Key takeaways:

• • • Country-by-country reporting will only increase in complexity 鈥� Australia’s enhanced Country-by-country reporting (CbCR) requirements 鈥� reconciling taxes accrued against taxes credited 鈥� are a preview of where other high-scrutiny jurisdictions are heading, and companies need to build that explanatory analysis capability now, systematically, rather than scrambling later.

    • There has to be a shared narrative from corporate teams 鈥� The EU鈥檚 public CbCR is a reputational event, not just a filing. So that means tax, communications, and investor relations teams need a shared narrative before the data goes public 鈥� inconsistencies create exposure you do not want to manage reactively.

    • Rethink your filing jurisdiction in light of changes 鈥� If EU filing jurisdiction was chosen at initial implementation and never revisited, look again. Guidance has matured, and a more efficient or better-suited option may now be available.

WASHINGTON, DC 鈥� Among the many pressing topics discussed in detail at the recent , country-by-country reporting (CbCR) and its ability to reshape the corporate tax industry, certainly had its place. Between escalating local jurisdiction requirements, the , and for deeper explanatory disclosures, CbCR has quietly evolved from a transfer pricing filing obligation into something far more strategically consequential.

The floor is just the floor

The creation of the by the Organisation for Economic Co-operation and Development (OECD) was intended as a minimum standard for countries. And now jurisdictions are increasingly layering additional requirements on top of the OECD鈥檚 basic template, resulting in a widening gap between the standard requirements and what tax authorities actually want.

Currently, Australia is the most pointed example. Australian tax authorities are now requiring multinational groups to go beyond the standard CbCR data fields and provide explanatory narratives that reconcile taxes accrued against taxes actually credited. This requires corporate tax departments to bridge the gap between financial statement accruals and their organizations鈥� cash tax positions in a way that is coherent, defensible, and consistent with positions taken elsewhere.

At the TEI event, panelists explained that for tax departments this will carry complex timing differences, deferred tax positions, or significant jurisdictional mismatches between booked and cash taxes. Indeed, this additional layer of scrutiny will need dedicated attention.

Please add your voice to 成人VR视频鈥� flagship , a global study exploring how the professional landscape continues to change.听

The broader signal matters: Australia will not be the last jurisdiction to move in this direction. So that means that tax departments should treat Australia’s approach as a leading indicator of where other high-scrutiny jurisdictions could be heading. Building the capability to produce this kind of explanatory analysis systematically 鈥� rather than scrambling jurisdiction by jurisdiction 鈥� would be the smarter long-term investment for corporate tax teams.

Public CbCR in the EU: The transparency ratchet has turned

For US-based multinationals with significant European operations, the EU’s public CbCR directive has fundamentally changed the calculus. Unlike the confidential tax authority filings most corporate tax departments are accustomed to, the EU鈥檚 public CbCR rules put organizations鈥� jurisdictional profit and tax data into the public domain, making it visible to investors, journalists, civil society groups, and organizations鈥� employees and customers.

The EU framework specifies which entities trigger the reporting obligation and which entity within the group is responsible for making the public filing. That scoping analysis is not always straightforward for complex multinational structures and getting it wrong could present both reputational and legal risk.

Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data.

For US-headquartered groups, the implications extend well beyond Europe. Public CbCR data is now being read alongside US disclosures, reporting on ESG activities, and public narratives about tax governance. Inconsistencies, including those technically explainable, could create unwanted noise about the company. This is clearly another reason why the tax function should partner across the business 鈥� in this case with the communications team 鈥� to make they both are aligned to tell the CbCR story instead of being caught off guard by a journalist or an investor during an earnings call.

Questions that US multinationals should be asking

Fortunately, US multinationals with multiple EU subsidiaries are not required to file public CbCR reports in every EU member state in which they have a presence. Instead, under the EU framework, a qualifying ultimate parent or standalone undertaking can satisfy the public disclosure requirement through a single filing in one EU member state, provided the relevant conditions are met. Germany and the Netherlands have emerged as two of the more popular choices for this consolidated filing approach, given their well-developed regulatory frameworks and the depth of available guidance on what compliant disclosure looks like in practice.

The strategic implication is meaningful. Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data. Corporate tax departments that defaulted to a filing jurisdiction early in the EU implementation process should take a fresh look. Regulatory guidance has matured significantly, and there may be a more efficient or better-suited path available than the one originally chosen.

The uncomfortable divergence

There is a notable irony in the current environment. Domestically, the IRS and U.S. Treasury’s 2025-2026 Priority Guidance Plan reflects an explicit focus on deregulation and burden reduction, detailing dozens of projects aimed at reducing compliance costs for US businesses. Meanwhile, the international compliance environment has moved in the opposite direction, adding disclosure layers, explanatory requirements, and public transparency obligations that many US businesses cannot avoid simply because they are headquartered in the United States.

This divergence has a direct implication for how tax departments allocate resources and make the internal case for investment in international compliance infrastructure. The burden internationally is not going down 鈥� indeed, it is intensifying 鈥� and that argument is now backed by concrete examples rather than projections.

3 things worth doing now

There are several actions that corporate tax teams should consider, including:

Audit CbCR data quality with Australia’s enhanced requirements in mind 鈥� If you cannot readily reconcile taxes accrued to taxes credited at the jurisdictional level, that gap needs to be closed before it becomes an authority inquiry.

Revisit EU filing jurisdiction strategy 鈥� If your jurisdictional decision was made at the time of initial implementation and has not been reviewed since, it is worth a fresh look before the next reporting cycle.

Develop an internal narrative around public CbCR data before it circulates externally 鈥� Your company鈥檚 tax story should not be a surprise to the corporate teams involved in communications, investor relations, or ESG 鈥� and in today鈥檚 world, assuming such news stays quiet is no longer a safe assumption.

While CbCR started as a tool for tax authorities, it today has become something more visible, more public, and more consequential than that 鈥� and that trajectory is not reversing any time soon.

You can download a full copy of the 成人VR视频 Institute鈥檚

Key insights:

• • • Nature-related risks underreported 鈥� Companies鈥� nature-related interfaces are underreported across industries, despite being increasingly seen as decision-useful information for investors and regulators.

    • Stricter requirements for disclosure growing 鈥� Both voluntary and mandatory frameworks are increasing their requirements for nature-related disclosure.

    • Organizations should be proactive 鈥� Getting ahead of disclosure trends means that organizations should be measuring their nature-related interface as well as integrating nature-positive transition planning to their business strategy.

