Europe’s Sustainability Reset: Simplification is Not a Reason to Slow Down

Guest post by: Stefan Premer, Senior Director, Corporate Sustainability Consulting at Sphera

For businesses globally, the sustainability conversation is moving on. After years of preparing for new disclosure requirements, the focus is increasingly on what sustainability can deliver for the business, from strengthening resilience and managing risk to improving how companies operate and grow.

That shift matters as Europe resets its sustainability framework. Following much debate, recent changes to the ESRS and the phased implementation of the CSDDD are giving businesses greater clarity on where to focus their efforts.

Research suggests that this shift is already underway. As the current state of market research[1] shows, integrating sustainability into business strategy, operations and product portfolios is now among the leading priorities for sustainability executives, ahead of producing disclosures and external communications.

Businesses are increasingly looking to sustainability investment to strengthen resilience, reduce risk, improve operational efficiency and deliver financial returns. This reflects a broader move from sustainability as a compliance function towards sustainability as a driver of competitiveness and value creation.

Our own research points in the same direction, with 66% of organisations increasing efforts on supply-chain transparency and risk management, up from 53% last year, while investment in sustainability and risk management software has risen from 19% to 36%. Meanwhile, just 5% are waiting for further regulatory clarity before acting, down from 12%.

But this shift in priorities does not mean the fundamentals of reporting are firmly in place. A heavily cited meta-study[2] analysing more than 15,000 sustainability disclosure documents found that, as reporting became more widespread, average reports became less specific, less quantitative and more promotional. More reporting does not automatically mean better reporting, and simplified reporting will not automatically make the underlying task easier.

The opportunity now is to use greater regulatory clarity to strengthen those foundations while putting sustainability to work across the organisation, embedding it more deeply into operations and supporting long-term value creation, rather than centring efforts on disclosure alone.

Lighter reporting does not mean lighter implementation

Regulatory simplification was never going to mean regulatory disappearance. The EU’s 2026 changes narrowed the scope of sustainability reporting requirements and reduced some reporting and due diligence burdens. But companies should not mistake this for a reason to lighten implementation efforts or assume that the task of building and managing programmes around issues such as climate, circularity and social impacts has become any simpler. Businesses still need visibility of their emissions, their supply chains and their risk exposure.

Less detailed requirements do not reduce the work involved in turning sustainability commitments into action. Businesses also need a clear understanding of the sustainability issues relevant to their own operations and downstream activities, how those issues apply in the organisation’s context and how they relate to value. Building the systems to set targets, implement programmes and track progress against them therefore remains a significant undertaking.

Companies that respond to regulatory simplification by under-investing in these capabilities risk weakening the very foundations they need to manage sustainability effectively and create value from it.

Real impact starts with good disclosure

Building reporting capabilities creates value that extends well beyond the disclosure itself. Done well, reporting provides the information businesses need to identify where action and investment can have the greatest impact. More transparent supply-chain information can flag vulnerabilities before they disrupt operations. Better emissions and resource data can expose inefficiencies that would otherwise go unnoticed.

Credible disclosure, however, needs substance behind it. That means emissions reductions that can be measured, supplier risks that are actively managed, resources being used more efficiently and sustainability considerations influencing real business decisions.

Our survey found that 42% of organisations are improving ESRS data collection, 37% are training internal teams and 36% are investing in sustainability or risk management software. Those investments provide the infrastructure businesses need to turn sustainability data into operational insight and action. That requires consistent definitions, clear ownership of data, controls that can withstand audit and systems capable of tracing information back to its source.

Patchwork data flows work when reporting requirements are limited. However, they grow fragile as organisations try to combine environmental, social and governance data, spanning impacts, risks and dependencies, across their own operations and value chain. Companies trying to meet increasingly sophisticated reporting and due diligence expectations need more than new systems: they need a data governance model and a clear future-state vision, built on a proper data functional analysis that consolidates the patchwork of systems already in place so they can be used effectively and efficiently. Operationalising sustainability means connecting this information to decisions across procurement, operations, finance and risk: putting the data to work, not just collecting it.

Europe’s reset is an implementation window

The biggest mistake businesses could make now is to overlook the value which practicing sustainability unlocks, beyond mere disclosure. Regulatory frameworks will continue to evolve. There will be further guidance and amendments. Companies that wait for every requirement to be permanently settled risk losing valuable time.

Nor should the breathing room created by simplification be used simply to become more efficient at reporting. It creates an opportunity to embed sustainability more deeply into business strategy and day-to-day operations.

Companies can use this current period of relative clarity to strengthen the foundations. Improve data quality, strengthen governance, train teams and implement meaningful supplier visibility. These are capabilities that remain valuable even as individual rules evolve.

Ultimately, success means making sustainability part of how the business operates and makes decisions. Europe’s sustainability reset gives companies more space to do exactly that, and they should use it.

[1] https://www.verdantix.com/venture/report/global-corporate-survey-2026–sustainability-budgets–priorities-and-tech-preferences

[2] https://corpgov.law.harvard.edu/2026/07/20/what-sustainability-disclosures-actually-disclose/