The sustainability landscape can sometimes feel like a rollercoaster. In 2025, it definitely does. New mandates, investor expectations, and broader definitions of ESG are reshaping the rules of the game. Companies are under pressure from many angles — sometimes to downplay ESG, sometimes to lean into it. For ESG professionals, these changes bring both pressure and opportunity. The good news is that embracing them can strengthen disclosures, build stakeholder trust, and future-proof your strategy, even (or especially) when times are uncertain.
As the ESG space becomes increasingly regulated, companies that miss regulatory deadlines risk fines and reputational damage. Investors are quick to penalize firms with weak or inconsistent disclosures, and stakeholders are increasingly skeptical of unsupported claims. On the flip side, organizations that anticipate change and adapt early can position themselves as leaders, earning credibility with regulators, attracting capital, and building long-term resilience.
1. Increasing regulatory demands for ESG disclosure
Governments and regulators worldwide are rolling out stricter ESG disclosure rules. The European Union’s Corporate Sustainability Reporting Directive (CSRD) has raised the bar for detail and comparability, while the International Sustainability Standards Board (ISSB) is creating a global baseline with its IFRS S1 and S2 standards. California has introduced Senate Bill 261, requiring climate-related financial risk disclosures, and Canada’s Office of the Superintendent of Financial Institutions (OSFI) is pushing banks and insurers to stress-test climate risk.
97% of professionals at global companies say they feel ready to report under CSRD by 2025, and 93% by 2026. Yet, a separate study found that 83% of businesses lack confidence in the audit readiness of their ESG data. Nearly half of FTSE 100 companies recently had to restate their climate data, especially on scope 3 emissions.
Reporting against one framework can be challenging enough, but harmonizing disclosures across a laundry list of frameworks is where most ESG teams start to feel overwhelmed. They must prepare for a world where regulators and investors expect consistency across CSRD, ISSB, and local requirements. Companies that embed audit-ready processes now will avoid last-minute scrambles later.
2. Rising investor scrutiny and climate risk transparency
Investors want deeper insights into how companies are managing climate risks and opportunities, and they have the power to enforce those demands. Coalitions like Climate Action 100+ and the Glasgow Financial Alliance for Net Zero (GFANZ) represent trillions in assets and are pushing companies toward higher disclosure standards.
Research shows that investor pressure is already driving outcomes. Institutional ownership correlates with stronger climate risk reporting, and investor demand has doubled sustainability disclosures over the past 20 years. In the U.S., alignment with the Task Force on Climate-Related Financial Disclosures (TCFD) jumped dramatically. By 2024, 84% of S&P 500 firms and 42% of Russell 3000 companies disclosed in line with TCFD, up from 62% and 17% just three years earlier.
Investors are increasingly pricing climate risk into valuation models, rewarding companies that demonstrate credible strategies and penalizing those that don’t. Strengthening scenario analysis and risk disclosures is a key strategy for maintaining shareholder trust and securing access to capital.
3. Growing focus on nature and biodiversity
The ESG conversation is expanding beyond carbon. Nature and biodiversity risks are coming into focus, driven by frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD). Adoption of TNFD grew 30% in 2024, with more than 500 organizations across 54 countries, including 129 financial institutions managing US$17.7 trillion, committed to TNFD-aligned reporting.
Policy drivers are reinforcing this shift. The Kunming-Montreal Global Biodiversity Framework, agreed at COP15, set global targets to halt and reverse biodiversity loss by 2030. This creates pressure on sectors like agriculture, mining, and real estate to account for ecosystem impacts in their disclosures.
Companies that act early can get ahead of stakeholder expectations and regulatory momentum. Integrating nature-related metrics into ESG reporting now sends a strong signal of credibility and preparedness.
4. Integration of climate strategy into core business plans
Rather than being treated as its own department or function, sustainability is being woven into corporate strategy and governance — where it belongs. Boards and executive teams are now expected to treat climate as a core business risk and opportunity, not just an operational or compliance issue. Regulators are reinforcing this shift. In the EU, the CSRD requires disclosure of scope 1 and 2 emissions, plus detailed information on how climate risks are managed and governed at the highest level. Other jurisdictions, from Canada’s OSFI guidance to California’s climate disclosure rules, are embedding the same expectations.
For ESG professionals, the challenge goes beyond emissions reporting. The real task is to show how climate action ties directly to business resilience and financial outcomes. Investors want to understand not just how much a company emits, but how it is adapting its strategy to a low-carbon economy. That means demonstrating clear links between decarbonization goals, capital allocation, and long-term growth.