As the impacts of nature loss become more prevalent, companies are on business risk and performance. This is due to both physical nature-related impacts and increasing stakeholder pressure on organizations to integrate long-term nature-positive strategies. Managing nature-related impacts and dependencies is a framework-driven mandate for all boards of directors to consider.

Why nature matters

All businesses impact and depend on the four realms of nature: land, freshwater, ocean, and atmosphere to some extent, with the highest impact sectors being . These dependencies could include the provision of water supply to an organization, or services provided by nature to a business, such as flood mitigation. A could result in a $2.7 trillion GDP decline annually by 2030. In turn, most businesses also positively and negatively impact nature.

Financial flows that were determined to be harmful to biodiversity reached , including private investment in high impact sectors, with only $213.8 billion (鈧�184.6 billion) invested in conservation and restoration. Despite this financing gap, less than 1% of publicly reporting companies currently disclose biodiversity impacts, indicating the need to align incentives and policies with nature-related outcomes.

Indeed, nature does not have a single indicator, like greenhouse gas (GHG) emissions; instead, its measurement involves multiple complex, location-specific factors. Despite this, disclosure of nature-related risks and impacts are increasingly being required by regulators.

Regulatory incentives to disclose

The disclosures being driven by regulatory frameworks include material information on all nature-related risks, particularly those requested by the International Sustainability Standards Board (ISSB) and European Sustainability Reporting Standards (ESRS). The ISSB Biodiversity Ecosystem and Ecosystem Services project (BEES) was initially considered a research workplan but was modified to a standard-setting approach.

Through its work, the ISSB due to: i) the deficiencies in the type of information on nature-related risks and opportunities reported by entities, which are identified as important in investor decision-making; and ii) the requirement of nature-related information that is not included in climate-related disclosures, including location-specific information on nature-related interface and nature-related transition planning.

On Jan. 28, all 12 ISSB members voted to , which included two important implications. One is that standard setting is to cover all material information on nature-related risks and opportunities that could be expected to affect an entity鈥檚 prospects. And two, it mandated that entities applying International Financial Reporting Standards听S1 and S2 for climate-related disclosures supplement these with nature-related risks and opportunities disclosures as well.

Similar to the ISSB requirements to report material nature-related risks and opportunities, the ESRS also requires information to be disclosed for material impacts, risks, and opportunities found in an entity鈥檚 double-materiality assessment. The Task Force on Nature-related Financial Disclosures (TNFD) and its European counterparts have been in close collaboration since 2022, and all 14 TNFD recommendations have been incorporated throughout the ESRS environmental standards.

Companies that are required to comply with the EU鈥檚 sustainability reporting mandate also will be required to collect similar data for their future ESRS data points disclosure.

Alongside regulatory requirements, there are voluntary requirements and investor pressure to consider for many organizations. These include investor coordination initiatives on nature such as Nature Action 100 and considering which investors look at Carbon Disclosure Project (CDP) data.

To use the CDP as an example, 650 investors with $127 trillion in assets they needed in 2025. Further, the CDP is increasing its disclosure requirements for nature-related data in its questionnaire as it progresses to . This includes, for example, requiring disclosures on environmental impacts and dependencies for disclosers, enhancing commodities included in the forests questionnaire, and introducing oceans-related questions in 2026.

All of these heightened requirements underscore the need to measure a company鈥檚 nature-related impacts and proximity to its nature-related issues.

Implications for company boards

To align with these additional requirements and investor expectations, corporate decision-makers should consider the questions they are asking related to nature, as well as what data is being collected in relation to the organization鈥檚 impact on nature. The following steps can give leaders a starting point for how boards should consider this information:

Track relevant developments in regulatory and investor standards 鈥� Ensure there is a management-level understanding of how nature is considered in relevant standards for the company based on its current and anticipated locations of operation and specific industry.

Measure nature-related risks and opportunities 鈥� Given that identifying material nature-risks, with a particular focus on location specificity, is a common first step across current mandatory and voluntary regulatory frameworks, organizations should conduct a regularly updated, location-specific assessment on the company鈥檚 interface with nature, especially in instances in which these issues are material. Organizational leaders should also produce financial quantification of these risks within an overall materiality assessment and corporate risk register. For guidance, the best practice across these regulatory and disclosure frameworks is to utilize the .

Make further disclosure of any material nature-related information, including financial quantification 鈥� Frameworks such as the ESRS require further disclosure of any risks that are found to be material, including financial quantification and scale of the risk.

Integrate mitigation of nature-related risks in business strategies 鈥� Upcoming standards and research, such as that from the ISSB, indicates that missing disclosure includes company鈥檚 nature-positive transition planning. Consider how to integrate nature into long-term business strategies for full alignment with upcoming regulations and standards, including establishing nature-related governance.

Adopting these processes and integrating nature into corporate decision-making will provide corporations with a more future-proof and resilient business model. The increased adoption of nature within these frameworks is driven by the clear economic impact that our current loss of nature is having. This will only continue to become more of a priority as the impacts of nature loss are increasingly felt worldwide.

You can find out more about the听sustainability issues companies are facing around the environment听here

Key takeaways:

• • • Smart resource efficiency and decarbonization are good differentiators 鈥擟oncrete gains in decarbonization, smarter resource efficiency, and rigorous human-rights due diligence increasingly distinguish market leaders from the rest.

    • Consideration for voluntary reporting is required 鈥� Companies should keep strengthening ESG data governance, involve finance and audit early, and consider voluntary alignment to maintain credibility with investors and supply鈥慶hain partners regardless of legal thresholds.

    • Ongoing monitoring of regulation is critical 鈥� Legal uncertainty will continue, likely even up to the final decision. Companies should expect ongoing uncertainty and legal risk throughout the rest of this year.

The European Union’s effort to streamline its sustainability rulebook has entered a decisive stage. Through the Omnibus initiative, the European Commission aims to align and simplify overlapping environmental, social, and governance (ESG) regulations, particularly its Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Framed as a push to enhance competitiveness, the Omnibus package reflects a broader recalibration that seeks to balance economic pragmatism with the EU’s sustainability ambition. The current goal is to finalize the legislative process by the end of 2025.

Over the past three years, the EU has assembled one of the world’s most far鈥憆eaching reporting frameworks. CSRD seeks consistency and comparability in disclosures, while CSDDD extends human鈥憆ights and environmental responsibilities across value chains. The Omnibus would narrow which companies report, reduce data points, and limit due鈥慸iligence obligations mainly to tier鈥憃ne suppliers.

