With the world advancing toward an era of sustainability and ethical awareness, ESG compliance has now become the measure of a responsible business. By 2025, ESG compliance is no longer optional for doing business, an absolute necessity for securing investors' trust, brand reputability, and staying ahead of compliance.
To help professionals navigate changing times and their associated standards, the British Academy for Training and Development provides internationally recognised training courses in Environmental Management Standards ISO 14000. This programme provides the applicants with the instruments to implement global environmental policies within their companies, essentially one of the pillars of ESG compliance.
We will look at what makes a company ESG compliant in 2025, what sets the new appraisals apart, the current best practices, and the next steps for staying in line with modern sustainability standards.
What is ESG compliance?
Basically, Environmental, Social, and Governance (ESG) compliance represents a set of guidelines and standards set by a company in its internal policies demanded by regulatory bodies. A company being ESG compliant means respecting ESG principles and acting upon threefold:
An environmental aspect pertains to a company's impact on the environment and risk management efforts to minimise it. This includes all footprints – carbon, climate change, toxic chemicals in manufacturing, and sustainability matters throughout its business and supply chains. Social evaluates how the company contributes to the betterment of society and governs the relationships with all parties involved, such as employees, customers, stakeholders, suppliers, and communities in the company's sphere of operations. This consideration brings forth issues such as equity and racial diversity, LGBTQIA+ rights, work ethics, and programmes of inclusion – all of which fit into the broader social consideration of ESG.Whereas governance basically lays down everything related to the management styles and approaches of the company and how management implements and encourages changes for good. It covers executive remuneration, shareholder rights compliance, accountability, and internal control to enhance corporate transparency.Companies that achieved ESG compliance
Below are a few examples of international companies that have already committed to ESG in compliance strategies:
Microsoft: Microsoft has affirmed its reputation for strong performance in ESG matters and said it will be the leader in sustainability by becoming carbon negative by 2030; spending on energy-efficient technologies, renewable energy, and reduction of water consumption; as well as inclusion and diversity efforts. Unilever: It operates with an insignificant environmental footprint coupled with some community interventions. Their work consists of lessening the greenhouse gases which are emitted during the growing, harvesting, transporting, storing, and processing stages. Additionally, they raise the awareness of gender equality and lend support to small farmers.Natura & Co: One such company is the cosmetics brand Natura & Co., which is committed to bringing down its impact on the environment while actually engaging in a lot of social actions. It is trying to address climate change and also the Amazon rainforest preservation; empowering local communities and enhancing biodiversity are among its concerns. Additionally, the company has a proven record of good governance and transparency. Salesforce: Restoration of ecosystems, removals of carbon, and reductions of emissions are priorities at Salesforce. The firm has board portal software, which tracks and reports on its ESG performance. It collects and analyses ESG data in real time, thereby improving ESG reporting and transparency.What ways can companies make their operations ESG-compliant?
ESG compliance is an obligation now for a company and not really a trend, for the consequences of failure or poor conformity include high turnover in staff numbers, an unsteady channel of new applicants into a company, and fewer investors in the company. This can just ruin the reputation of a company in this time of society, focusing more on issues like the high carbon footprint, gender pay gap, unhealthy equality balance, and inappropriate waste disposal.
To become compliant with ESG, a company should decide what initiative to commit to and also get to understand such technicalities as how to prepare for ESG-emerging issues and how to build an ESG plan.
Key ESG trends set to redefine sustainability standards and compliance in 2025
As 2025 commences, the ESG landscape is destined to witness significant metamorphosis, heralding both challenges and opportunities for enterprises across the globe. Herein are the top five ESG trends for 2025.
1. Mandatory ESG Reporting Under CSRD
The Corporate Sustainability Reporting Directive has become enforceable, and this year marks the onset of the first sustainability report to be compulsory under it. The directive means that in addition to defining what constitutes materiality from an external perspective, firms will have to demonstrate and disclose how ESG matters impact the financial health of their businesses and society's and the environment's impacts of doing business for that organisation. Interestingly, the new CSRD goes further than that and beyond, affecting global supply chains and any business operating significantly in the EU market.
2. Tougher Chain Rules
The Corporate Sustainability Due Diligence Directive (CSDDD) and the coming Ecodesign for Sustainable Products Regulation (ESPR) highlight the active role of the EU in making corporations act sustainably and responsibly. These would mandate corporations to evaluate their human rights and environmental impact of activities and value chains and find ways of preventing and mitigating those impacts. Increased transparency and accountability across supply chains will be called for.
3. Fight against greenwashing
Regulators are really going tough on greenwashing. The directive makes claims about the environment under Green Claims and requires companies to substantiate such claims with relevant evidence to provide transparency and authenticity to the claim of sustainability in marketing. The green claims made by them were also investigated by the UK's Competition and Markets Authority (CMA). This simply means that now companies will have to very clearly substantiate their claim of sustainability to escape negative publicity and possible legal action from the authorities.
ESG Compliance Solutions
The road to ESG compliance is always bumpy. Three of the most common possible obstacles a company might face in handling compliance and ESG are mentioned below.
1. There are a multitude of ESG frameworks and standards.
ESG corporate compliance generally revolves around innumerable frameworks and standards, leaving companies troubled in their selection of what to follow. For this reason, there are far too many regional or industry-specific standards and no one single global framework.
Solution: For further selection criteria, a company should explicitly list which environmental, social, or governance issues are important to that organisation. Whatever employee diversity or carbon emission reductions the company wishes to pursue, it should narrow down to those frameworks and standards that concern that issue. Consideration should also be given to the regional aspect.
2. Identifying ESG goals and principles
The next step is to define the ESG goals a company wants to achieve and make them part of its strategy. Many organisations struggle with setting goals without understanding how they will be achieved.
Solution: For successful ESG and compliance, it’s recommended to hire ESG specialists who can assist with setting ESG goals, and that will help to meet ESG requirements.
3. Managing ESG data and metrics over time
Understanding ESG goals and what frameworks and standards a company should follow is only half the battle. It’s also important to clearly define ESG metrics to realise how progress will be measured. Additionally, a company should have a solution for ESG data collection and management.
Solution: Using board portals can be the best answer. Board meeting management software enables the collection and safe storing of large volumes of data and allows stakeholders to access and evaluate that data. Additionally, it’s possible to conduct meetings from within the software, which greatly simplifies ESG compliance management.