What were the biggest impacts of ESG in 2024

There is a lot to reflect on as we come to the end of 2024. One hot topic on a global scale is ESG, its impact, the challenges raised and its relevance in business. With new Governments to be sworn in at the beginning of the new year in regions such as US and Europe, ESG experts around the world are assessing what revised policies will mean for ESG. But that’s for the upcoming 2025 blog. First let’s wrap up 2024, and reflect on the key material impacts of ESG in 2024:

1. Implementation of the Corporate Sustainability Reporting Directive (CSRD): The CSRD came into effect on January 1, 2024, marking a significant expansion of ESG reporting requirements. This directive requires large companies and those already subject to the Non-Financial Reporting Directive (NFRD) to publish CSRD-compliant sustainability reports covering the 2024 financial year.

2. Increased scope of companies affected: The CSRD expanded the number of companies required to publish sustainability reports from 11,000 under the NFRD to over 50,000. This includes large companies with operations in the EU and publicly traded mid-market companies.

3. Enhanced value chain transparency: Companies faced increased pressure to report on Scope 3 emissions and improve visibility into their supply chains. This trend extended reporting requirements to smaller suppliers and B2B companies. Simply the fact that more companies are aware now of these requirements provides a greater number of organisations focusing on and working to comply with ESG standards.

4. Integration of ESG into core business strategies: In 2024, companies began to embrace ESG criteria not just for compliance or risk management, but as an opportunity to fundamentally transform their business models for the greater good. This shift led to a thorough revision of design processes, procurement strategies, financial management, and marketing practices.

5. Technological advancements in ESG reporting: The increasing use of AI tools allowed companies to improve sustainability data analysis and make reporting more efficient. This technological integration became crucial in light of the evolving regulatory environment and the need for more accurate and verifiable ESG data.

These impacts demonstrate that 2024 was a pivotal year for ESG, with significant regulatory changes and a shift towards more comprehensive and integrated approaches to sustainability in business operations.