Proponents argue this will ease compliance and focus effort where it matters most. Critics fear that fewer reporters and fewer metrics could dilute accountability and the CSRD’s role as a global benchmark.

Debating the details

Decision鈥憁aking now shifts to the European Parliament and the Council, followed by a trilogue, in which the institutions converge on a compromise text. The Council has already staked out a position to raise the CSRD turnover threshold to 鈧�450 million from 鈧�50 million, which would significantly reduce the number of companies under its scope. Inside Parliament, center鈥憆ight groups prioritize deregulation and cost relief, while left鈥憀eaning groups press to maintain or strengthen standards and comparability.

What happens next will determine scope and granularity. If thresholds rise and data points drop, complexity and audit costs decline, especially for smaller and midsize companies. Yet comparability could suffer if disclosures become thinner or less standardized.

The central question is whether simplification improves usability or merely softens obligations. Striking the right balance will shape the EU’s standing as a standard鈥憇etter and the usefulness of ESG data for capital allocation, supply鈥慶hain management, and regulatory oversight.

Reactions remain split. Business groups welcome burden relief and a narrower due鈥慸iligence perimeter as pro鈥慶ompetitiveness measures. Civil鈥憇ociety organizations and some investors, on the other hand, warn that scaling back disclosures could undermine transparency, reduce comparability across sectors and borders, and weaken incentives for meaningful action on environmental and social issues. The debate underscores the persistent tension between short鈥憈erm economic pressures and long鈥憈erm sustainability objectives at the heart of the Omnibus process.

What companies should do now

For companies preparing for CSRD, the Omnibus adds uncertainty. While some smaller organizations may fall outside scope, larger enterprises must continue under a simplified regime. Practical steps include maintaining strong ESG data governance, engaging finance and audit teams early, and focusing on material topics that drive performance and risk management. Companies also should track institutional positions through 2025 and adjust their programs, targets, and controls as the final contours emerge.

Regardless of their position under the current or future framework, several strategic actions can help businesses stay prepared and maintain credibility with investors and regulators alike, including:

• • • Continue to strengthen sustainability data and governance 鈥� Even if the reporting scope narrows, robust ESG data management remains essential. Companies should ensure that internal processes, data systems, and oversight structures can deliver consistent and verifiable information. This will reduce compliance risks and position those companies well for any future expansion of requirements.
    • Consider voluntary alignment with simplified frameworks 鈥� Some firms potentially falling outside CSRD scope may still benefit from voluntary reporting under frameworks such as those for small and midsize entities (SMEs). This supports transparency with lenders, investors, and supply-chain partners that increasingly may expect sustainability disclosures, regardless of legal thresholds.
    • Focus on decarbonization and risk mitigation 鈥� Beyond reporting, tangible progress on decarbonization, resource efficiency, and human-rights due diligence remains a critical differentiator. Companies that integrate these areas into strategic risk management will be better equipped to respond to global sustainability standards and maintain market access in Europe.

The Omnibus represents more than a technical adjustment to EU sustainability rules. Indeed, it is a test of how effectively the bloc can balance economic pragmatism with ambitious climate and social objectives.

While the Omnibus may lead to political compromise, it does not fully close the door on legal risk. that certain proposed changes could conflict with EU principles of proportionality and the Charter of Fundamental Rights, particularly in the absence of comprehensive impact assessments.

For companies in Europe, the key takeaway is that even after legislative adoption, the regulatory landscape may continue to evolve, which will make ongoing monitoring essential.

You can find out more about the challenges corporations face with regulatory enforcement here

Key insights:

• • • An uneven regulatory environment 鈥� While some nations (like Chile, Thailand, and South Korea) are implementing ambitious new laws for corporate human rights and environmental due diligence, the EU’s CSDDD, which is facing significant delays and potential weakening, creates a fragmented regulatory environment.

    • Litigation risk is increasing 鈥� Companies are facing growing litigation risk from both greenwashing claims and climate-related human rights cases, and this highlights the legal and reputational dangers of failing to meet stakeholder demands.

    • Disclosure risk is an issue 鈥� Companies are facing a dilemma in that while proactive compliance and transparent reporting can build trust and avoid disputes, voluntary disclosures can also become legally binding and expose them to liability.

The year 2025 has brought changes to the global landscape of supply chain risk management and corporate responsibility for human rights. Countries such as Chile, South Korea, and Thailand are actively considering or are drafting and introducing ambitious new rules that raise the bar for corporate accountability. At the same time, the Europe Union鈥檚 Corporate Sustainability Due Diligence Directive (CSDDD), which was once seen as a benchmark for responsible supply chain management, has faced delays and significant pushback.

In the meantime, companies face challenges in how they should move forward without harmonization and specificity in the regulatory and legal landscape.

Positive and negative legislative steps

So far this year, several countries have advanced strong new laws to hold corporations accountable for human rights and environmental impacts, says , Senior Policy Associate at , which is a global non-governmental organization that helps communities defend their environmental and human rights.

For example, the National Congress of Chile is considering bills that propose requiring corporations of a certain size to implement and report on due diligence efforts with respect to human rights, the environment, and climate change; and the Thailand鈥檚 Ministry of Justice is drafting a mandatory due diligence law to ensure products are free from exploitative labor and environmental harm, Berry explains.

Advocates in human rights climate cases contend that the adverse effects of climate change undermine fundamental human rights, including the rights to life, health, food, water, and liberty.

South Korea鈥檚 new legislation enacts corporate requirements through mandates in comprehensive due diligence, a Victim Support Fund, and robust grievance procedures. 鈥淭he legislation is progressive because of its broad applicability, even to financial sector actors,鈥� Berry says. 鈥淚t requires accountability for human right due diligence at every stage of a supply chain, and it mandates that business enterprises of a certain size are equipped to proactively respond to grievances and facilitate remedy where harm is found.鈥�

This legislation is significant because it would require actors across global supply chains to engage with human rights and environmental abuses regardless of whether impacts are deemed financially material.

Other regions may be moving the other way on corporate accountability, however. Recent developments in the CSDDD may have weakened its impact, with the first occurring in early 2025 and referred to as the stop the clock directive that has delayed implementation by a year. In addition, a proposal was made to raise company size thresholds, meaning that fewer companies would be mandated to report under CSDDD if this change takes effect.

The final requirements are unlikely to be defined until early 2026 鈥渂ecause of the lengthy legislative process in the European Union,鈥� says , Partner at Gibson Dunn. 鈥淭he directive must be negotiated and agreed upon by three EU bodies, which are the European Commission, the European Parliament, and the Council (representing Member States). Each body needs to develop and present its own proposal, and only after all proposals are on the table, which is expected by the end of October 2025, will the trilateral negotiations begin.鈥�

Companies in a tough spot

Litigation risk, referred to in sustainability circles as greenwashing, is growing for corporations as civil society organizations become more active in bringing claims related to environmental claims and human rights abuses. Consumers, especially younger generations like Gen Z, are increasingly expecting higher standards and greater transparency from businesses.

Community participants are also active in bringing climate-related litigation. Advocates in human rights climate cases contend that the adverse effects of climate change undermine fundamental human rights, including the rights to life, health, food, water, and liberty. Indeed, high-profile lawsuits, such as , illustrate the expanding global threat of legal action for companies that fail to meet stakeholder expectations.

“There was recently a case in Germany where a Peruvian farmer was trying to get damages from a German utility provider,鈥� Fromholzer explains. The farmer argued that the utility provider鈥檚 greenhouse gas emissions contributed to the melting of glaciers in Peru and that this threatened the farmer鈥檚 hometown with flooding. While the claim was not successful, climate change groups hailed it as a win because the judges stated that energy companies could be held responsible for the costs caused by their carbon emissions.

Today, many corporations find themselves in a difficult position as they navigate mounting risks from both proactive and reactive approaches to sustainability and human rights reporting and compliance. On one hand, adopting proactive compliance strategies and robust grievance mechanisms can help companies avoid costly disputes and build stakeholder trust, but it is not without danger. Public disclosures of this information 鈥� even voluntarily 鈥� can later become legally binding and expose companies to liability.

Companies face challenges in how they should move forward without harmonization and specificity in the regulatory and legal landscape.

Yet, adopting proactive compliance strategies could offer advantages to those companies facing evolving regulatory requirements and social expectations. By implementing robust grievance mechanisms and addressing risks early, businesses can avoid costly litigation, reputational damage, and regulatory penalties.

鈥淎ccountability mechanisms and grievance mechanisms aren鈥檛 scary,鈥� Berry says. 鈥淭hey help to harmonize relationship with these communities鈥� rather than approach these issues defensively [and] litigiously, why not approach them proactively?鈥� Indeed, early action can often future-proof operations and build trust with stakeholders.

At the same time, publishing corporate statements on a voluntary basis without the specifics of final legal requirements in legislation holds risk as well. Fromholzer cautions that in the case of CSDDD, voluntary disclosures made today may become legally binding statements required by the EU鈥檚 Corporate Sustainability Reporting Directive (CSRD) that could be used in future litigation.

A published statement based on the requirements of CSRD 鈥渋s now a legally binding statement which you really must be able to defend at the risk of liability,鈥� Fromholzer says. 鈥淚t is no longer marketing but now is part of the annual accounts with all the liability attached to it… [companies] are cornered from both sides. Again, one is the greenwashing approach, and the other one is the legally binding nature of the statements they are now forced to make.鈥�

Recommended steps for companies

Either way, companies implementing robust grievance mechanisms and publishing accurate statements backed by auditable data with assurance is a pathway forward through the complex terrain of risk. To effectively address human rights and environmental risks, Berry suggests considering the expectations outlined by for lawmakers advancing human rights and environmental due diligence laws.

To begin, companies should conduct a comprehensive mapping of their entire supply chain, including subsidiaries and business partners, to identify and evaluate potential risks. Then, companies must create and publicly release comprehensive due diligence policies that align with international standards, such as the and . Finally, companies must implement effective grievance systems that provide accessible, safe, and responsive channels for stakeholders to raise concerns and seek redress. Maintaining ongoing dialogue with affected communities and rights-holders cultivates trust and guarantees their substantive involvement in business decision-making.

Once this implementation phase is complete, companies should regularly monitor their operations and publicly report on both adverse impacts and the effectiveness of remediation efforts. They should also consider assurance by a third party for risk mitigation.

Despite ongoing changes and uncertainties in global legislation, the movement toward greater corporate accountability continues to gain momentum. By aligning their practices and obtaining assurance for corporate reporting, companies can stay ahead of regulatory developments, build trust with stakeholders, and reduce their risk exposure.

You can find out more about how companies are navigating disclosure and reporting rules here

Key takeaways:

• • • Understanding the announcement 鈥� The G7 鈥渆xemption鈥� is an informal understanding, not a legal change.

    • Rules still in effect 鈥� Pillar 2 rules remain in effect across most jurisdictions, and US multinationals must still comply. Compliance and reporting obligations will continue and may increase.

    • Corporate tax departments need to keep informed 鈥� Tax departments should stay the course and be prepared to adapt as guidance evolves.

The global tax landscape is in flux, especially for US multinationals navigating Pillar 2鈥檚 global minimum tax rules. The G7鈥檚 recent announcement of a potential exemption for US-parented groups from certain aspects of Pillar 2 has raised questions and cautious optimism. To provide clarity on this issue, Jacob Fulton, Head听of the Quantitative Tax Practice for , shares his insights with Nadya Britton of the 成人VR视频 Institute (TRI).

Nadya Britton (TRI): The G7鈥檚 June announcement about a Pillar 2 exemption for United States-based multinationals created a stir. Can you explain what this actually means?

Jacob Fulton (Orbitax): The announcement suggested that G7 countries 鈥� led by the US, Canada, and the United Kingdom 鈥� had reached an understanding to exclude US-parented groups from the Income Inclusion Rule and Undertaxed Profits Rule under Pillar 2. On its face, it sounded like significant relief for US multinationals.

However, there鈥檚 little detail on how this would work in practice. The statement is more of a political commitment than a change in law. The Qualified Domestic Minimum Top-up Tax (QDMTT) remains in place, and the legislative removal of Section 899 from the One Big Beautiful Bill in the US doesn鈥檛 change the current Pillar 2 obligations for multinationals. So, while the announcement sounds promising, it introduces more questions and uncertainty rather than offering clear, immediate relief.

Britton: Given the uncertainty, should the in-house tax departments of US multinational change their approach to Pillar 2 compliance?

Fulton: No, they should not 鈥� the G7鈥檚 understanding doesn鈥檛 override existing laws. More than 50 jurisdictions have enacted Pillar 2 legislation, and those rules remain in force. For tax years 2024 and 2025, US multinationals are still subject to the same compliance and reporting obligations as before.

