The arena of sustainable investment is evolving globally. For the European Union, the impact is clear: to operate in the EU, companies must elevate their sustainability game and material data disclosures.

At the heart of this change is the Corporate Sustainability Reporting Directive that went into effect January 5, 2023. These directives require EU businesses—including qualifying EU subsidiaries of non-EU companies—to report on the environmental and social impact of their business activities. This has set a new precedent, forcing companies to put sustainability reporting on an equal footing with financial reporting.

In practice, the reporting standards require companies to disclose their environmental impacts, enforce DEI principles and ensure ethical supply chains. These measures promise a future in which companies are as responsible for social and environmental issues as they are for their financial success.

Despite a recent two-year delay to refine the new standards, the momentum for sustainable investment is unstoppable. This delay is more of a strategic pause, an opportunity for companies to fully internalize these practices. It is a reminder that readiness takes precedence over speed. The continued rise of ESG-related activist campaigns across Europe is a testament to the growing awareness and demand for corporate sustainability.

My career in international development has taught me the importance of not just meeting but embracing global standards. The EU’s approach is a case in point. It’s not just about meeting standards, it’s about the integrity of a brand in the eyes of consumers, shareholders, and employees.

Data serves as the basis for informed decisions. When we integrate these standards in the EU or in the United States, we see that sustainable business is not just about risk management — it's about opportunity. Stakeholders now expect a real commitment to sustainable principles, one that is not just superficial. It is becoming increasingly clear that companies that align themselves with these values will be successful in the long term.

For multinational companies, the stringent EU standards are more than just a regional compliance checklist; they are a blueprint for global corporate responsibility. Adherence to these standards can lead to a holistic adoption of sustainable practices and ensure that every stakeholder, investor and employee is part of a forward-thinking, ethical and environmentally conscious company.

At As You Know, we compile ESG data on 3000 companies and know first hand how complex this transformation is and the critical role that actionable data plays in it. Our mission is clear: we free companies and stakeholders from tedious manual data management and guide them through the complex terrain of sustainable investing with practical ESG data insights. We align sustainable commitments with economic returns, creating a link between value and values.

As we look to the future, the need for sustainable investing is undeniable. Companies that interpret ESG data correctly and incorporate it into their decision-making are well on their way to success. It is no longer a debate about integrating sustainability into investment strategies, but a race to incorporate it efficiently.