It would be a mistake to believe that abandoning the CSRD is a victory: the real battle is competitiveness.
The CSRD under discussion: a probable reduction, but an inevitable dynamic
The Corporate Sustainability Reporting Directive (CSRD) is currently under discussion and could be relaxed or even postponed. This regulatory uncertainty gives some companies the impression that they could escape from a heavy and costly constraint. However, it would be a mistake to think that the easing of the directive means a return to the status quo.
CSRD is only the visible part of a much broader movement: that of an in-depth transformation of the market, where the competitiveness of companies is now directly linked to their ability to integrate environmental and social requirements. Regulators are not the only drivers of this change: investors, banks, customers and business partners are also imposing new rules of the game.
The CSRD merely formalizes an already well-established market demand
The main objective of the CSRD is not to add to administrative obligations, but to structure and harmonize a requirement that is already present in economic dynamics. ESG (environmental, social and governance) transparency has become a key competitive criterion. Companies that see it solely as a regulatory constraint are missing the point: it’s not compliance that counts, but the ability to prove one’s sustainable performance in an environment of limited resources.
An illusion of relief: real demands come from the market
If the CSRD were to be relaxed or postponed, some companies might claim victory, thinking they’d avoid an additional burden. But this victory would be short-lived. The pressure for more virtuous companies comes not only from regulatory texts, but also from investors, banks and customers who expect a real transformation.
1. Investors and banks are already demanding ESG commitments
ESG criteria are integrated into investment and financing strategies. Companies that fail to meet these requirements are progressively excluded from financial markets, with access to capital becoming more difficult and costly. CSRD merely institutionalizes a trend that is already in place.
2. Customers and business partners impose stricter standards
Large companies, themselves subject to ESG requirements, transfer these obligations to their supply chains. Suppliers unable to prove their commitment to sustainability risk losing their contracts. This trend does not depend on regulation; it is already well entrenched in the way markets operate.
A world of limited resources: an economic challenge before a regulatory one
The rising cost of resources and energy is forcing companies to optimize their consumption. The circular economy, waste reduction and lower carbon emissions are no longer strategic options, but conditions for medium- and long-term profitability. Waiting for regulations to impose these changes is a mistake: economic reality already makes them inevitable. The issue is therefore less about producing indicators to comply with legislation than about producing indicators that are genuinely useful for decarbonization. In this sense, streamlining the CSRD is not a bad thing… if it focuses on useful indicators.
A major challenge for asset managers
This transformation is particularly true for asset managers. The valuation of real estate and financial assets is increasingly linked to ESG criteria. Investors now favor assets and portfolios that meet new expectations in terms of sustainability and environmental performance. An asset that does not comply with ESG standards risks losing value and becoming less attractive on the market. For asset managers, this is not just a compliance issue, but a strategic lever for preserving the profitability and liquidity of their investments.
Turning constraints into competitive advantages
Faced with these developments, companies have two choices: to wait and see what happens, or to proactively integrate these issues and use them as a lever for differentiation. Those who take the lead will be more attractive to investors, customers and talent alike.
Companies that adopt a proactive sustainable strategy do so not to comply with regulations, but because it’s a question of competitiveness and long-term survival.
Conclusion: regulation isn’t the problem, it’s an indicator of the transformation underway.
A reduction in the CSRD would not change the direction the economy is taking: only those players who adapt to a more demanding world in terms of sustainability will continue to prosper. Competitiveness is no longer based on price or financial performance alone, but on the ability to demonstrate sustainable performance.
Companies welcoming a relaxation of the CSRD would be misreading the market: it’s not the regulators who are forcing the transformation, it’s the economic rules themselves. To wait for a reduction in requirements would be to run the risk of falling irretrievably behind an economy that has already changed its standards.