It鈥檚 important for corporate tax departments to stay the course. While there may be future guidance, we don鈥檛 know the timeline or the specifics. Delaying or pausing Pillar 2 implementation based on this announcement would be risky and could leave companies noncompliant if nothing changes.

Britton: What about tax planning? Is there an opportunity for companies to adjust their strategies in light of the G7 announcement?

Fulton: Not really. The current uncertainty makes tax planning more complex, not less. While it鈥檚 tempting to consider planning opportunities, there鈥檚 no concrete framework for how the exemption would be applied, or even if the exemption will be applied.

The Pillar 2 regime already contains robust transition rules designed to prevent companies from exploiting gaps or planning opportunities during the rollout. Any new guidance could target retroactive planning aimed at leveraging this potential exemption. Until there鈥檚 greater clarity, companies should be cautious and avoid making significant planning changes based on speculation.

Britton: Beyond the exemption, what broader challenges does Pillar 2 present, especially now?

Fulton: Pillar 2 was initially envisioned as a uniform global minimum tax, but in practice, it鈥檚 fragmented. Each jurisdiction has implemented the rules on different timelines and with varying interpretations. The G7鈥檚 move may add further complexity, as only a few countries are part of this understanding. In fact, most jurisdictions have not agreed听to adjust their laws to this point, so US multinationals could face inconsistent rules and additional compliance requirements.

If only some countries adopt the exemption for US groups while others do not, companies may need to navigate a patchwork of rules, increasing the risk of errors and duplicative reporting. This environment heightens the need for robust technology solutions to manage calculations, track legislative changes, and handle complex reporting obligations.

Britton: Does this mean the compliance burden for US multinationals is likely to increase?

Fulton: Yes, absolutely. The G7 announcement, rather than simplifying things, adds another layer of complexity. Even if some countries provide relief, others may not, so corporate tax departments need to be prepared for additional filings and ongoing compliance rules in multiple jurisdictions.

For example, even where the Global Anti-Base Erosion (GloBE) Information Return might not be required due to an exemption, local jurisdictions may impose increased QDMTT reporting or other compliance burdens. Each country鈥檚 requirements are unique, and in many cases, they apply regardless of whether a tax liability exists. The compliance workload will not decrease in the near term.

Britton: Given all this, what should in-house tax departments be doing right now?

Fulton: Tax departments should continue with their current Pillar 2 compliance and implementation plans. It鈥檚 critical to keep up with local legislation, maintain documentation, and be prepared for reporting in every jurisdiction in which it鈥檚 required.

Investing in technology is more important than ever. Automated solutions can help track legislative changes, manage calculations, and streamline reporting. As the rules evolve and complexity increases, manual approaches will struggle to keep pace.

Finally, corporate tax teams should stay engaged with industry groups and advisors, monitor new guidance closely, and be ready to adapt as the situation develops.

Britton: Any final thoughts for US multinationals navigating this evolving landscape?

Fulton: The G7鈥檚 announcement is a headline, not a new law 鈥� and it doesn鈥檛 change the immediate reality for US multinationals. The best course is to continue preparations, invest in robust technology, and remain vigilant for further developments.

As Pillar 2 evolves, flexibility and readiness to adapt will be critical. While the promise of an exemption is attractive, the reality is increased complexity and ongoing compliance obligations for the foreseeable future.

You can find more of our coverage of听the impact of the One Big Beautiful Bill Act听here

One of the major tailwinds that could positively impact the data volume challenge 鈥� and the data challenge more broadly 鈥� is AI adoption at an early stage for sustainability reporting. Nearly 90% of respondents to the Outlook research said they expect AI to have a material impact on sustainability reporting, compared to 67% who said the same in .

For those organizations which already are using AI, it is revolutionizing sustainability reporting by enhancing data collection, monitoring, and analysis processes. With the capability of efficiently managing vast datasets to help to improve the accuracy and reliability of sustainability reports, these technologies automate resource-intensive tasks and create additional bandwidth for sustainability professionals to focus on strategic sustainability initiatives.

You can join us for , produced by Reuters Events, on June 23-24

In fact, leading organizations which have more ambitious reporting scopes are likely to have transitioned away from storing sustainability data manually and instead embraced technology tools to assist with data collection, analysis, and reporting. Interestingly, leaders of these organizations are also more likely to anticipate AI having a significant impact on reporting practices, which is most likely attributable to them having already experienced using technology in their sustainability data processes. Indeed, half are already using AI to support sustainability reporting, according to Reuters Events research.

In addition, emissions reporting is another area in which the use of AI is increasing efficiency and effectiveness. More specifically, 37% of respondents from organizations reporting Scope 1, 2, and 3 emissions with assurance are already leveraging AI in their reporting processes, while just 22% said they are currently using AI to support reporting today without external assurance.

Another primary use case is utilizing AI in materiality assessments. This is also an area that respondents say is a priority for investment over the next three years, although it is not as popular as it was in last year鈥檚 study. There is at least some indication that sustainability practitioners believe the technology is not yet mature enough for widespread use.

AI won鈥檛 solve data and reporting challenges completely

As organizations increasingly integrate AI into sustainability reporting, they encounter several challenges that must be addressed to realize the technology’s full potential. Data quality and the cost of integrating new technology into existing systems are two key areas of concern. In fact, 50% of respondents in the Reuters Events research highlighted data quality as a significant concern. Poor data quality can undermine the accuracy of AI-driven insights, and as a result, it is crucial for organizations to invest in robust data governance practices.

Additionally, integrating AI technologies can be costly and complex. Indeed, it requires careful planning and execution to ensure seamless functionality within existing systems. External assurance becomes vital in this context, providing independent verification of data accuracy and bolstering confidence in AI-driven reports. Organizations must prioritize these considerations to harness AI effectively, ensuring that sustainability reporting is both reliable and insightful. This approach will help overcome obstacles and drive meaningful progress in sustainability practice.

Technology seen as a key driver of efficiency

While AI is not expected to impact sustainability reporting for a while, technology is still seen as a key enabler for CSRD compliance. The popularity and adoption of reporting-related tools continues to evolve over time. According to the chart below, the top three tools in 2025 and those that are expected to be most popular in 2028 are internal data solutions, supplier surveys and audits, and data platforms for environment, social & governance (ESG) initiatives.