This is also where climate disclosure becomes storytelling. Strong reports connect the dots: how a shift to renewable energy reduces both emissions and operating costs; how supply chain resilience efforts protect against climate shocks; or how financing new green products positions the business for emerging markets.
ESG disclosures must move from compliance exercises to strategic narratives. By embedding climate into business plans and reporting processes, ESG can drive resilience and help companies build credibility with investors, regulators, and stakeholders alike.
| Case study: KingSett Capital KingSett Capital, a Canadian private equity real estate investment business, faced growing expectations from investors and tenants to demonstrate credible environmental performance. The firm wanted to integrate sustainability more deeply into its investment strategy, but managing evolving disclosure requirements across multiple frameworks was a challenge. By adopting Manifest Climate, KingSett was able to map its disclosures against leading frameworks, identify gaps, and streamline reporting. More importantly, the platform helped KingSett show how its environmental goals, such as reducing emissions across its real estate portfolio, tied directly to investment strategy and long-term asset value. The result was a more coherent story for investors: one that maximized positive environmental impact while reinforcing financial outcomes. Manifest Climate gave KingSett the tools to embed sustainability into its business plans and demonstrate clear accountability to stakeholders. [READ MORE] |
5. Increasing use of AI and digital tools for ESG assessments
Manual spreadsheets and siloed systems can’t keep up with today’s reporting demands. ESG teams are under pressure to deliver disclosures that are not only compliant but also consistent, comparable, and transparent across multiple frameworks. The sheer volume of data, from greenhouse gas inventories to scenario analyses and supply chain metrics, makes this almost impossible to manage with traditional methods.
Teams often spend weeks chasing data from different departments, reconciling multiple versions of the same spreadsheet, and struggling to maintain a clear audit trail. When frameworks are updated (as they frequently are), companies are forced into last-minute rework, increasing the risk of errors or omissions. These inefficiencies also drain resources away from strategic planning and long-term climate action.
This is why more organizations are turning to digital tools and AI-enabled systems for ESG reporting. Automated platforms can centralize ESG data, reduce duplication, and flag gaps against disclosure standards in real time. Some systems use natural language processing to scan corporate reports for alignment with frameworks like TCFD or ISSB, while others integrate directly with enterprise resource planning (ERP) systems to pull emissions and financial data at the source. Some are leveraging agentic AI for more comprehensive ESG research. The result is faster reporting, stronger assurance, and fewer compliance headaches.
The Deloitte-Fletcher School highlights that companies that invest in robust ESG systems, governance, and transparency are better positioned to earn investor trust and unlock capital. Beyond compliance, these tools also open the door to deeper insights, identifying hotspots in supply chains, stress-testing resilience under climate scenarios, and modeling the financial impact of different transition strategies.
Manifest Climate’s platform is built to solve the challenges ESG teams face when assessing disclosure compliance manually. It scans disclosures against evolving frameworks, highlights gaps, and offers clear recommendations, saving ESG teams time and reducing risk. Clients like Ceres and leading technology firms have used the platform to make sense of complex data, simplify compliance, and free up time for strategic work.
| Case study: a leading technology company A global technology firm needed to comply with multiple ESG frameworks while managing disclosure expectations from regulators, investors, and customers. Its ESG team was drowning in manual work, spending hundreds of hours compiling data from different departments and struggling to maintain accuracy across overlapping requirements. Using Manifest Climate, the company automated much of its disclosure preparation. The platform benchmarked the firm’s reporting against peers, flagged inconsistencies, and suggested clear actions to align with evolving frameworks like CSRD and ISSB.T he result was a dramatic reduction in reporting complexity. The ESG team cut preparation time by weeks, reduced the risk of errors, and gained more bandwidth to focus on strategy. Investors and stakeholders received disclosures that were not only compliant but also more credible and forward-looking. [READ MORE] |
Stay ahead of sustainability trends with Manifest Climate
These shifts may feel intense, but they also create opportunities. Proactive ESG teams that embrace them can craft stronger, future-ready disclosures, earning credibility with investors, regulators, and communities.
Think of these trends as a checklist:
- Regulatory demands are rising
- Investors expect sharper risk transparency
- Nature and biodiversity are entering the spotlight
- Climate strategy is becoming central to business plans
- AI and digital tools are transforming reporting
Manifest Climate helps you stay ahead by tracking changing standards, benchmarking against peers, and strengthening disclosures with confidence.
Ready to turn complexity into clarity?
Book a demo today and see how Manifest Climate can support your ESG journey.
