ESG as a growth factor: From duty to opportunity

Political shifts and regulatory changes 

Recent regulatory developments have introduced new complexity into ESG reporting. At the center is the EU’s omnibus proposal, which affects key frameworks like the CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive), the Taxonomy Regulation, and CBAM (Carbon Border Adjustment Mechanism). These proposals suggest potential simplifications but also raise questions, especially for companies preparing their ESG disclosures.

To provide some breathing room for companies and give the EU legislative bodies time to negotiate the content-related amendments of the omnibus package, the “Stop the Clock” directive proposes to delay reporting obligations under CSRD for 2025 and 2026 as well as the implementation timeline under CSDDD. Despite this regulatory pause, global momentum around ESG continues. Even as the US and EU temper ESG initiatives, countries like Canada, the UK, Australia, and various Asian markets are pushing forward with reporting requirements and green investment strategies. This reflects a broader, long-term trend: Regulations are here to stay, and ESG remains essential for global competitiveness.

ESG scores and business financing 

One of the clearest signs that ESG is becoming a business imperative is its growing influence on corporate financing. Banks are increasingly integrating ESG scores into lending decisions, and companies with poor ESG performance are already experiencing reduced financing options.

Banks today act as a pulse check for the economy, and their signaling is clear: bad ESG scores are generally not favorable for financing requests, and in extreme cases, bad ESG scores might not get financing at all. This has real-world implications. For example, even profitable and growing traditional industries (e.g., automotive suppliers) are currently struggling to secure funding for critical transformations, such as updating production facilities or pivoting toward new end markets. Even if business cases are strong, Banks might reject such investments due to ESG score concerns. This underpins that for Banks, ESG scoring is not only about sustainability & CO2 footprint but about getting a much broader indicator on company health & future resilience. If a bank doesn’t believe a business will succeed over the next five to ten years, it’s unlikely to offer long-term financing. Consequently, many businesses are forced to invest out of their own cash flow, and in some cases, equity financing isn’t available either. That puts the entire transformation at risk.

This trend creates a feedback loop: without credible ESG performance, companies become generally less attractive for investors. Conversely, investing in ESG improves long-term financial viability, making it a strategic enabler rather than just a reputational asset. A strong ESG profile can lower a company’s cost of capital and unlock funding opportunities – especially as capital providers increasingly pivot to become sustainability investors.

ESG as a business opportunity 

While the regulatory landscape remains uncertain, forward-thinking companies are shifting focus from compliance to business value creation. ESG is increasingly tied to operational efficiency, brand trust, and customer loyalty, especially as clients begin to demand GHG emissions reporting in RFPs, particularly in the technology, media, and communications sectors. 

ESG also supports long-term differentiation. Companies that embrace voluntary standards and transparent reporting are better positioned to stand out from the crowd, especially in industries where greenwashing claims have become a legal and reputational minefield. The key is to connect ESG with tangible business metrics: cost savings through efficiency, access to new markets, or improved employee retention. ESG isn’t just about reputation – it’s about performance.

Successful ESG implementation 

Success in ESG requires more than ambition. It demands clarity, alignment, and accountability. First, companies must clearly define the E, S, and G components relevant to their operations. This includes identifying material issues, such as climate impact, labor rights, or board diversity. Equally important is board-level commitment, with ESG embedded into strategic decision-making and cross-functional collaboration. 

To sustain momentum, companies should consider integrating ESG goals into compensation models and target agreements, as well as aligning incentives across the organization. Meanwhile, robust data systems are crucial for monitoring progress, ensuring compliance, and fostering trust with stakeholders. Technology is a vital enabler in this context, helping businesses streamline reporting, track metrics, and adapt quickly to new standards.

Conclusion: Turning ESG into a competitive edge

The message from legal, strategic, and technological leaders is clear: ESG is not going away. While short-term political shifts may slow regulatory timelines, private ordering, as well as the strategic and financial case for ESG, has never been stronger. Companies that see ESG as a growth lever (not just a compliance checkbox) are already building resilient, future-ready organizations. Whether it's accessing capital, attracting customers, or managing risk, ESG is now a core driver of long-term value.

​Looking to harness the full potential of ESG initiatives? Our experts at OMMAX and ESGvolution are here to help. Get in contact through the form below!