Is Public Company Sustainability Reporting in Decline or Just Delayed?

In What Backlash? ESG Reporting Continues to Grow, September-October 2024 Update, the Update observed that, based on reporting during 2024, U.S. public company sustainability reporting “has moved from a niche activity to standard practice for large public companies.”  The story may be different in 2025.

The Conference Board (TCB) has found that, between January 1 and June 30, 2025, only 432 Russell 3000 companies released a sustainability report, compared to 831 during the same period in 2024 – a 48 percent decline. See Why Fewer Companies Are Publishing Sustainability Reports in 2025. While this is a significant change, it is unclear to what extent it merely reflects the timing of sustainability report issuance and to what extent it reflects a trend away from standalone sustainability reporting.  TCB researcher Andrew Jones asserts that “This drop-off reflects not a retreat from ESG, but a strategic recalibration in response to shifting regulatory, political, and investor dynamics.”  Dr. Jones cites several reasons why companies are delaying their 2025 sustainability reports:

• Many firms are preparing for mandatory disclosures under the EU’s Corporate Sustainability Reporting Directive (CSRD) and California’s climate disclosure laws. See E.U. is Dialing Back Sustainability Reporting and Due Diligence, March-April 2025 Update, and California Climate Disclosure Law Survives a Challenge in this Update.  According to Dr. Jones, “Regulatory uncertainty—especially in the EU, where a CSRD ‘omnibus’ revision is underway—is also prompting companies to delay decisions until final requirements are clearer.”

• Changes in U.S. policy on sustainability are also a factor. “Companies, particularly in politically sensitive sectors or regions, are applying more rigorous legal, compliance, and reputational review to ESG disclosures. Many are delaying publication, scaling back content, or shifting to more neutral, risk-based framing while they monitor the evolving federal environment.”

Most companies that released sustainability reports in 2024 may eventually report in 2025.  However, the decrease in sustainability report issuance during the first half of 2025 may in some cases be the result of decisions to move away from sustainability reporting as an exercise separate from other aspects of corporate disclosure.  Dr. Jones states that “[s]ome companies are reassessing whether and how to publish stand-alone sustainability reports” and “streamlining disclosures, focusing on financially material issues, and integrating ESG data into 10-Ks, investor decks, or earnings calls.”  If they have not done so already, audit committees may want to discuss with management whether the company should rethink its approach to sustainability reporting.