We’ve entered a new era for mandatory ESG disclosures. In 2025, the landscape has shifted from a patchwork of voluntary frameworks to a tightly woven fabric of mandatory ESG disclosures that span jurisdictions and industries.
For sustainability leaders, understanding these ESG reporting obligations is no longer a compliance formality; it’s a core governance, risk, and stakeholder engagement function.
Regulators, investors, and customers now expect standardized, auditable annual reports of ESG data covering environmental, social, and governance performance. Failure to meet these requirements can result in financial penalties, reputational damage, and loss of market access.
This guide covers:
- Whether ESG reporting is mandatory in 2025 (and, if it is, for whom)
- The specific ESG reporting requirements for large enterprises across key regions
- Penalties for non-compliance
- What ESG-related data must be legally disclosed
Is ESG reporting mandatory in 2025?
In 2025, ESG reporting is mandatory for many large enterprises in the EU, UK, US, Canada, Australia, Japan, Singapore, and beyond.
The expansion of regulation means that most publicly listed companies — and a growing number of large private ones — are required to file structured ESG reports alongside other financial reporting.
Key drivers of mandatory ESG disclosure in 2025:
- Regulatory convergence: Frameworks like the EU’s CSRD/ESRS and the international Sustainability Standards Board’s (ISSB) IFRS S1/S2 are shaping global standards.
- Investor expectations: Institutional investors demand comparable ESG data to inform capital allocation and other investment decisions.
- Supply chain pressure: Large buyers are requiring suppliers to provide verifiable ESG data to maintain contracts.
- Corporate governance: Regulators and stakeholders increasingly view ESG performance as integral to managing financial risk and demonstrating accountable, transparent leadership.
- Consumer demand: As more consumers demand social responsibility on environmental issues from the companies they choose to support, there’s increased pressure to measure and publish ESG metrics, particularly around how companies are mitigating their own impact on climate change. Using readily available ESG information that’s current, complete, and correct can help companies avoid greenwashing their environmental impact.
Even companies not directly in scope often report voluntarily to remain competitive in procurement and capital markets.
ESG reporting requirements for large enterprises in 2025
Large enterprises are typically defined by employee count, revenue, or market capitalization thresholds. In 2025, mandatory ESG reporting obligations vary by jurisdiction, but the common denominator is disclosure of climate, social, and governance data in a standardized format.
1. European Union: CSRD and ESRS
The Corporate Sustainability Reporting Directive (CSRD) requires:
- Scope: All large EU companies and non-EU companies with >€150M EU revenue and an EU branch/subsidiary.
- Framework: European Sustainability Reporting Standards (ESRS), set by the EU taxonomy.
- Content:
- ESG strategy and governance
- Double materiality assessment outcomes
- Quantitative and qualitative disclosures for environmental, social, and governance topics
- Scope 1, 2, and 3 GHG emissions
- Format: XHTML with machine-readable tagging
- Assurance: Limited assurance (moving to reasonable assurance in later years)
- Timeline:
- Wave 1: FY 2024 —> 2025
- Wave 2: FY 2027 in 2028
- Wave 3: FY 2028 in 2029
- Wave 4: FY 2028 —> 2029
2. United States: State-level mandatory ESG and climate reporting
In the absence of a federal U.S. Securities and Exchange Commission (SEC) climate disclosure mandate, several U.S. states have introduced their own binding carbon and/or ESG disclosure requirements for U.S. companies:
California Climate Corporate Data Accountability Act (SB 253)
CA SB253 requires large companies (public or private) doing business in California with over $1B annual revenue to disclose Scope 1, 2, and 3 GHG emissions.
California Climate-Related Financial Risk Act (SB 261)
CA SB261 requires companies with over $500M annual revenue doing business in California to disclose climate-related financial risks and mitigation strategies, aligned with the Task Force on Climate-related Financial Disclosures, or TCFD.
New York State Climate Leadership and Community Protection Act (CLCPA)
The CLCPA includes certain reporting requirements for regulated sectors, particularly in utilities and large emitters. It requires New York-based private and public companies of certain sizes to reduce economy-wide greenhouse gas emissions 40 percent by 2030 and no less than 85 percent by 2050 from 1990 levels.