Procuring the right tool or technology can be critical for organizations that want to become more efficient and effective in their sustainability reporting, but so often this comes down to selecting the right vendor. In fact, sustainability practitioners are most likely to be driven by cost when it comes to selecting vendors. More than three-quarters (76%) of respondents identified cost as a key selection criterion for vendors, a greater share than the 61% of respondents who did so in last year鈥檚 survey.

This is why it is essential to balance investing in AI-enabled technology solutions, improving data governance, and seeking external assurance to ensure data accuracy and integrity. This process involves developing comprehensive strategies for managing data volume and quality, in order to bolster confidence in AI-driven reports and facilitate seamless integration within existing systems.

The EU’s Omnibus proposals have undeniably influenced CSRD strategies. As data management challenges persist, AI adoption presents a promising solution but only when accompanied by effective governance, assurance, cost effectiveness, and proper vendor selection.

You can find more about the challenges around Sustainability here

This effort was originally undertaken because companies argued that the reporting requirements for the European Union鈥檚 Corporate Sustainability Reporting Directive (CSRD) and its Corporate Sustainability Due Diligence Directive (CSDDD) were too onerous and in need of simplification. Furthermore, supporters of the omnibus discussions argued that CSRD and CSDDD in their original form placed significant compliance costs on companies unnecessarily and reduced the competitiveness of the European Market. Indeed, supporters of the omnibus contended that EU region companies were hindered in their ability to compete with other companies around the world, especially in the wake of the deregulation movement in the United States under the new presidential administration.

Critical views of the omnibus proposal vary widely, but agreement among the vocal chorus of dissenters is emerging. “The main issue at the heart of the EU’s omnibus discussion is ,鈥� stated says Andreas Rasche, Professor of Business in Society & Associate Dean at Copenhagen Business School in recent post, adding that streamlining regulations can indeed facilitate better alignment and implementation. 鈥淭he narrative that reporting and due diligence are a costly burden that hinders competitiveness is misleading and misguided. This inaccurate perception is the root of the problem, rather than the desire for simplification itself.鈥�

Likewise, Carol Adams, chair of the Global Sustainability Standards Board and emeritus professor of accounting at Durham University Business School, emphasizes that the omnibus proposal not only hinders green growth but also compromise potential long-term value creation. 鈥淲hile appeasing those advocating for less regulation, and reduced transparency, , history shows that taking the perceived easy path could come with significant long-term costs and lost opportunities.鈥�

Limitations of cost narrative

In a , Rasche contends that a false narrative has created circumstances in which simplification processes became deregulatory measures. By highlighting the cost narrative, critics of regulatory measures construct an inaccurate binary choice between obtaining dependable sustainability information and remaining competitive in the market. In reality, there is limited evidence to support the claim that reducing reporting costs will lead to increased competitiveness, mostly because costs depend on a broader set of factors, such as talent and labor.

Further, compliance costs tend to decrease over time as companies develop routines, overcome initial setup costs, and industry experts establish best practices. Therefore, from a cost perspective, rolling back regulations shortly after implementation doesn’t make sense. A more effective approach would be to focus on the value of sustainability reporting and due diligence, rather than getting bogged down in a flawed cost narrative.

Post-omnibus: How to build a stronger value narrative

Sustainability is key to both business and societal progress, but many companies struggle to demonstrate the financial benefits of their sustainability initiatives. To address this, the NYU Stern Center for Sustainable Business created the听. This approach connects sustainability efforts with financial outcomes and provides a stronger business case for existing and future sustainability projects, according to听, Director of NYU Stern Center for Sustainable Business.

By quantifying the comprehensive range of costs and benefits, including intangible factors, the ROSI framework enables organizations to drive sustainable growth and create long-term value 鈥� and history demonstrates positive aspects for reporting.

For instance, the alignment of financial reporting that started decades ago still provides benefits in the present, Adam explains. Europe embarked on a significant journey to align financial reporting regulation across member states, and the leadership position that Europe took helped address the many differences in financial reporting practices across jurisdictions. From there, the aim of fostering cross-border investments, bolstering economic integration and access to capital, and reducing the costs of reporting across multiple markets was moved forward.

Further, collecting and analyzing environmental, social & governance (ESG) information creates value in many ways within the ROSI framework. And doing so helps to price externalities and can support capital allocation to enhance a firm鈥檚 understanding of key strategic risks, such as the risk of value chain disruption, says Rasche.

Finding the path to value

How reporting and due diligence interact with firm-level value creation depends on how a company defines and creates value. There is no silver bullet. The point is that an improved value narrative around the CSRD and CSDDD and more broadly, sustainability should be used to shape the rationale (the Why) that underlies firms鈥� engagement with such regulations.

However, transitioning from a focus on costs to a focus on value does not mean blindly relying on the business case for sustainability. The false choice between implementing ambitious sustainability regulations and maintaining competitiveness remains short-sighted. Indeed, there are tangible benefits to sustainability. For example, making sustainability part of a company鈥檚 DNA could involve amending the required elements of capital project investment to include an explanation of how the project helps to fulfill the company鈥檚 purpose, vision, and values while reducing costs for employee attrition.

Given the ongoing discussion of the omnibus proposals and likely future negotiations around regulatory requirements, companies should take several concrete actions, including:

Embed sustainability into core business operations 鈥� It is crucial to understand where in the operations the lenses of sustainability are or could be trained upon, such as areas of听risk management听and听financial workflows. The ROSI framework and industry-specific work in the health, apparel, and food and agriculture fields, for example, offers a valuable framework to positively and meaningfully create value and enhance competitiveness.

Identify the financial channels of product inputs with sustainability attributes 鈥� To understand how to integrate sustainability into the DNA of companies, it is essential to identify how sustainability can drive performance and enterprise value through traditional financial channels, such as revenue, expenses, assets, liabilities, and the cost of capital, all of which can help determine the value of a company.

The EU鈥檚 proposed omnibus package, aimed at simplifying reporting requirements, is based on a misleading narrative that prioritizes short-term cost savings over long-term value creation and competitiveness. Instead, companies should focus on the perceived costs of compliance and do the work necessary to analyze how sustainability can save costs, drive growth, create long-term value, and enhance competitiveness.

You can find out more about how organizations are听handling the challenge of sustainability听here

Likewise, research has shown that the announcement of an omnibus is part of a broader policy shift aimed at making the EU more industry-friendly by deregulating 鈥� an idea that鈥檚 heavily influenced by the report on EU competitiveness released by former Italian Prime Minister Mario Draghi.

