The power of ESG: shifting from reporting-led to business-led, driven by sustainability rules

We are excited to share the key takeaways from the recent Power of ESG event, part of the ESG District series organized by Mediafin, KPMG in Belgium, and BNP Paribas Fortis. Bringing together sustainability experts from a wide range of industries, the event sparked insightful conversations on how ESG is evolving from a reporting obligation into a strategic business driver. Here's a look at the highlights and lessons from this dynamic session.

Readers are increasingly interested in consulting sustainability reports, but many are concerned about how to navigate and process the often complex information they contain. This complexity can act as a barrier to engagement. In response, the ESG District platform was launched to make ESG reporting more accessible and widespread. By sharing insightful and impactful stories, the initiative draws attention to key issues and helps raise awareness among a broader audience.

Before the Omnibus initiative, the CSRD was introduced with key objectives: to increase transparency, improve comparability, and enhance the credibility of sustainability reporting—fully aligned with the EU Green Deal. However, its implementation has not been without challenges. Companies have faced high compliance costs and struggled with the complexity of collecting accurate sustainability data, both internally and across their value chains. In many cases, organizations lacked adequate governance structures, trained personnel, and appropriate reporting systems to meet the directive's demands.

In light of the current geopolitical context and driven by the Draghi report, the European Commission proposed a simplification of the CSRD Directive through the Omnibus Initiative. With this initiative, the Commission effectively pulls the handbrake on current reporting requirements. This complicates matters for companies, given that the CSRD was already transposed into Belgian law.

The purpose of the Omnibus Initiative is to enhance European economic competitiveness, reduce administrative and reporting burdens, and unlock businesses’ investment potential. This shift is accompanied by a transition from the environmentally focused Green Deal to the Clean Industrial Deal—a strategy that prioritizes international economic competitiveness while keeping sustainability at its core.

The Omnibus Initiative includes several key proposals: (i) a “Stop the Clock” measure, (ii) amendments to the scope and obligations of the CSRD and CSDDD, (iii) changes to certain delegated acts under the EU Taxonomy Regulation, and (iv) revisions to the European Sustainability Reporting Standards. Except for point (i), the initiative still requires approval by the Council and is therefore currently considered a proposal.

If adopted, the proposed changes will have a significant impact on companies subject to CSRD regulations. Initial IBR-IRE estimates suggest a possible scope reduction of 92.4% in Belgium alone. Other proposals include a value chain cap for SMEs, reduced disclosure requirements, the discontinuation of sector-specific standards, and a limitation to limited assurance.

Despite the many proposed adjustments, there will be no change to the Double Materiality principle, which continues to require companies to conduct a Double Materiality Assessment (DMA) to identify material Impacts, Risks, and Opportunities.

In the current landscape, sustainability is shifting from being reporting-driven to business performance-driven. It is increasingly seen–and acted upon–as both a resilience approach and a future-proof business strategy, enabling companies to unlock top- and bottom-line potential, build resilience against material risks, strengthen their brand and employee value proposition, and secure access to financing.

Amid the current uncertainty surrounding the CSRD, companies can already leverage the Voluntary Reporting Standards for SMEs (VSME) to build the foundation of their sustainability reporting. These standards are considered the minimum reporting layer—onto which additional ESG disclosures can be added—but, more importantly, they provide a structure for tailoring ESG strategies and turning ESG data into a strategic value driver.

The double materiality analysis (DMA) will remain a cornerstone for driving sustainable business.  By identifying and managing material Impacts, Risks, and Opportunities (IROs), and integrating them into both strategy and risk management systems, organizations can generate quantifiable business value, strengthen resilience, and support long-term business growth while contributing positively to society.

The EU Taxonomy will strengthen your business strategy by helping you assess how truly green your operations are—an essential step for attracting green financing. Climate-neutral investments are set to gain momentum, especially considering the Clean Industrial Deal, which promotes clean tech and green, efficient energy. 

Companies need to act now to build resilience against future climate and nature-related risks. Developing climate and nature transition plans will be key to demonstrating relevance in a net-zero future. While transition planning may seem complex, robust plans can be developed by focusing on a few critical elements: setting targets and objectives, building roadmaps, estimating costs, and assigning responsibilities. Ultimately, this enables companies to mitigate risks and seize emerging opportunities.

In today’s EU landscape, sustainability remains central to competitiveness. Beyond the well-known reporting directives, a wide range of environmental, social, and governance (ESG) regulations continue to drive sustainable change. The EU’s Clean Industrial Deal further strengthens this push by supporting the decarbonization of industry and promoting cleaner technologies. Companies can also benefit from tax incentives linked to initiatives such as energy efficiency improvements and greenhouse gas (GHG) emission reductions.

Panelists shared the following:

• Cathy Blervacq, VP Sustainability at Sibelco
  Sibelco performed a DMA, which confirmed its material Impacts, Risks, and Opportunities related to ESG topics. This prompted the company to initiate systematic data collection worldwide, which will be used for IRO management. Additionally, Cathy elaborated on how to be recognized as a frontrunner in sustainability by stakeholders and potential clients. Becoming a recognized partner or leader in sustainability does not happen overnight. Small steps enable progress, but a vital part of any successful strategy will always be the interest and support of top management.
  
  
• Laurens van Reijen, CEO at LCL Data Centers
  LCL views sustainability as a key value driver and has already received multiple recognitions, including the ‘Best Sustainability Report’ from IBR/IRE and the title of ‘Most Sustainable ICT Company of the Year,’ among others. The company began investing in sustainability around five years ago, following the introduction of the EU Green Deal. At that time, it made a deliberate choice to lead rather than follow, engaging in regular strategy sessions to shape its sustainability approach. This leadership position has strengthened the company’s brand—attracting both top talent and new customers.
  
  
• Jo Wuytack, Head of Sustainability at Degroof Petercam
  Banks currently find themselves in an uncomfortable position regarding green financing. While they often have the ambition to do more, they cannot achieve it alone. They need the sustainability landscape to evolve more rapidly to enable a successful transition to green financing.
  
  
• Geert Huysmans, ESG Director at Nipro Europe Group Companies
  Nipro Europe Group Companies, a subsidiary of Nipro Corporate Japan, initially approached its DMA as a compliance exercise. Aligning a Europe-level assessment with insights from Japan proved challenging at first. However, this challenge helped them focus on creating unity across the entire organization and build momentum. As a result, the DMA evolved from a compliance task into a strategic exercise. Moreover, incorporating perspectives from multiple regions enriched the analysis, as it brought to light region-specific priorities and emerging issues.
  
  
• Capucine Moyon, Director Consolidation & External Reporting at SITA (Société Internationale de Télécommunications Aéronautiques)
  ESG is often still viewed primarily as a reporting obligation by finance teams, who are frequently not involved in the business strategy where sustainability efforts actually take place. Because SITA supports aviation-sector companies from a technical perspective, it can play a vital role in advancing data-driven sustainability initiatives. However, developing a unified sustainability strategy in the aviation sector is often challenging due to the sector’s significant environmental impact and the differing perspectives of various stakeholders.