Webinar Insights and Takeaways: Balancing Business Priorities: US Political Shifts & EU Requirements in ESG in 2025

Executive Summary: Despite regulatory uncertainty, companies should maintain strategic ESG governance focused on material issues rather than mere compliance, as sustainability remains critical for long-term business resilience.

As ESG-focused regulations continue to evolve around the world, businesses are grappling with uncertainty. How should companies respond to shifting policies while staying competitive and aligned with their sustainability commitments? Our recent webinar brought together policy, legal, and corporate sustainability experts to discuss the way forward.

This article summarizes the key insights and takeaways from our webinar on March 6, 2025. Moderated by Susanne Katus, our SVP Market Leader, our expert panel comprised Greta Koch, Parliamentary Assistant at the European Parliament, Evan Williams, Vice President at the US Chamber of Commerce - Center for Capital Markets Competitveness, Rhys Davies, Partner ESG & Impact at Kirkland & Ellis International, and Scharl Scott, Senior Manager, Corporate Sustainability at Unity Software. 

Regulatory Change and How Companies are Responding

The ESG regulatory landscape is in a state of flux, with significant shifts in the EU and the US leaving businesses unsure of the actions they should be taking now and planning for in the future. The panel discussed some of these latest developments:  

• EU Simplification Package: The EU’s Omnibus simplification package, announced on February 26, proposes changes to the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation, including delayed reporting deadlines, higher compliance thresholds, and fewer data requirements. You can learn more about the proposed changes in our Omnibus infographic linked here.
• US State-Level Progress: State-level climate laws in the US are progressing despite a federal pullback on regulations related to ESG, with California, Illinois, New York, and Washington states leading the way. Our handout linked here highlights what’s happening with these state-level climate regulations.  
• Global Standards Adoption: Many countries have announced plans to adopt the International Sustainability Standards Board (ISSB) global standards, including Australia, Canada, Japan, and the UK. 
• Stakeholder Expectations: Despite regulatory changes and the political rhetoric, investors and stakeholders remain focused on sustainability performance and practices as an indicator of a company’s resilience and, therefore, future success. 

When asked in a poll how their companies were responding to these developments, the audience showed a mix of approaches — with some moving full speed ahead (36%), others waiting for regulatory clarity (41%), and some taking a more peer-driven approach (17%).

Rhys Davies summed it up:

“I think the responses to the poll and the diversity of responses there reflect exactly what I would expect to see in situations like this. We have quite dynamic environments in a number of different jurisdictions, and the decisions that then fall to be made are ultimately strategic decisions for each individual business based on their priorities and their knowledge of their stakeholders.”

Governance, Not Compliance, Is the North Star

A key theme from the discussion was that governance should be adaptive, not reactionary. ESG strategy should be led by business priorities, not compliance requirements. As Rhys noted:

“Compliance should be an output of a well-structured governance process, not the end goal itself.”

Double materiality assessments remain crucial for companies, even amid regulatory shifts. Scharl Scott shared her perspective:

“We see great value in continuing our double materiality assessment — not just for compliance, but to align our sustainability work with business strategy and financial risks.”

According to a survey we carried out earlier in the year, 54% of companies see the identification and assessment of Impacts, Risks, and Opportunities (IROs) as an important exercise beyond CSRD compliance. Susanne Katus explained: 

“The survey results reinforce that for most companies, aligning with CSRD is really about strengthening governance internally. So the exercise of looking at impacts, risks, and opportunities from a wider enterprise point of view has been helpful to level set internally, get the right stakeholders thinking about these issues, and have a deeper understanding of how you as a company should be moving forward.”

You can access the survey findings via this link.

The ESG Maturity Curve: From Reporting to Real Impact

Despite regulatory uncertainty, the conversation underscored that ESG isn’t going away — it’s evolving. Investors, employees, and customers still expect transparency. The focus now is on smarter, more focused, and strategic sustainability efforts that include:

• Better business integration and less checkbox compliance
• Stronger governance with clear accountability
• Strategies that closely align with business priorities

Evan Williams put it succinctly:

“We might be seeing the end of ‘ESG’ as a term or moniker in the US, but not the end of what it stands for. The issues — climate risk, corporate governance, social impact — are here to stay.”

Biggest ESG Governance Challenges According to the Audience

A live audience poll revealed the top ESG governance hurdles companies face today:

• Difficulty tracking evolving regulations was the top response, with 35% of audience members putting this as their biggest challenge 
• Inconsistent ESG data collection & verification was in 2nd place, with 21% of voters noting this as a key challenge
• Limited executive engagement in sustainability strategy was 3rd, receiving 17% of the votes
• Unclear accountability between teams was close behind in 4th place with 15% of votes
• Balancing regional compliance with global standards received 12% of the votes.

These challenges highlight the need to have solutions and processes in place that enable effective ongoing monitoring of the landscape and gathering (and validation) of the necessary data. Executive oversight and cross-functional collaboration between legal, finance, risk, and sustainability teams are also more critical than ever.

Scharl spoke about how technology has helped her team at Unity:

“We leverage software tools that use AI in many ways — carbon accounting, double materiality assessment with Datamaran, and ESG management. Datamaran makes the IRO process easy, simplifying assessment by tracking regulations, peer reporting, policies, and media perception. AI helps manage messy ESG data, streamlining data ingestion and processing."

Key Takeaway: Your Strategy on ESG Needs Staying Power

While regulations and sentiments towards the term “ESG” may be shifting, corporate sustainability strategies shouldn’t. Being reactionary puts your business at risk. Companies that focus on material issues and integrate ESG into governance, risk management, and financial and operational planning will be better positioned for long-term success. Greta Koch offered her thoughts on this:

“In the end, sustainability leads to competitiveness. It's just the question of how compliant you need to be with the laws that we passed last year that might be changed in the next two or three years. If you are in the scope of CSRD under wave two or wave three, this means that your reporting will be delayed. That is quite certain. Also, for due diligence, I do expect that this will be delayed. But that doesn't mean that you should keep your investments at zero. There are fantastic international standards you can stick to. It's definitely worth it to keep on going.”

What This Means For Your Business

Based on our expert panel’s insights, here are three actionable steps you can take now: