As ESG (Environmental, Social, and Governance) takes center stage in corporate strategy, regulators around the world are introducing ESG reporting requirements. From the SEC in the US to the ESRS in Europe, companies are being asked to report not just on financial performance but on their environmental and social impact too.
In this blog we break down the main ESG reporting requirements across the US, EU, UK and Australia, plus global voluntary frameworks like ISSB (International Sustainability Standards Board) and GRI (Global Reporting Initiative). You’ll also see how companies are using ESG reporting platforms like IRIS CARBON® to stay compliant, simplify reporting and unlock strategic value.
Why ESG Reporting Requirements Are Tightening Worldwide
The global push for ESG transparency is being driven by three powerful forces:
- Climate urgency: Governments and investors want to know what companies are doing about climate change and what they plan to do to mitigate it.
- Investor pressure: ESG is now a key metric in investment decisions, so companies need standardized and auditable data.
- Regulatory momentum: Jurisdictions are moving from voluntary guidelines to legal requirements.
This surge in expectations has created a fragmented but fast-changing ESG disclosure landscape. Companies that don’t keep up with these growing standards risk penalties, reputational damage and lose investor confidence. Early adoption of ESG reporting software helps companies to comply as it’s not just a legal risk, it’s a competitive disadvantage.
As of 2025, around 60% of companies are not able to meet the most comprehensive ESG disclosure standards, particularly in areas like Scope 3 emissions.
ESG Reporting Requirements by Region
When it comes to ESG reporting requirements across different regions, the most common questions we hear are: “Who needs to report? What are the actual requirements? Is ESG reporting mandatory in the U.S.? Voluntary in China? What are SEC’s ESG requirements?”
We think all these questions are valid and we’re here to break them down for you.
ESG Reporting Requirements: United States
Let’s start with a big one: ‘Is ESG reporting mandatory in the U.S.?’
The short answer: Not yet, at least not at the federal level. However, things are changing.
In March 2024 the US Securities and Exchange Commission (SEC) finalized its Climate Disclosure Rule, a big deal regulation to increase transparency around corporate climate risks and greenhouse gas (GHG) emissions. The rule requires large public companies to disclose:
- Climate related risks and their impact on operations
- Scope 1 and 2 greenhouse gas (GHG) emissions
- Governance and risk management around climate issues
Who is in Scope of SEC’s ESG reporting?
In scope: All domestic SEC registrants, foreign private issuers (FPIs), and companies filing registration statements (e.g., IPOs).
Excluded: Asset-backed issuers, Canadian MJDS filers on Form 40-F.
GHG exemptions: Smaller Reporting Companies (SRCs), Emerging Growth Companies (EGCs), and Non-Accelerated Filers do not have to disclose GHG emissions but must comply with other requirements.
Key ESG Reporting Requirements SEC
1. Financial Statement Disclosures
- Disclose capitalized costs, expenses, and losses related to:
- Severe weather events and natural conditions
- Climate-related targets or transition plans
- Thresholds: ≥1% of equity or income/loss triggers disclosure.
- Must include:
- Assumptions impacted by climate risks
- Any effects from offsets or RECs if used in transition planning
2. GHG Emissions Disclosures (Scopes 1 & 2)
- Only required if material, for large and accelerated filers
- Must disclose:
- Methodology, boundaries, standards used
- Disaggregated gases (if material)
- Gross emissions (no offsets)
- In CO₂e
- Assurance required, with phased transition:
- Limited assurance → Reasonable assurance for large filers
3. Climate Risk Disclosures (Reg S-K)
- Governance and risk management approach to climate risks
- Material risks and strategic implications
- Use of:
- Scenario analysis
- Internal carbon pricing
- Transition plans
- Carbon offsets and RECs
- Safe harbor for forward-looking info (with conditions)
Compliance Timeline:
- Large Accelerated Filers must start reporting in FY 2026 (filed in 2027)
- Accelerated Filers follow a year later
But on March 27, 2025, the SEC decided not to defend the rule in court as the legal challenges continue, so it’s likely the rule will not be enforced under this administration. The Eighth Circuit Court of Appeals will still decide the rule’s fate. In any case, ESG disclosure is moving forward at the state level.