Proponents of the omnibus package came from some businesses in Germany and France, but the decision was also met with disappointment from environmental and human rights advocates, several EU governments, and some investors. In addition, the goals of the EU鈥檚 sustainability due diligence and company reporting rules.

What the omnibus proposal says about reporting & due diligence requirements

The proposed simplification of EU sustainability regulations in the omnibus scales back previously approved obligations on companies to address human rights and environmental concerns as part of the EU鈥檚 Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), and the EU Taxonomy.

Indeed, some of that may impact the CSDDDD include:

Extending the deadline 鈥� The first companies required to report will now have an additional year to comply, with the deadline moving to mid-2028, from mid-2027.

Weakened supply chain requirements 鈥� Companies will only be required to apply the rules to their direct suppliers, rather than to all subcontractors and suppliers throughout their entire supply chain. There is an exception for cases in which there is a beyond Tier One suppliers. However, this is a departure from the risk-based approach, according to the recent response to the omnibus proposal by the .

Reduced monitoring frequency 鈥� Companies will only be required to monitor the effectiveness of the measures taken every five years.

Guidance for companies while omnibus negotiations are underway

Human rights advocates are concerned that the omnibus proposal may convey to businesses that addressing human rights and environmental issues on a global scale are no longer a pressing concern.

While the simplification package is negotiated, it can be tricky for companies to know how to navigate this time of uncertainty. , co-founder of , works with companies on the practical implementation of human rights due diligence. According to Quiachon and her team, as businesses face an uncertain legal landscape with the evolving omnibus proposal, a key question often arises: Should we continue investing in human rights due diligence or wait for clearer guidelines?

The answer, based on practical observations, is clear 鈥� those businesses that have already invested significant resources in due diligence processes around human rights should continue those efforts 鈥� because stopping now would undermine these investments and destabilize supplier relationships.

In addition, companies that focus solely on compliance 鈥� adhering to the minimum legal requirements 鈥� risk missing the bigger picture. A risk-based approach allows for a more comprehensive understanding of supply chain vulnerabilities that can help ensure that businesses can better manage potential human rights risks deeper in the supply chain, where violations are often hidden.

Therefore, CORE鈥檚 key recommendations for the short term include:

• • • Recognizing human rights due diligence as a core business responsibility and path to long-term resilience: Human rights due diligence is not an optional component of a sustainable business strategy; rather, it is a fundamental requirement for responsible corporate governance. No company should wait for economic reasons to address issues like forced or child labor. Indeed, businesses that engage with these challenges early will be better positioned for long-term stability and societal expectations.
    • Leveraging human rights due diligence as a strategic advantage: Companies should treat their due diligence efforts around human rights as more than a regulatory requirement. In fact, company leaders should view it as a long-term strategy that offers a competitive edge. Businesses already practicing human rights are better prepared for both current and future regulatory requirements across multiple markets. They should continue refining processes, as new empirical data and learning-based guidelines will make implementation more efficient. A purely compliance-driven mindset can leave blind spots, whereas a proactive, risk-based approach ensures more informed and effective decision-making.
    • Ensuring continuity despite limited resources: Many companies face resource constraints and as a result, sustainability activities may be de-prioritized 鈥� however, conducting due diligence around human rights is still a requirement for many businesses. While federal laws in the US may not be as extensive as those in Europe, several key regulations and trends are pushing US companies to adopt human rights due diligence practices, including the Uyghur Forced Labor Prevention Act and Section 1502 of the Dodd-Frank Act on conflict minerals. Now is the time for companies to stay the course on human rights risk management, even if only gradual progress is possible. In fact, they need to maintain relationships with suppliers and continue educating internal teams on human rights risks.

The EC’s omnibus proposal to relax corporate sustainability regulations for European businesses has sparked a significant debate, with some businesses supporting the proposed changes while some investors, companies, and human rights advocates express concern about diminished accountability.

To deal with this regulatory uncertainty, companies should continue investing in human rights due diligence as a strategic advantage rather than merely a compliance requirement. They also should recognize it as essential for long-term business resilience and a critical way to meet societal expectations regardless of changing legal frameworks.

You can find more on this topic in the 成人VR视频 Institute鈥檚听Human Rights Crimes Resource Center

Modern slavery, forced labor, and human trafficking are interconnected concepts with significant overlap. Modern slavery is an umbrella term encompassing both forced labor, which involves work performed involuntarily under threat of penalty; and human trafficking, which entails the recruitment, transportation, and exploitation of individuals through force, fraud, or coercion.

All three concepts involve the exploitation of vulnerable people and deprivation of individual freedom. Common indicators include restricted movement, debt bondage, withholding of wages, retention of identity documents, and threats of violence or deportation. The key difference is that human trafficking specifically involves movement or recruitment of victims, while forced labor and modern slavery may occur without relocation.

Key regulatory approaches

Several jurisdictions have enacted laws requiring that companies conduct human rights due diligence or report on their efforts to address modern slavery risks in their supply chains. For example, the European Union’s Corporate Sustainability Due Diligence Directive mandates due diligence for large companies operating within the EU; while the United Kingdom, Australia, and Canada have modern slavery reporting laws that require companies to publish annual statements on their anti-slavery efforts. Also, the California Transparency in Supply Chains Act requires certain companies to disclose their efforts to eradicate slavery from their supply chains; and Japan has issued non-binding guidelines recommending human rights due diligence. The US and EU also have specific due diligence and reporting requirements related to conflict minerals.

Bans on imports is the second most common regulatory approach across jurisdictions, with these import prohibitions driving companies to conduct increased supply chain due diligence. Key national requirements include:

• • • The US prohibits imports of goods made with forced labor under Section 307 of the Tariff Act of 1930. This has been strengthened by the Uyghur Forced Labor Prevention Act (UFLPA), which created a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in the Xinjiang region of China or produced by an entity on the are made with forced labor.
    • Canada and Mexico implemented similar import bans under the United States-Mexico-Canada Agreement.
    • The EU recently adopted a regulation prohibiting products made with forced labor from being placed on the EU market or exported.

Key features of an effective compliance program

Corporate compliance & risk professionals who want to design an effective due diligence program to combat human rights abuses in supply chains need to understand that this effort requires a comprehensive and adaptable approach with the flexibility to align with international standards while accommodating jurisdiction-specific requirements. Key components and steps to guide these efforts include:

Policy development 鈥� Develop and integrate a human rights policy into company operations, clearly stating commitments to eradicating human rights abuses. This policy needs to align with international standards, such as the and those of and any additional requirements of those jurisdictions in which the company operates where there are modern slavery laws. This policy should be communicated across the organization and its supply chain partners.

