Investors’ expectations in 2025 – Key ESG reporting requirements

The investor landscape in 2025: New rules, new expectations

By 2025, the ESG reporting landscape has fundamentally changed. Investors are no longer satisfied with high-level intentions or sustainability narratives. Instead, they demand structured, transparent, and financially relevant disclosures. ESG reporting is no longer about storytelling, it’s about business intelligence.

Why the shift?

• Regulatory pressure: Investors must now comply with stricter disclosure mandates, such as CSRD, ESRS, SFDR and ISSB.
• Climate volatility: Physical and transition risks directly threaten asset performance.
• Investor scrutiny: Institutional investors themselves are being held accountable for ESG risks in their portfolios.

In this new environment, companies are expected to treat ESG data as integral to everyday financial management—not just an annual reporting obligation. The ability to quantify and explain ESG risks and opportunities is now a baseline requirement for maintaining investor trust.

ESG reporting as a right to play and a path to value

For many companies, ESG reporting is no longer optional; it’s a right to play. Public tenders, supplier contracts, and even private procurement processes increasingly include ESG data requirements. If you can’t report on your emissions, social impact, or governance practices, you’re unlikely to qualify. Without credible ESG data, businesses risk exclusion from key markets, loss of major clients, and disqualification from sustainable finance opportunities. Simply put, ESG reporting has become an operational necessity to stay in the game.

But reporting also drives value creation. Investors are actively looking for ESG signals that point to business resilience, innovation, and long-term profitability. ESG data helps them assess how well a company is positioned for regulatory shifts, resource constraints, and reputational risks. Companies that can show a clear link between sustainability initiatives and financial outcomes—whether through cost savings, risk mitigation, or revenue growth—are more attractive investment targets. In this sense, ESG data isn’t just about compliance; it’s about elevating the company’s value in the eyes of the market.

What investors want to see in your ESG disclosures

To build credibility with investors in 2025, ESG disclosures must be:

1. Material and business-relevant

Investors want insight into ESG risks and opportunities that materially affect your business—such as transition risks (e.g., carbon pricing), physical risks (e.g., extreme weather), supply chain vulnerabilities, and workforce stability. Generic sustainability goals no longer suffice.

2. Comparable and standardized

Disclosures must be benchmarkable. That means using consistent definitions, methods, and reporting structures aligned with recognized frameworks like CSRD, ESRS, and ISSB. Without this, investors cannot compare performance or allocate capital effectively.

3. Financially integrated

Sustainability data must sit alongside financial data—not buried in a separate PDF. Investors want ESG indicators tied to core metrics like margin impact, capital allocation efficiency, and long-term business resilience.

4. Forward-looking and scenario-based

Investors want to understand how your business might perform under different ESG-related conditions. Scenario-based modeling (e.g., carbon price stress tests, regulatory shifts, or supply chain disruptions) is now expected as standard.

The difference between boilerplate and smart ESG

Consider two businesses with similar profiles:

• Business A offers a lengthy sustainability report filled with generic activities like volunteering, tree planting, and net-zero pledges—none of which are clearly linked to business impact or operational risks.
• Business B begins with a double materiality assessment, identifies Scope 3 emissions in its upstream supply chain, and integrates ESG KPIs into procurement. It allocates capital toward emission mitigation, adopts internal carbon pricing, and provides scenario modeling and ROI projections.

The result? Investors favor Business B. Not because it “cares more,” but because it demonstrates how ESG actions de-risk operations, protect margins, and create long-term value. In contrast, Business A is perceived as performative, not strategic.

ESG maturity is now a credit indicator

Banks and financial institutions now embed ESG maturity into credit assessments. As such, ESG performance influences loan pricing, insurance terms, and access to capital.

This isn’t about marketing—it’s about risk management. For example:

• Companies electrifying fleets to preempt carbon taxes are viewed as lower-risk borrowers.
• Businesses that map water risk across production sites may qualify for favorable insurance or sustainability-linked loans.

In capital-intensive sectors, strong ESG integration can reduce financing costs and increase private equity interest. ESG maturity is now a proxy for financial foresight.

What not to do: Reporting blind spots that erode trust

Avoid these common pitfalls:

• Over-reporting: Long, unfocused reports filled with immaterial data reduce clarity and investor confidence.
• Under-reporting: Omitting key risks—such as carbon exposure or transition pathways—signals weak governance.
• Misalignment: Reporting ESG achievements unrelated to your business model (e.g., biodiversity in a fintech firm) appears disingenuous.

Focused, material disclosures that reflect real business risks are the new benchmark.

Building investor confidence: What to prioritize in 2025

To meet investor expectations in 2025, prioritize substance over style:

Start with double materiality

Companies need to start with Double Materiality because it helps them see the full picture—how sustainability issues affect their business, and how their business affects the world. It’s not just a reporting requirement; it’s the starting point for frameworks like CSRD, ESRS, GRI, and even influences ISSB, so it’s becoming the common language of ESG. But beyond compliance, a good Double Materiality Assessment helps you focus on what really matters and where you can make the biggest difference. Done well, it’s not a checkbox—it’s a tool for smarter decisions, stronger strategy, and more honest conversations with stakeholders.

Make your data traceable

Don’t leave investors with guesswork as to how your financial materiality, risk, and exposure have been measured. Provide a thorough paper trail and disclose what has been measured directly, as well as where you have used appropriate estimates.

Present sector-specific transition plans

Generic pledges won’t cut it. Investors want to see concrete timelines, KPIs, and roadmaps. A logistics firm, for example, should link fleet electrification to cost savings and procurement resilience.

Speak the language of finance

Use investor-centric terms like ROI, cost avoidance, risk-adjusted forecasts, and internal carbon pricing. Doing so helps investors integrate ESG into their financial modeling—and makes your business more investable.

Take action now

Want to make your ESG disclosures more investable?

Speaking the language of finance with your ESG data is a crucial step of this entire process, and naturally it means that you need to start finding where the ROI exists in your current ESG efforts.