PwC Q&A: Sustainability Regulations Around the World

Sustainable business has tonnes of benefits – from cost savings to improved brand reputation, it should be on the mind of leaders across industries.

What’s more, regulations are now starting to require a focus on sustainability.

PwC is one of the largest multinational professional services networks in the world, serving clients across various sectors including financial services, healthcare, technology, energy and government. 

Kevin O’Connell is PwC’s US Sustainability Assurance Services Leader, supporting a talented team dedicated to helping organisations navigate the evolving landscape of ESG reporting. 

He helps businesses to meet these regulatory requirements whilst driving sustainable value. 

Kevin shares his expertise with Sustainability Magazine.

What does your role as US Sustainability Assurances Services Leader involve?

A key part of my role involves helping companies transition to tech-enabled reporting that fosters informed decision-making, enhances operational efficiency and drives strategic progress.

If we step back, what we are all witnessing is a fundamental re-wiring of capital markets that enables better investment decisions based on more complete and comparable information about companies, their business models and financial performance.

PwC is a values-led, purpose-driven organisation and we can’t imagine anything more directly aligned with our purpose of solving important problems and building trust in society.

By integrating sustainability and financial data, businesses can strengthen their cohesive narrative about how they create value and provide the transparency expected by stakeholders. This alignment not only supports compliance with evolving regulations like CSRD but also enables corporate reporting to reflect the business transformation we are seeing as companies connect their sustainability efforts with broader strategic goals. 

Leveraging advanced technologies such as AI and data analytics, we help organizations build strong reporting capabilities that enhance data accuracy, improve efficiency and provide real-time insights, enabling them to measure their performance and communicate their progress with transparency and confidence.

What challenges do CSRD requirements pose to organisations? 

As with any regulation, there are good intentions and practical realities when it comes to implementation. CSRD requirements were largely developed with EU companies in mind, but they extend to a broader set of global companies because of a focus on legal entities.

Because of this, many of our clients are spending an enormous amount of time evaluating their legal entity structures, aligning on a reporting approach and trying to navigate ambiguity for non-EU companies. Perhaps the most basic example of this is that the CSRD requires the Sustainability Statement to be included in a “management report,” a concept that does not exist in the US.

One of the biggest challenges organisations face with CSRD requirements is the sheer scale of change they demand, especially with the introduction of double materiality and the breadth of topics covered in the ESRS. Companies will need to assess not only how sustainability issues impact their financial performance (financial materiality) but also how their operations impact the environment and society (impact materiality). This dual focus requires a significant shift in mindset and a deeper understanding of their value chains, including data on value-chain emissions, biodiversity impacts and more.

Navigating these new expectations for transparency means collecting and verifying data that may not have been tracked before. Establishing controls and verifying the accuracy of this data is another hurdle.

CSRD also challenges companies to align sustainability reporting with their broader financial and business strategies, requiring them to integrate these efforts into core decision-making processes. EU regulators would like to transform the way companies think and operate through their compliance with reporting obligations.

How can organisations tackle these challenges? 

Organisations can address CSRD challenges by prioritising data quality, fostering cross-functional collaboration and adopting a phased approach to ESG reporting. A critical component of this effort is rigorous, independent third-party assurance over sustainability information, which can enhance trust among investors and stakeholders by verifying the accuracy and credibility of reported metrics.

The ESG Controller can also play an important role in fostering accurate, transparent reporting by enhancing data quality analysis and aligning efforts across finance, HR, IT and operations. This collaboration is critical, as ESG reporting is no longer confined to one team—CFOs, CSOs, CIOs, CTOs and COOs all contribute. For example, the ESG Controller aims to support CIOs and CTOs in managing reliable data systems and help COOs reduce energy use and manage carbon impact, supporting alignment to meet CSRD requirements.

A phased approach is equally important. Starting with measurable data allows organisations to build momentum and continuously enhance their compliance and reporting processes over time. By embedding sustainability into their core strategies and fostering collaboration across functions, companies meet both regulatory obligations and create long-term value, driving resilience and progress while navigating the evolving reporting landscape.

What role does data collection play in managing CSRD requirements? 

Data collection is at the heart of managing CSRD requirements, as the directive specifically emphasises the need for reliable and comprehensive data to support disclosures across all areas of ESG.

Some of our clients have estimated that gathering, managing and controlling the data is 70% of the effort for CSRD. In ESG reporting, having a deep and thorough understanding of your organisation’s operations is invaluable. It’s essential for leadership to develop and deploy systems that autonomously aggregate and analyse data.

These systems not only improve the credibility of reported metrics but also provide a solid foundation for compliance.

CSRD goes beyond direct operations, requiring companies to account for indirect relationships across their value chain. This expanded scope can be one of the more challenging aspects of the reporting process, but it ultimately leads to stronger relationships and a more comprehensive understanding of a company’s impact. With this deeper insight, leadership can drive meaningful improvements that align with business strategy and regulatory expectations.

Technology like AI and automated workflows can further enhance data quality and streamline the process, helping organisations meet CSRD requirements with confidence. In essence, comprehensive data collection is the foundation for compliance and for building resilience, driving value and enabling meaningful action.

How can CSRD compliance support organisations? 

With sustainability data becoming increasingly integral to decision-making, CSRD-compliant disclosures allow organizations to demonstrate how they create value for both their business and society. The directive’s emphasis on structured and integrated reporting practices seeks to enhance the accuracy, reliability and comparability of disclosures.

While we recognise that compliance can be challenging, we're hopeful that the integration effort today will enable connected insights in the future.

How could regulations around the world affect business?

The transformation of ESG reporting is accelerating worldwide, with new requirements and regulations emerging across regions and countries. In the US, while the SEC’s proposed climate disclosure rules remain on hold, state-level legislation, like California’s Climate Accountability Act, is moving forward. These efforts, combined with international requirements like the CSRD, underscore the urgent need for businesses to adapt quickly and remain committed to progress.

Organisations operating in or engaging with the EU will need to align with the CSRD’s standards, including mandatory assurance, detailed value chain disclosures and double materiality. These requirements will proceed regardless of US legislation or broader market dynamics, making preparation important for maintaining global competitiveness.

California’s regulations highlight how state-level action is setting a precedent for climate accountability that could influence broader US and international standards. By embracing these requirements as more than just compliance obligations, businesses can leverage their reporting outputs to enhance operations, uncover efficiencies and position themselves as leaders in sustainable growth —all while staying resilient in a shifting regulatory landscape.

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