Risk assessment 鈥� Conduct a thorough risk assessment across the supply chain to identify areas in which modern slavery, forced labor, or human trafficking may exist. Engage stakeholders and those with more localized knowledge in this assessment process.

Set up due diligence processes for assessment of risks 鈥� Because clear due diligence processes are needed for consistency, companies should incorporate a systematic approach to regularly assess the effectiveness of their due diligence efforts by identifying and assessing potential human rights impacts and outlining prevention and mitigation of identified risks. This formal approach also should include clear metrics and indicators to measure progress and identify areas for improvement.

Create monitoring and reporting mechanisms, including on-site auditing 鈥� Companies should prioritize the implementation of comprehensive monitoring and reporting systems by establishing a consistent reporting schedule. They also should share findings with both internal and external stakeholders, create user-friendly reporting mechanisms that allow for easy data collection and analysis, and regularly review and update these systems to adapt to changing circumstances and emerging best practices in human rights compliance. Equally, protocols for open feedback channels and grievance mechanisms also are important for an effective due diligence system. In the case of forced labor compliance, it is particularly important to engage in regular on-site auditing.

Training and awareness 鈥� Implementing regular training for employees on the policies and procedures around identifying and addressing human rights abuses is an essential operational mechanism. Equally, training and building collaboration with supply chain partners are key to pinpointing and remedying human rights breaches.

Looking beyond the horizon

Moving forward, businesses must stay informed about emerging global trends, such as increased international cooperation and evolving legislation, to proactively address human rights abuses and maintain ethical supply chain practices. Indeed, the global landscape of regulations and enforcement actions targeting human rights abuses in supply chains continues to evolve rapidly, with more jurisdictions implementing due diligence requirements, import bans, or other measures to combat modern slavery, forced labor, and human trafficking.

Staying ahead of emerging requirements and potential regulatory changes will be crucial for businesses to mitigate risks and ensure ethical, compliant supply chains in this complex regulatory environment.

For more on approaches to 听here

This SME deadline follows that of larger companies, which must submit their 2025 data in the beginning of 2026. With this period less than 12 months away, it is likely that 2025 will serve as a crucial time for large organizations. For many proactive organizations, this will be a time to invest resources in honing data collection and reporting methodologies. Many organizations will also need to identify gaps in their data and capabilities, along with identifying opportunities to enhance the reporting process for 2026.

Some anticipated areas of improvement include the development of industry-specific standards and best practices for compliance, as larger corporations focus on prioritizing their most significant risks, opportunities, and impacts.

Additionally, there will be an increased emphasis on engaging with and supporting suppliers, including SMEs. This focus aims to achieve greater clarity and visibility in supply chain data, ultimately contributing to more comprehensive and accurate reporting.

This makes 2025 potentially a tumultuous year for SMEs, according to , the CEO of Ascentys, a Switzerland-based sustainability technology provider. Indeed, there are many challenges on the horizon to meet the growing demands for reporting around areas of environmental, social & governance (ESG) activities 鈥� and cost, lack of resources, data capture, and education and knowledge all have been cited as for SMEs.

Getting results from investment

As a result, SMEs need to take action now by focusing on getting the most return on investment from their limited resources, and two critical ways they could do that include:

Partner with customers now听

To navigate these issues, it is wise for SMEs to proactively engage with their large customers to understand their customers鈥� ESG data requirements and expectations. By partnering with customers now, SMEs can gain valuable insights into the specific metrics and information they need to collect and gain clarity on what to prioritize for effective allocation of resources. This collaboration can also provide additional capacity for the future.

To implement this recommendation, SMEs should start by identifying the key stakeholders within their customer organizations that are involved in ESG initiatives, such as sustainability officers or procurement managers, advises Robles.

Specifically, SMEs should schedule regular meetings or workshops to discuss ESG reporting requirements, challenges, and potential solutions. They should also foster open communication and collaboration with customers, trade associations, and chambers of commerce to strengthen their business relationships and potentially uncover new opportunities for sustainable growth.

Likewise, collaborating with customers allows SMEs to stay head of the curve on evolving regulations, learn from the experiences of their large customers, and proactively align processes to meet evolving expectations.

Invest in technology and human capital听

An Accenture poll released around the time of the World Economic Forum in late-January to be adopted at scale within their organizations in 2025, up from just 37% who said that in 2024.鈥疉nd, according to another , 44% of working hours in the United Sates are in scope for AI-enabled automation or augmentation.

Consequently, 2025 will likely be a critical year for SMEs to eliminate time-consuming and resource-intensive efforts around manual data collection.鈥疘t can be difficult to track progress and report accurately on sustainability metrics because inadequate technology and systems make the collection, management, and analysis of sustainability data laborious.

However, SMEs can automate data collection and enhance decision-making capabilities by leveraging AI-powered tools and analytics. This results in reducing time and errors associated with the use of manual processes.

Part of making informed technology investment requires scanning the landscape of providers to find solutions with advanced data management capabilities that align with the company’s specific needs and maturity level. For example, you should select tools that not only offer reporting functionalities but also provide analytics that can unlock business value.

As part of this investment diligence, Robles also recommends doing a thorough workforce assessment to identify skills gaps and opportunities for upskilling. This helps to ensure that your organization鈥檚 human capital is equipped to maximize the potential of these new tools.

Simultaneously, SMEs should seek partnerships with industry leaders and government agencies to help develop training programs that align with their long-term strategies. These collaborations can help build internal capabilities and provide employees with the necessary skills to navigate the evolving landscape and effectively utilize new technologies.

Investing now for the future听

As the latter half of the 2020s unfolds, technology will play a bigger role in sustainability and its reporting. Indeed, predictive analytics, benchmarking, and scenario-planning tools will be used more as data management workflows and capabilities mature, aided by evolving AI use cases. However, this will mean organizations will need to pay special attending to how their data is maintained and used, including taking steps to improve data cleansing and reconciliation, as well as carefully managing data co-mingling across different internal systems to better address data gaps seamlessly. While some technology providers already do this, the use cases will begin to trickle further down as more companies start to report their data.

In the meantime, sustainability will remain both a challenge and growth opportunity for SMEs. By partnering with customers and investing in technology and human capital, SMEs can secure their future and transform sustainability into a strategic asset as a resilience-building capability and a competitive differentiator.

You can learn more about how companies are managing here