From Laggards to Leaders for the third year in a row – what did we learn in 2024?

Every year Ever hosts, together with the London Stock Exchange Group, a discussion on the state of the nation of the sustainability landscape – what do sustainability professionals need to be thinking about over the holidays to help them gear up for next year?

The sustainability landscape is evolving rapidly as businesses grapple with new challenges, regulations and opportunities. Spoiler alert: this discussion did cover regulations…

1. Value Chain Innovation: The Next Big Shift

In 2025, the sustainability approach to the value chain will take centre stage. Companies are increasingly visualising, sharing and mapping stakeholders within their value chains to identify sustainability risks and opportunities. This process is driven not only by evolving regulatory requirements but also by the business imperative to enhance resilience and continuity.

As Adrian Rimmer, our host, pointed out, regulations like the EU's Corporate Sustainability Reporting Directive (CSRD) are pushing companies to go deeper into understanding their value chains. The CSRD's far-reaching implications will extend globally, affecting 10,300 non-EU companies. To break this down:

• 43% of impacted companies are domiciled in North America;
• 10% are based in the UK; and
• 8% operate out of Japan.

2. Communicating Sustainability Effectively

External communication of sustainability strategies is the next major consideration, particularly as frameworks like CSRD drive comparability across sectors. With sustainability reporting increasingly folded into annual reports, companies must stand out by telling their sustainability stories compellingly.

The challenge lies in differentiating content. When regulations set a baseline, how can businesses communicate their unique strategies, ambitions and results in a way that captivates diverse stakeholders? 

Two favourites of ours are:

• Arla¸which offers an excellent example of engaging sustainability reporting. Its use of intuitive graphics and alignment with the report's overall flow makes Arla’s content accessible and impactful.
• ABN AMRO, which provides another standout case with its separate Impact Report, quantifying how the bank creates value for stakeholder groups while linking material topics to its corporate strategy.

By zooming out from a narrow compliance focus, businesses can achieve mutual ambition and deliver more impactful reporting suites. For companies navigating this, our approach includes long-term intervention workshops, like our Future of Reporting sessions, which help internal stakeholders align on a one, three, and five-year vision. Want to know more?

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3. Navigating Regulatory Frameworks: CSRD, ISSB and TCFD

The sustainability reporting landscape can feel like a maze. While frameworks like TCFD introduced overarching principles for strategy, governance, risk management and metrics, CSRD demands significantly more detail. Policymakers are now taking steps to streamline requirements across CSRD, the EU Taxonomy and the Corporate Sustainability Due Diligence Directive (CSDDD).

The Budapest Declaration estimates this streamlining could reduce reporting burdens by 25%, but the substance of what companies must disclose remains unchanged. Businesses must recognise that:

• double materiality is central to CSRD, requiring companies to assess both financial materiality and environmental/social impacts;
• getting ahead on compliance will minimise last-minute stress and spread the workload over time; and
• sustainability reporting, far from being a burden, can drive strategic alignment, better stakeholder engagement and deeper business insights.

Companies that proactively align their business strategies and reporting requirements will ultimately gain a competitive edge. Delaying the process will only make compliance more complex down the road.

4. Emerging Focus Areas: Nature, Biodiversity and Beyond

Companies are increasingly prioritising key areas like biodiversity, water management and indigenous rights. Tools like ENCORE and frameworks like the Natural Capital Protocol help businesses assess their impacts across ecosystems. Over time, a reassessment of topics such as animal welfare may also emerge.

Final Thoughts: Sustainability as a Competitive Advantage

Sustainability reporting and strategy are undergoing a transformative phase. As businesses face regulatory demands and stakeholder expectations, those that embrace sustainability as a strategic opportunity will emerge as leaders. By aligning reporting processes with business strategy, communicating stories compellingly and embedding sustainability into corporate culture, companies can differentiate themselves and build long-term resilience.

Image sourced from Unsplash