Sustainability Reports – are they Dying or Evolving?

Anybody working in sustainability knows that 2025 has been a bumpy ride.

The inauguration of US President Donald Trump was followed by intense pressure on companies to ditch DEI policies – and a renewed focus on oil and gas in the US.

For some, ‘sustainability’ has become a four-letter word. And that seemed to be supported by a 52% fall in the number of sustainability reports published in H1 by the 3,000 largest US companies.

During this period, 432 companies in the Russell 3000 index filed a sustainability report, according to The Conference Board. 

That is a 52% drop compared to the same period in 2024, when 831 companies had done so.

Adobe, GM, Citi and Uber were among those delaying their sustainability report publication amid regulatory and political shifts.

A ‘strategic recalibration’?

Issuing annual sustainability reports has become a well-established practice for corporates, enabling transparency around ESG performance. 

Yet, in the first half of 2025, US public companies showed a sharp decline in voluntary sustainability filings, marking a change in ESG communications strategy.

However, experts are not interpreting this as a mass withdrawal from ESG principles. Instead, it is being described as a “strategic recalibration”.

“There’s been such a shift this year in the US,” Andrew Jones, Principal Researcher at the Conference Board’s Governance and Sustainability Center, told Trellis.

“The new administration has a very different kind of mandate when it comes to climate change and environmental issues and DEI.

"That has introduced new risk dynamics.”

Al Iannuzzi, VP Sustainability Estée Lauder Companies, asks: “Should companies move away from their sustainability commitments?

“In a time when ESG frameworks are under increasing scrutiny—particularly in the US— some companies are doubling down on their commitments.

“I am proud that at The Estée Lauder Companies, we are still behind our commitments and are reporting on our progress in our annual sustainability report.”

He does, however, believe that the “more politicised” landscape demands a switch from “superficial” to “embedded and measurable”.

Al says: “As my colleague Julian Cran put it: ‘Sustainability becomes less about storytelling and more about how decisions ripple across supply chains, stakeholder trust and long-term resilience’.

“And as ESG language becomes more politicised, the value lies in embedded, measurable outcomes—not just in branding.

“Superficial ESG language is fading, while operationally embedded practices persist.”

Policy shifts and pressure

Much of the slowdown can be attributed to the complex, and shifting, global regulatory landscape. 

In particular, the European Union’s Corporate Sustainability Reporting Directive (CSRD) and California’s climate disclosure laws (SB 253 and SB 261) are set to take effect in the next 12–24 months. 

Many firms are delaying voluntary reports while they assess how to comply with these mandatory frameworks.

The evolving policy environment in the US is also contributing to the pause. 

Recent federal-level changes in climate, energy and disclosure regulation have raised the legal and reputational stakes for ESG statements.

Companies, particularly in politically charged sectors, are adopting more cautious language and are subjecting their disclosures to more rigorous legal and compliance reviews.

Charlene Lake, who retired as Chief Sustainability Officer at AT&T in July, believes reporting will remain central to the success of businesses.

“Social and environment initiatives that are tied to the success of your business will continue to be in demand by stakeholders,” she says.

“As long as a company continues to focus on that, it does not matter which administration is in place because you are delivering work and impact that is important to the success of your company. History has proven that.”

The integration trend

A survey in May 2025 of 125 ESG executives by The Conference Board showed that climate communication is especially under scrutiny.

As a result, organisations are reassessing the tone and content of their reports, often shifting towards risk-based, financially material disclosures instead of broader aspirational narratives.

Another emerging trend is the integration of ESG into mainstream financial reporting. 

Some companies are opting to embed ESG metrics and commentary into filings, investor presentations or earnings calls rather than publishing separate sustainability reports. 

This change, driven in part by investor fatigue with boilerplate sustainability content, could reflect a pivot towards data that directly links ESG to financial performance and risk.

Rather than abandoning sustainability efforts, the trend appears to be towards companies prioritising relevance, materiality and strategic alignment. 

This, which is supported by Sophia Leonora Mendelsohn, Chief Sustainability and Commercial Officer at SAP, may ultimately drive better quality disclosures that serve investor needs more effectively.

Sophia says: “We have been talking about business transformation for a very long time. Now we are owning our own P&L and contributing to our colleagues’ P&Ls.”

The future of reporting

Andrew does not believe that the importance of sustainability reporting has diminished. He says: "While a temporary pause in voluntary reporting may be warranted, sustainability disclosures remain essential: customers, employees, investors, communities and suppliers continue to depend on them, regardless of regulatory mandates."

He adds:​ "In this context, companies have an opportunity to sharpen the strategic purpose of reporting and enhance internal governance, data quality and cross-functional coordination ahead of emerging requirements.

"As sustainability reporting evolves into a regulated, risk-managed function, firms that align early with business priorities, legal obligations and material risks will be best positioned to lead."

In this moment of ESG evolution, companies are being urged to focus on the long game: resilience, accountability and impact – across every link of the value chain. 

Emilio Tenuta, Chief Sustainability Officer at Ecolab, says: “CSOs must adopt a dual approach that balances regulatory compliance with strategic innovation and growth.

“By integrating sustainability into the core business strategy and fostering cross-functional collaboration, CSOs can turn regulatory challenges into opportunities for long-term value creation and growth.

“Embracing this evolved role will enable CSOs to lead their organisation toward a sustainable and resilient future.”