In January of 2023, the European Union’s new sustainability standards went into effect. The Corporate Sustainability Reporting Directive (CSRD) updated the rules for what companies have to report, and made a broader group of companies required to report on sustainability. Climate change brings macroeconomic instability, so strong reporting standards bring stakeholders, particularly investors, the information they need to understand the risks a company is facing in a changing climate, as well as the effect the company has on said climate.

Personally, I think increased transparency and accountability are great. No industry will be untouched by climate change. Investors and other stakeholders need to know if a company is ready for the impacts of climate change, such as extreme weather. Having the EU set these standards also means that companies can be more easily compared and there is less opportunity for greenwashing in the reports.

The danger here is what happens to the sustainability industry and ‘green’ jobs. Many people who work in sustainability find their jobs are increasingly focused on reporting, taking on the traditional role of an Audits and Compliance team. Company time, resources, and attention are being given to regulations and certifications. Though important, those things don’t guide strategy or create value for the company. Thus, sustainability is relegated to being a cost center mandated by the EU and other bodies. The chance for creating shared value, circularity, and other sources of innovation are ignored in favor of meeting the minimum standards. Sustainability is more than a list of boxes to check. It can be what differentiates your company, motivates your team, guides decision-making, and builds a legacy of which everyone involved can be proud.

So what can be done? If you have an Audit and Compliance team or an Environment, Health, and Safety team, or some other body responsible for reporting, incorporate sustainability reporting into their work. These people are accustomed to regulatory language and culture, and they will be best equipped to respond. You can have someone on the team who is delegated to sustainability and responsible for building up a knowledge base, have sustainability integrated into each job function, or you can have a sustainability professional outside the department who can answer the team’s questions.

Your reporting is being taken care of, so it is time to consider what sustainability means for your company. How will you be impacted by climate change? What risks exist, and are there opportunities? How do your stakeholders feel about sustainability or related topics? How do you make sustainability a source of value for your company and your stakeholders? What kind of support or resources (integrating sustainability into job functions, having a full time sustainability professional, hiring a strategic sustainable business consultant, etc.) do you need to execute on your strategy and derive full benefits?

A note for sustainability professionals: Unless reporting is your passion, don’t get pigeonholed into compliance. It is important, but there is more to sustainability than regulations. Advocate for your position and make clear that the company is leaving value on the table by only focusing on government standards.