Sustainability Reporting and ESG Performance: Where is the EU At?

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The growing focus on sustainability and the environmental impact of economic activities makes clear and transparent reporting essential. Companies, in addition to having to comply with the increasingly stringent regulations of the European Union, must meet the expectations of investors, consumers, and stakeholders who demand reliable data on their environmental, social, and governance (ESG) performance. Effective sustainability reporting is not just a regulatory requirement but represents a strategic opportunity for companies, allowing them to improve risk management, attract responsible investments, and strengthen their reputation in the global market.

The new "Europe Sustainable Development Report 2025", published by the United Nations Sustainable Development Solutions Network (SDSN), paints a worrying picture for the European Union. Although 19 of the top 20 countries in the SDG index are European, progress towards the Sustainable Development Goals has significantly slowed between 2020 and 2023, with the rate of advancement halved compared to the previous three years. The main issues concern the environment and biodiversity, with particular attention to the sustainability of agricultural and food systems. Additionally, the EU must address the negative consequences of its consumption model and supply chains.

The report identifies four fundamental priorities for the new EU leadership: 1) increase investments in clean energy and digital innovation; 2) strengthen social support measures to reduce inequalities; 3) promote more sustainable diets to minimize the environmental impact; 4) intensify international cooperation through green diplomacy. A key event in this context will be the International Conference on Financing for Development, scheduled in Seville in June 2025, which will represent a crucial opportunity to redefine investment strategies and effectively channel economic resources towards the achievement of the SDGs by 2030.

In Italy, the regulation of sustainability reporting has undergone significant evolution, with a direct impact on financial oversight. Consob has recently updated its regulatory framework to comply with national provisions implementing the CSRD Directive (2022/2464) and the European Commission's Omnibus Package. With the entry into force of legislative decree no. 125/2024 on September 25, Consob has acquired new control powers over sustainability reporting and conducted a public consultation for the amendment of the "Issuers' Regulation" (RE). The revisions introduced on March 13 include, among other measures, the insertion of Article 89-quinquies, which regulates the control methods of sustainability reporting, and Article 81-ter, which establishes the specific format for certification by managers.

The Omnibus Package, published on February 26, 2025, redefined the reporting obligations at the European level, postponing them for companies with more than 500 employees and excluding about 80% of the companies initially considered by the CSRD. With reference to Italy, the Consob's oversight will focus solely on issuers listed in Italy, with a sample selected annually based on the risks of the information disseminated. Compared to the past, the new control regime aims for greater consistency with financial reporting while ensuring a more selective and targeted approach. A significant innovation is the introduction of the figure of the "sustainability auditor", who will have the task of verifying the compliance of reports under the supervision of the Ministry of Economy and Finance (MEF) and Consob.

The regulatory update in Italy is part of a broader framework of evolution of European sustainability regulation. The European Union aims to standardize reporting requirements, ensuring consistency between different member states and aligning with international best practices. The recent revision of the CSRD Directive and the introduction of the Omnibus Package reflect the need to balance regulatory burdens with the goal of providing transparent and reliable data to investors and stakeholders. In this scenario, the EU plays a fundamental role in promoting a fair and efficient regulatory ecosystem, capable of combining economic development and sustainability, consolidating its position as a global benchmark in the ESG transition.

This article was created as part of the "Biodiversity services EU expansion" project (CUP: E43D22000480009) under the call for proposals by Regione Lombardia "PR FESR 2021-2027 – LINEA INTERNAZIONALIZZAZIONE 21-27", aimed at supporting the internationalization of Italian companies. 3Bee is the naturetech company developing innovative technologies for the monitoring, protection, and regeneration of biodiversity, assisting companies in defining personalized climate strategies based on the analysis of their impacts and dependencies on nature. With a strong portfolio in Italy, Germany, and France, and significant partnerships, 3Bee continues its expansion into international markets to create a tangible impact through technology.