Source: KPMG
State-Level ESG Laws: California and Beyond
While federal ESG regulations in the U.S. are still taking shape, some states are charging ahead—and none more so than California.
California Laws:
California passed two historic climate-disclosure laws in 2023:
- SB 253 (Climate Corporate Data Accountability Act): Mandates firms with more than $1 billion in revenue operating in California to report Scope 1, 2, and 3 emissions.
- SB 261 (Climate-Related Financial Risk Act): Mandates firms with more than $500 million in revenue to report on climate-related financial risk and mitigation.
Together, these laws make California one of the most ambitious states when it comes to climate transparency.
Other States (Colorado, Illinois, New Jersey, New York):
- Governments have proposed or are thinking about proposing legislation such as California’s SB 253 that mandates major firms (usually $1B+ revenues) to report GHG emissions (Scopes 1, 2, and 3) and, in certain instances, secure third-party assurance. Timelines and specifics of rollout differ, but most call for reporting to commence between 2027 and 2029.
- Anti-ESG Legislation: Some states (e.g., Texas, Florida) have passed legislation limiting or banning consideration of ESG factors in state investments and contracts, and resultant fragmented national regime.
With federal rules stalled, state-level regulations are now the main drivers of ESG disclosure in the U.S. Failure to comply with the SEC’s ESG reporting requirements can result in lawsuits as well as damage to reputation. Firms should also expect investor examination and increased audit expectations.
Summary Table: Key ESG Disclosure Laws in the U.S. (2025)
| Level | Law/Rule | Coverage & Requirements | Status (May 2025) |
| Federal | SEC Climate Rule | Public companies: climate risk & GHG disclosure | Paused, under litigation |
| California | SB 253 | $1B+ revenue, Scope 1/2/3 GHG emissions, third-party assurance | Effective 2026 (2025 data) |
| California | SB 261 | $500M+ revenue, biennial climate risk disclosure | Effective |
| Other | State Bills | Various GHG/ESG disclosure requirements for large companies | Pending/varies by state |
| Several | Anti-ESG Laws | Restrictions on ESG in public funds/investing | In effect in some states |
ESG Reporting Requirements: EU (European Union)
When it comes to ESG reporting, the European Union is setting the global standard. With ambitious regulations like the CSRD, ESRS, and SFDR, the EU is pushing for transparent, detailed, and comparable sustainability disclosures across industries.
Let’s break down what each of these means and who they apply to.
Corporate Sustainability Reporting Directive (CSRD)
The CSRD is the EU’s flagship sustainability reporting law and it’s a game-changer.
CSRD was introduced in 2022 to fix these problems. It aims to:
- Standardize ESG disclosures across the EU.
- Improve quality, consistency, and comparability.
- Give investors reliable data to assess sustainability risks and opportunities.
Scope & Applicability:
The CSRD dramatically expands the number of companies subject to mandatory sustainability reporting, from about 11,700 under NFRD to nearly 50,000. It covers large EU companies, listed SMEs, and certain non-EU companies with significant EU operations.
1) Large EU companies must report if they meet two of the following:
- 250+ employees
- €50 million+ turnover
- €25 million+ total assets
2) Listed Small and Medium-Sized Enterprises (SMEs)
Applies to listed SMEs that meet at least two of:
- 50+ employees
- €8+ million in net turnover
- €4+ million in assets
Reporting for these companies is scheduled to start for the 2026 financial year, with reports due in 2027, though there are proposals to delay or exempt some SMEs.
3) Non-EU Companies
Non-EU companies with substantial operations in the EU must comply if they:
You generate over €150 million in turnover within the EU, and
You have either:
- A large EU subsidiary, or
- An EU branch with over €40 million in net turnover, or
- Securities listed on an EU-regulated market
These entities will have to report starting in 2028, for reports due in 2029
And this isn’t just about ticking boxes, these companies must report in line with the new European Sustainability Reporting Standards (ESRS).
