ESG Reporting Frameworks in 2025 What You Need to Know for Compliance

With the increased focus on Sustainable business operations around the globe, businesses are increasingly looking to invest to strengthen their environmental, social, and governance practices. Whilst ESG-based reporting would earlier be considered a voluntary initiative it is now becoming commonplace for businesses around the world to not only build processes and systems around ESG reporting but also make fundamental shifts in how they run their operations to disclose their ESG performance. Various ESG reporting frameworks are going to drive decisions for businesses in 2025 to stay compliant and sustainable.

The way the ESG reporting frameworks work is by providing key pointers that help to form guidelines within an organization to collect, analyze, report, and take key management decisions related to environmental, social, and governance impact. The key purpose of these frameworks is to ensure a consistent, transparent, and standardized set of processes and systems for ESG compliance. Typically, the ESG reporting frameworks cover the following areas:

• Environmental factors related to emissions, waste management resource usage and overall externalities imposed on the environment.
• Social aspects include inclusion diversity, labour management and overall stakeholder engagement.
• Governance issues include free and fair opportunity compensation, anti-corruption, and corporate management.

Various factors make 2025 an important year for ESG reporting across the globe. Whilst various regulators and governments are moving towards enforcing more stringent and binding ESG disclosure norms, there seems to be a certain standardization developing around how ESG reporting should be run in terms of the key areas to measure, monitor, and report. In addition, various stakeholders such as different employees, investors, management, and governing bodies are pressing for increased transparency in how companies run their operations to align with global sustainability objectives. This can further be coupled with the various advances that have been made in areas of data collection covering analytics automation integration and overall reporting.

Several industry-standard ESG reporting frameworks are going to become important for ESG compliance in 2025; however, there is a subtle difference underlying each of the frameworks which helps to determine their applicability for individual businesses. Depending on the business need, organizations can choose from GRI, SASB, TCFD, etc.

• Global reporting initiative (GRI): This framework is broad spectrum and covers a range of businesses and their impacts on their economic, environmental and social parameters. The key focus of the framework is on inclusivity and stakeholder management.
• Sustainability Accounting Standards Board (SASB): This typically focuses on sector-specific businesses and sets out sustainability reporting frameworks related to material financial impact in their respective areas. Often publicly traded companies that have public domain disclosures use this framework, which includes specific metrics that are tailor-made to various industries.
• Task force on climate-related financial disclosures (TCFD): The key focus area for this framework is environment-related risks and their impact on financial areas. For companies that have medium to high risks in terms of climate and environment, this framework is appropriate to use with its adequate emphasis on strategy governance and metrics.
• Corporate sustainability reporting directive open brackets (CSRD): For companies operating within the EU region, this framework is highly recommended and is followed by various SMEs, and listed companies and is widely accepted. It is also in alignment with European sustainability reporting standards.

Some of the key updates to ESG reporting frameworks in 2025 include the dynamically evolving reporting landscape and various advances that are being made in these specific frameworks.

• The GRI framework is expanding sector-specific standards offering highly tailored guidance for underlying companies.
• The SSB standard is attempting to create a standardized and uniform global baseline that will direct sustainability disclosures.
• The TCFD framework is fast working towards including more metrics for various scenarios and further quantification of climate risks.
• The CSRD is further making European Union-based disclosures more pointed and material through their impact and risk assessment.

Various steps can be taken to ensure ESG compliance in 2025:

• To begin with, an organization must conduct a detailed analysis of the as-is ESG practices to identify the key areas of gaps and potential solutions to address the same.
• Next, the management must then consider appropriate investments towards adopting ESG management software to streamline, automate, and scale data collection analysis and reporting practices.
• The next step is to drive engagement among the various stakeholders both internal and external to the organization to ensure that the ESG reporting is aligned with the overall stakeholder expectations.
• In order to ensure smooth change management, adequate training on the ESG frameworks and the behavioral shifts should be conducted by the management. This will help in addressing compliance requirements and ensure that adequate operationalization is done to achieve the desired ESG goals.
• The final step is to ensure that any regulatory changes are closely monitored and factored into the organizations’ change management programs to adjust the overall reporting standards and deliver real-time ESG insights.

Beyond 2025 ESG reporting is envisaged to become standardized, interoperable, integrated, and driving greater value. This includes the efforts that are being made across the globe to harmonize various standards that are already in place and to create a global body that drives the overall practices related to ESG. At the core, developments in technology are set to power ESG initiatives through AI, blockchain, and other value-added tools. In addition, stakeholders are expected to work with each other in a more seamless and connected environment which not only ensures compliance to the ESG goals but also drives lasting value.

In 2025 the ESG reporting landscape is set to become more vibrant and pack in greater opportunities for various businesses. By incorporating developments related to regulatory changes and investing in technology organizations can ensure compliance and build a strong foundation for collaborating among these stakeholders. While the ESG journey is not a one-time initiative and is meant to be an ongoing journey to drive environmental, sustainable, and governance goals, the stage is set for uniform adoption and reporting at scale in the coming year.

Whilst GRI is a broader spectrum in nature, SSB is sector-specific in terms of the material ESG issues for investors. TCFD on the other hand is focused on climate-related impacts and risk.

Various businesses including SMEs and publicly traded large businesses that drive significant value for their stakeholders need to adopt ESG disclosures to win trust drive compliance and appear sustainability-focused in the eyes of both the public and regulators.

Many key regions within the European Union and even some parts of Asia Pacific are mandating ESG-related compliance and reporting. As such while there is still some way to go in terms of global mandates the overall expectation is that businesses will increasingly onboard the ESG reporting journey.