoperability | Use interoperability resources from ISSB, EFRAG, and others to review overlapping requirements and to align disclosures. Align materiality assessment approach(es) with framework requirements. | Reduces duplication and builds efficiency across frameworks. |
| Conduct a gap analysis | Compare current reporting practices against requirements to pinpoint missing data or process gaps. | Prioritizes investments and reduces surprises as deadlines near. |
| Draft a roadmap and remediation plan | Create an action plan with timelines, resourcing, and governance aligned to requirements. | Provides structure, accountability, and transparency. |
| Engage collaboratively across functions | Connect finance, sustainability, legal, risk, and communications to co-own reporting. | Breaks down silos, confirms consistent messaging, and speeds execution. |
Step 4: Embedding governance and oversight into sustainability reporting: Ambition alone means little without disciplined execution. To meet California, CSRD and ISSB disclosure requirements, companies need a purpose-built governance model that focuses on roles for reporting strategy, data collection, data and metric review, and report development. For most organizations, these roles will extend across the C-suite and into core business functions, from finance and risk to sustainability, operations, and IT.
Why does this matter? As sustainability reporting requirements grow more complex, oversight can’t be left to ad hoc committees or siloed teams. A structured framework—anchored by a steering committee, program management office (PMO), and working groups—helps provide the backbone for accountability and quality. It clarifies ownership, strengthens cross-functional collaboration, and makes sure that reporting aligns with both regulatory expectations and corporate strategy. By embedding oversight early, companies can position themselves to scale with evolving requirements.
Even with leadership support, companies often struggle to operationalize governance effectively. Five recurring challenges that can undermine reporting success:
- Undefined responsibilities and roles: Without clear ownership, activities overlap or fall through the cracks, creating accountability risks.
- Fragmented data sources: Sustainability data is often scattered across systems and departments, complicating quality, traceability, and assurance.
- Competing business priorities: Sustainability competes with other top initiatives for agenda time, resourcing, and funding.
- Inconsistent cadence: Teams working on different timelines create bottlenecks, slowing progress on important-path items.
- Limited sustainability expertise: A lack of regulatory and sustainability knowledge within governance bodies hinders oversight and weakens reporting confidence.
How organizations can build disciplined governance
| Step | Action | How it creates value |
| Design the structure | Create a layered governance framework with an executive steering committee, ESG PMO, and functional working groups. | Provides clear oversight, coordination, and escalation paths. |
| Establish a governance cadence | Set regular rhythms for steering committee, PMO, and working group reviews. | Maintains momentum, transparency, and timely decision-making. |
| Catalog capabilities | Define essential ESG reporting capabilities across strategy, data sourcing, metrics, report development, and assurance. | Enables coverage of all reporting needs and avoids capability gaps. |
| Outline responsibilities | Map ownership for each capability (finance, sustainability, legal, risk, IT) and consolidate into a functional accountability matrix. | Strengthens accountability, reduces overlap, and prevents missed tasks. |
| Provide training | Invest in upskilling teams through workshops, e-learning, and regulatory training. | Builds the expertise required to deliver audit-ready, compliant disclosures. |
Step 5: Understanding your sustainability technology capabilities: Your organization’s ability to execute on the first four strategic moves can largely depend on technology. Without a clear view of systems and data flows, sustainability reporting risks being fragmented, manual and vulnerable to error. With it, organizations can move beyond compliance toward scalable, investor-grade disclosures that strengthen both credibility and business performance.
Why does this matter? Sustainability and technology share a common trait: both span the overall enterprise and rely on data to create value. Sustainability teams need thorough and reliable data to meet regulatory requirements and track progress. Technology teams connect functions through scalable platforms and standardized systems. When aligned, these capabilities enable reporting that is not only timely and accurate but also adaptable to future frameworks, stakeholder demands, and operational decision-making.
Documenting your current sustainability technology capabilities is therefore an important first step. It enables organizations to identify where automation, integration, and oversight can have the biggest impact, while also highlighting gaps that may threaten assurance readiness. By mapping what exists today, companies build the foundation for a tech-enabled reporting architecture that can scale with confidence.
That said, many companies are still wrestling with legacy processes built for ad-hoc, voluntary disclosures. The challenges extend across the organization. PwC’s 2025 Digital Trends in Operations Survey found that 92% of supply chain leaders say tech investments haven’t fully delivered the expected results.
This points to some common challenges:
- Data inconsistency: Lack of standardized governance and traceability across business units undermines confidence.
- Manual, undocumented processes: Legacy workflows for calculation and consolidation often lack audit-ready documentation.
- Slow timelines: Manual or siloed processes can’t keep pace with new regulatory deadlines.
- Fragmentation: Sustainability data often lives in disconnected systems, making it difficult to reconcile across the enterprise.
The way forward starts with visibility. Organizations require centralized, cross-function data systems with reliable audit trails, strong controls, and transparent ownership. With the right technology backbone, companies can accelerate reporting cycles, strengthen assurance, foster alignment across functions and even unlock new commercial opportunities by leveraging sustainability data for insights on customer, investor or brand engagement.
AI and other digital tools should be a central part of this process. AI can quickly aggregate data from multiple sources to fill data gaps, verify sourcing and map data flows across supply chains. AI agents can analyze this data to spot anomalies and inconsistencies, reducing the risk of errors in disclosures. AI tools can further accelerate reporting efforts by drafting narrative disclosures, aligning this text with regulatory frameworks. By combining automation with human oversight, companies can streamline compliance, enhance transparency, and produce auditable sustainability data at scale.
How to establish a strong technology foundation
| Step | Action | How it creates value |
| Determine reporting requirements | Clarify which disclosures are required—mandatory, voluntary, and internal—and prioritize high-impact metrics. | Focuses resources on data that matters most for compliance and assurance. |
| Inventory your systems | Catalog platforms capturing relevant activity (energy, procurement, travel, HR, etc.). | Reveals where data lives and uncovers duplication or gaps. |
| Map data flows | Trace how data moves from source to disclosure, identifying automation opportunities, and control gaps. | Reduces inefficiencies, enhances traceability, and strengthens audit readiness. |
| Clarify ownership | Assign clear accountability for data entry, review, and approval. | Increases transparency and accountability across functions. |
| Assess system readiness | Evaluate whether current systems can support sustainability assurance and adapt to new regulatory needs. | Confirms scalability and avoids costly rework as requirements expand. |
| Capture user pain points | Gather insights from those managing systems day-to-day. | Highlights friction and risks that technical diagrams often miss. |
| Define next steps | Prioritize improvements, establish process, and controls documentation (RCM, narrative, etc.), and design a roadmap for future-state reporting. | Builds organizational alignment and sets a pathway for long-term scalability while decreasing reporting errors. |
From readiness to results Setting the stage for what comes next
By proactively securing executive sponsorship, implementing strong program governance, and advancing climate data readiness in the next three to six months, organizations can lay the groundwork for a resilient and future-proof sustainability reporting strategy. These foundational steps do more than just support compliance with California’s imminent climate disclosure mandates—they can create a solid platform to meet a growing array of global reporting requirements, including CSRD, ISSB, and beyond. With the right leadership commitments, governance and stakeholder structures, and technological infrastructure, companies can transform sustainability reporting from a reactive compliance exercise into a strategic capability that enhances credibility, supports data-driven decision making, and unlocks new opportunities for operational excellence and stakeholder engagement. Early investment in these areas ultimately positions organizations to navigate regulatory change with agility, reduce risk, and capture long-term value from their sustainability initiatives.
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