Did you know?
Over 75% of companies impacted by the CSRD are first-time reporters.
Recent and Proposed Changes (2025 ESRS Omnibus Proposal):
In February 2025, the European Commission introduced an Omnibus Proposal to:
- Streamline reporting requirements across CSRD, CSDDD, and the EU Taxonomy.
- Ease burdens for SMEs and avoid duplication.
- Align sustainability rules for better comparability.
Under the new proposal, only companies that meet these updated criteria would be required to report:
- More than 1,000 employees
- And either:
- €50+ million in revenue, or
- €25+ million in total assets
This change would significantly reduce the number of companies required to report under the CSRD, especially among smaller and mid-sized businesses.
| Criteria | Before | After Omnibus | % Change |
| Employee Threshold | 250+ | 1,000+ | ↑ 300% |
| Turnover | €40M | €50M | ↑ 25% |
| Assets | €20M | €25M | ↑ 25% |
| Companies Affected | 50,000+ | ~10,000 | ↓ 80% |
Reporting Timeline Extensions
The proposal also recommends pushing back deadlines for certain groups:
- Large unlisted companies would begin reporting in 2028, for the 2027 financial year
- Listed SMEs would have until 2029 to report on 2028 data
SFDR (Sustainable Finance Disclosure Regulation):
Comes into effect for financial market participants and advisors, mandating disclosure of:
- How ESG considerations are factored into investment choices
- Key adverse effects on sustainability factors
CSRD, ESRS, and SFDR collectively hold companies and investors liable for sustainability claims.
ESG Reporting Requirements: United Kingdom
The UK was the first G20 country to mandate climate-related financial disclosures in line with the Task Force on Climate-related Financial Disclosures (TCFD).
Reporting is required for:
- Public companies
- Large private companies (turnover > £500M and 500+ employees)
- Asset managers and pension funds
UK ESG reporting requirements apply to large companies and asset managers and include:
- Climate risk governance
- Risk strategy and scenario analysis
- Emissions disclosure (Scope 1, 2, and in some cases Scope 3)
- Financial impacts of climate risks
These disclosures feed into broader efforts to transition the UK economy to net zero by 2050.
ESG Reporting Requirements: Australia
Australia recently finalized the Australian Sustainability Reporting Standards (ASRS), which mirror ISSB frameworks. ASRS will be mandatory for large companies in a phased manner beginning FY 2024–25.
The standards will require:
- Climate-related financial disclosures
- Climate risk governance and strategy
- Emission metrics, transition planning, and targets
IRIS CARBON® already supports ASRS reporting, enabling Australian organizations to stay ahead of compliance deadlines.
| Country/Region | Mandatory ESG Reporting? | Year Implemented/Effective | Affected Entities |
| EU | Yes (CSRD) | 2023 | ~50,000 companies |
| UK | Yes | 2022 | Large companies |
| US | Proposed/Partial | Pending | All public companies |
| Malaysia | Yes | 2016 | Listed companies |
| Singapore | Yes (phased) | 2025-2029 | Listed/large cos. |
| Hong Kong | Yes (partial) | Ongoing | Listed companies |
| New Zealand | Yes | 2023 | Financial sector |
| Philippines | Yes | 2019 | Listed companies |
| China | Voluntary | 2022 | All companies |
Voluntary Frameworks That Support Global ESG Compliance
ISSB: Global Baseline for ESG Reporting
The International Sustainability Standards Board (ISSB) has introduced:
- IFRS S1: General sustainability-related disclosures
- IFRS S2: Climate-specific disclosures
These standards are being adopted by jurisdictions like Australia, the UK, and more. ISSB offers a harmonized, investor-focused global baseline for ESG disclosures.
