How compliance informs competitiveness in 2025
1. The essential ESG KPIs — and their financial parallels
Meanwhile, new developments like the EU Omnibus proposal are reshaping the compliance horizon. Some companies may face reduced requirements, lighter reporting formats, or even removal from scope altogether. At first glance, that might sound like good news. But in reality, it creates a new temptation: the temptation to slow down.
The problem is that pausing momentum comes with hidden costs. Companies that ease off their sustainability efforts risk losing credibility with stakeholders, creating gaps in their data, and being caught off guard when the regulatory pendulum swings back, as it inevitably will.
Sustainability has outgrown its compliance roots. Today, it is fundamentally about long-term competitiveness, resilience, and trust.
Why sustainability momentum matters
Even if your company’s reporting obligations change, the drivers of ESG action remain the same. Stakeholders are not waiting for regulations to tell them what to demand.
- Investors and lenders continue to assess companies through the lens of sustainability, linking access to capital to ESG performance.
- Customers and supply chains are setting stricter expectations, embedding ESG criteria into procurement and contracts.
- Employees expect diversity, wellbeing, and purpose to be more than words on a page — they want to see proof in practice.
- Climate and social risks are intensifying, threatening operations, reputation, and long-term growth.
These forces don’t disappear because a reporting obligation changes. If anything, they intensify. And that is why sustainability remains one of the few areas where waiting on the sidelines is more dangerous than moving forward.
The business case: four levers of value
Sustainability strengthens the very foundations of business success. A useful way to see this is through the four levers where sustainability consistently delivers value:
| Business lever | How sustainability creates value | Why it matters beyond compliance |
| Increase revenue | Enables product innovation, market expansion, and premium positioning | Helps companies capture new growth opportunities and maintain competitiveness in evolving markets |
| Increase intangible assets | Builds trust, brand equity, employee engagement, and access to capital | Strengthens reputation, attracts and retains top talent, and meets investor expectations |
| Reduce cost | Drives resource efficiency, reduces waste, and optimises supply chains | Delivers measurable savings while building operational resilience |
| Reduce risk | Identifies and mitigates financial, operational, reputational, and regulatory risks | Protects long-term stability and ensures credibility with stakeholders |
Taken together, these levers show that sustainability is not an add-on — it is embedded in the core of business strategy. Companies that invest in these areas today are positioning themselves not just to survive regulatory changes, but to thrive in spite of them.
Foundational activities: the double materiality advantage
One of the most important tools in this process is the double materiality assessment (DMA). It is often misunderstood as simply a compliance requirement — a checklist item for CSRD. But in reality, a DMA is much more powerful.
A robust DMA gives companies a clearer picture of their assets, exposure, risks, and opportunities. It answers questions that are fundamental to long-term business health:
- Which environmental or social issues could materially impact financial performance?
- Where are the company’s greatest vulnerabilities to external shocks?
- Which sustainability topics matter most to stakeholders, and why?
- Where are the biggest opportunities for innovation and growth?
- What are the negative impacts that I may uncover?
For companies already experienced in ESG reporting, the DMA serves as a “living process” — regularly refreshed to reflect shifting priorities and emerging risks. For companies just starting out, it provides a no-regret entry point: a structured way to connect sustainability ambition to business value.
How DMA insights link to business value
When acted upon, the results of a DMA cascade directly into the four business levers:
| Business lever | DMA Insight | Practical impact |
| Increase revenue | Surfaces sustainability-driven market opportunities | Guides product and service innovation; informs expansion into new markets |
| Increase intangible assets | Highlights ESG issues that matter most to stakeholders | Strengthens brand trust, reputation, and access to capital |
| Reduce cost | Identifies inefficiencies in operations and supply chains | Targets resource optimisation and reduces operational waste |
| Reduce risk | Maps interconnected ESG risks across financial, operational, and reputational dimensions | Enhances resilience and informs strategic risk mitigation |
This is why foundational activities matter: they create clarity. A DMA transforms sustainability from a reporting burden into a strategic compass, pointing companies toward where they can grow, protect, and future-proof their business.
The safest choice? Keep moving
In 2025, the safest strategic choice is not to wait. Companies that keep building their sustainability capabilities will:
- Protect progress by avoiding disruption and data gaps.
- Preserve flexibility by being ready to pivot when regulations change again.
- Stay aligned with markets where expectations consistently outpace minimum compliance.
Sustainability is no longer a compliance exercise. It is a driver of competitiveness, a safeguard against risk, and a source of resilience and growth.
The bottom line: even without CSRD obligations, sustainability remains one of the most decisive factors in a company’s long-term success. Companies that act now will be the ones best prepared for whatever comes next.
Chat with us
Agneta Påander
Director
Position Green