Washington State Climate Commitment Act
The CCA imposes emissions reporting for covered entities under the state’s cap-and-invest program.
These state-level rules are enforceable and may apply even to companies headquartered outside the state if they meet revenue or operational thresholds.
3. United Kingdom: Climate-related financial disclosure requirements
The UK mandates climate disclosures aligned to TCFD recommendations for large companies and financial institutions. Requirements include:
- Governance and strategy for climate risks
- Risk management processes
- Metrics and targets (including emissions)
4. Canada: Proposed CSA climate disclosure rules
Canada’s CSA proposed rules, modeled on TCFD, will require listed issuers to disclose:
- Climate governance and strategy
- Climate risk management
- Scope 1, 2 (and possibly 3) emissions
5. Australia: Mandatory climate reporting framework
From July 2024, large companies must report climate-related information in line with ISSB standards, including:
- Scope 1, 2, and material Scope 3 emissions
- Climate-related risk governance and strategy
- Transition plans
6. Japan: Mandatory sustainability disclosures
Japan’s Financial Services Agency (FSA) mandates sustainability disclosures aligned with ISSB S1/S2 for listed companies, covering:
- Climate risk governance
- Emissions reporting
- Baseline financial impacts
7. Singapore: Mandatory climate reporting for listed issuers
Singapore Exchange (SGX) requires:
- Climate-related disclosures aligned with TCFD (moving to ISSB alignment)
- Emissions data
- Targets and progress
Penalties for non-compliance of mandatory ESG regulations
Penalties vary by jurisdiction but can include:
Financial fines
For example, under CSRD, national regulators may impose significant monetary penalties for missed or inaccurate filings.
Regulatory enforcement
Suspension of trading or corporate registration may be final rule, in extreme cases.
Reputational damage
Publicly disclosed compliance failures can affect investor and customer confidence.
Procurement exclusion
Non-compliant suppliers risk losing major contracts with ESG-conscious buyers.
Examples:
- EU: Potential administrative sanctions and fines determined by member states (e.g., France’s penalties can reach hundreds of thousands of euros).
- Australia: Breaches may be treated under corporate law, with penalties including director liability.
Legally required ESG disclosure data for enterprises
While the specifics vary, the following categories of ESG issues are commonly mandated across jurisdictions in 2025:
Environmental
- GHG emissions: Scope 1 and 2 required almost everywhere; Scope 3 increasingly mandated (EU, Australia).
- Energy consumption and intensity metrics
- Water use and waste management
- Climate risk assessments and scenario analysis
Social
- Workforce composition and diversity metrics
- Labor practices, health, and safety
- Human rights due diligence (mandatory under CSRD)
- Community impact initiatives
Governance
- Board and executive oversight of ESG
- Anti-corruption measures
- ESG-linked executive remuneration
- Internal controls for ESG data quality
Harmonizing compliance across frameworks
For enterprises operating in multiple jurisdictions, the challenge is data interoperability. Leading sustainability teams are building central ESG data hubs and using framework crosswalks to map requirements (CSRD ↔ ISSB ↔ GRI, for example).
They’re also engaging with assurance providers early and automating data collection from enterprise systems using purpose-built sustainability software.
FAQ: ESG Reporting Obligations
Q: Is ESG reporting mandatory everywhere?
A: No, but major economies now have some form of mandatory ESG or climate disclosure for large companies.
Q: Can voluntary reporting satisfy mandatory requirements?
A: Only if it aligns with the relevant framework and assurance rules.
Q: What’s the biggest challenge in compliance?
A: Coordinating consistent, high-quality data across multiple regions and teams.
Q: Do all large companies have to publish ESG reports in 2025?
A: No. But in major markets like the EU, UK, Canada, and parts of the US (California, New York), large companies must comply with mandatory ESG disclosure laws.
Q: What happens if my company doesn’t comply with ESG regulations?
A: You could face financial penalties, lose contracts, or suffer reputational damage.
Q: Which ESG metrics are most often mandatory?
A: Commonly required metrics include GHG emissions (Scope 1, 2, and sometimes 3), climate risks, diversity data, and governance practices.
Q: Can one ESG report satisfy multiple regulations?
A: Yes, if it aligns with all relevant frameworks (e.g., CSRD, ISSB, GRI) and meets assurance requirements.