Why it matters: Jurisdictions like Australia, the UK, Canada, Singapore, and Nigeria have already announced plans to adopt or align with ISSB standards in the coming years.
GRI: Widely Used Sustainability Disclosure Framework
The Global Reporting Initiative (GRI) remains the most widely used and popular voluntary framework. It prioritizes stakeholder materiality and addresses environmental, social, and governance issues with sector standards.
The GRI is combined with mandatory standards such as CSRD by companies to address stakeholder demands that go beyond compliance.
- GRI standards consist of universal, topic, and sector modules.
- Companies can use GRI to comply with regulations like CSRD, which encourages GRI alignment.
Why it matters: GRI is particularly useful for companies that want to report double materiality, both financial and impact-based sustainability considerations.
TCFD (Task Force on Climate-related Financial Disclosures)
TCFD offers a framework for disclosure of climate-related financial risk under four major pillars:
- Governance
- Strategy
- Risk management
- Metrics and targets
TCFD is the backbone of several required frameworks such as UK’s climate disclosures, ISSB’s IFRS S2, SEC’s Climate Rule, Australia’s ASRS.
Why it matters: Existing companies that are already aligned with TCFD will find it less difficult to shift towards ISSB, CSRD, and other next-generation frameworks.
CDP (Carbon Disclosure Project)
CDP operates global disclosure programs for climate, forests, water, and supply chains data, usually on behalf of large investors and buyers. Voluntary responses to CDP’s yearly questionnaire are provided by companies on:
- Climate change mitigation
- Water security
- Forests and land use
Why it matters: CDP scores are publicly disclosed and drive investment choices, supply chain management, and ESG ratings.
Key Timelines and Applicability
| Region | Framework | Applicability & Timeline |
| US | SEC Climate Rule | Phased from FY 2025 for large filers |
| EU | CSRD/ESRS | FY 2024 for large EU entities, FY 2028 for non-EU companies |
| UK | TCFD | Mandatory for large public and private companies since 2022 |
| Australia | ASRS | Begins FY 2024–25 for large entities |
| Global | ISSB | Jurisdiction-dependent, used as baseline |
Staying Compliant Across Borders
Cross-border ESG compliance can be overwhelming. Companies must navigate:
- Different ESG reporting requirements per region
- Evolving taxonomies and templates
- Inconsistent timelines and materiality thresholds
- Manual spreadsheets and siloed systems fall short.
IRIS CARBON®: Your Global ESG Reporting Platform
That’s where IRIS CARBON® makes a strategic difference.
Our end-to-end ESG reporting solution streamlines compliance with changing global standards, ensuring organizations can easily and confidently meet their disclosure requirements:
- Pre-built templates aligned with major frameworks like CSRD, SEC Climate Rule, TCFD, ISSB, and ASRS
- Centralized ESG data collection, mapping, and validation across departments and systems
- Real-time updates to reflect the latest regulatory changes and reporting requirements
- Audit-ready outputs designed to reduce review times and minimize compliance risks
- KPI tracking to monitor ESG performance year-over-year with ease
- Comprehensive emissions tracking across Scope 1, 2, and 3, with support for custom metrics
By automating ESG reporting requirements and mapping disclosures intelligently, IRIS CARBON® reduces friction and boosts reporting confidence. The result? Disclosures are accurate, comparable, and aligned with the latest frameworks, in turn making compliance a strength, not a weakness.
Final Thoughts: Turn Compliance into Competitive Advantage
With the ever-evolving nature of ESG regulation, staying agile is a business advantage. Organizations that adopt reporting early using expert-led ESG platforms such as IRIS CARBON® have an edge to:
- Avoid last-minute compliance chaos
- Attract ESG-conscious investors
- Build trust with stakeholders and regulators
- Strengthen long-term resilience
As frameworks tighten and evolve, businesses that implement ESG reporting software such as IRIS CARBON® obtain a clear edge: decreased compliance burden, enhanced decision-making, and enhanced stakeholder trust.
Sources: Source: PWC | Linkedin Article
