Regulators may have hit pause, but the market hasn’t.
May 2025 brought a raft of ESG developments across the EU, US, and global standard-setters. And while policymakers offered breathing room through regulatory delays, market forces are doing the opposite. Expectations from investors, supply chain partners, and auditors continue to rise. Here’s what companies need to know.
1. CSRD & CSDDD Postponed – But Not Forgotten
In April, the EU approved a two-year delay for key elements of the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). Large companies will now begin reporting in 2028, listed SMEs in 2029. These measures are designed to ease administrative pressure, with an estimated €6 billion saved in compliance costs.
But most companies aren’t taking this as an invitation to slow down. Voluntary alignment with the European Sustainability Reporting Standards (ESRS) is continuing. Investor expectations, stakeholder scrutiny, and procurement requirements are keeping the pressure on. Companies already working towards CSRD compliance are likely to continue their efforts, knowing this preparation will offer a long-term advantage.
2. Scope 3 Reporting: Still the Hardest Piece
Early CSRD reports—many of them published voluntarily—are already revealing where the real pain points lie. Scope 3 emissions remain the most difficult element to get right. Most companies are focusing on selected categories like purchased goods and services, while leaving large parts of their value chain unaccounted for.
Auditors are flagging Scope 3 as a recurring weakness. Observations from limited assurance reviews highlight issues with:
- Gaps in supplier data
- Unclear methodology
- Inconsistent materiality thresholds
Despite this, over 90% of early CSRD reporters opted for limited assurance, often with their existing financial auditors. The message is clear: Scope 3 isn’t optional anymore. It’s essential, and under the spotlight.
3. Standards Still Not Fully Aligned
Despite calls for simplification, the European Financial Reporting Advisory Group (EFRAG) voted down its internal work plan to revise ESRS in May. Meanwhile, EFRAG and CDP published a new mapping between ESRS E1 and CDP climate disclosures, offering a partial fix to the reporting overlap.
Efforts to reduce reporting fatigue are in motion, but they’re not enough to remove the complexity in the short term. Most companies will still need to navigate multiple frameworks, definitions, and formats. A consistent internal data foundation has been the best defence.
4. SEC Rule Delayed – But Market Expectations Are Clear
In the United States, the SEC’s climate disclosure rule is stuck in limbo. Legal proceedings have been paused, and the Commission has stepped back from defending the rule.
Yet the direction of travel hasn’t changed. Investors still expect climate disclosures, especially Scope 3. ISSB and EU requirements create pressure for multinational companies to align across markets. Even in the absence of a federal mandate, climate data is becoming a baseline expectation in M&A, investor relations, and procurement.
5. ISSB Implementation Gains Momentum
The IFRS Foundation released a Roadmap Tool in May to help national regulators plan their adoption of ISSB standards (S1 and S2). The tool offers flexible templates and implementation paths, reflecting different jurisdictional needs.
This will likely increase the number of markets requiring ISSB-aligned disclosures. Multinationals should anticipate more pressure to provide consistent, decision-useful ESG data across borders.
What Forward-Looking Companies Are Doing
- Improving Scope 3 data systems – working directly with suppliers and narrowing gaps in critical categories.
- Aligning sustainability and finance teams – integrating ESG metrics into core business processes.
- Creating repeatable double materiality assessments – with documented methodologies that withstand audit scrutiny.
- Running assurance pilots – to test systems and processes before formal requirements kick in.
- Building cross-standard reporting capacity – with shared data structures across ESRS, ISSB, GRI and SASB.
Kinver's Take
At Kinver, we believe in making compliance simple. We work with manufacturing, retail, and logistics leaders to:
- Create a proactive and accurate infrastructure for reporting
- Replace spreadsheets with structured, connected data
- Track freight emissions and costs at shipment level
- Automate version control and audit trails
- Give procurement, finance and sustainability teams access to the same verified figures
Reporting is all about control. As standards shift, companies need data they can trust.
Prepare Now, Win Later
The regulatory clock may have shifted, but audit scrutiny, market expectations, and investor demands have not. Delays in CSRD enforcement should be treated as time to act, not an excuse for inaction.
Use this time to fix Scope 3 gaps, refine your double materiality approach, and build a data foundation that works across jurisdictions. The companies that win won’t be the ones with the longest reports. They’ll be the ones with the cleanest numbers.
Need help getting on top of your Scope 3 data?
Book a free diagnostic with Kinver and we’ll help you map your reporting risks—and the fastest path to audit-ready data.
👉 Book Your Free Scope 3 Data Audit
