From compliance to competitive edge: Why leaders may be rethinking sustainability reporting

As companies scale up their capabilities to handle the growing number of new data requirements, some are discovering something possibly unexpected. The same foundations needed to navigate today’s complex regulatory landscape—policy expertise, technology integration, assurance-ready data—can simultaneously reduce costs, uncover revenue opportunities, and sharpen competitive edge. According to the Investor Trust in Sustainability Data¹ study by Deloitte & Touche LLP and The Fletcher School at Tufts University, 83% of investors now incorporate sustainability information into fundamental analyses. The question isn’t whether to invest in reporting capabilities. It’s whether to see them as a cost center or profit engine.

The ever-moving target

“It’s less a checklist, and more an ever-moving target,” says Vijay Sharma, Sustainability Chief Commercial Officer, Deloitte Global. “Your hosepipe is under increasing pressure—and the liquid inside keeps changing.”

That pressure stems from regulatory complexity. The EU’s Corporate Sustainability Reporting Directive (CSRD) requires thousands of disclosures. Its Deforestation Regulation (EUDR) demands geospatial evidence proving commodities are not linked to deforestation. The Carbon Border Adjustment Mechanism (CBAM) adds carbon price adjustments on exports into Europe. And shifting political contexts mean standards rarely remain static for long.

The cost of missteps is rising. “The risk of misstatement is not insignificant, and it could likely increase as these standards mature,” Sharma warns. Non-compliance can lead to reputational harm; soon, it could mean shipments stuck at port and millions of dollars lost in delays.

The missing muscle

Many organizations lack the ’muscle’ to handle this scale alone. As Sharma puts it: “You need three capabilities, all at once: policy knowledge, technology integration, and assurance-ready data. Very few organizations have all three.”

This gap is echoed in Deloitte Consulting LLP’s 2024 Global Outsourcing Survey², where access to talent emerged as the number one driver of outsourcing decisions. Leaders are finding they turn to external specialists to secure the necessary skills and capacity that simply don’t exist in-house.

Building in-house teams can lead to ‘small compliance teams’ focused on filling forms rather than extracting value. Managed services, by contrast, provide access to end-to-end specialized knowledge while freeing leaders to use the data strategically and make faster, better decisions.

Sharma describes Deloitte’s approach as a kind of ‘pyramid’. At the base: reducing client burden by handling report preparation. In the middle: AI-enabled efficiency, significantly cutting the time and cost of reporting. At the top: helping clients use the same data to grow margins, improve products, and strengthen resilience.

“This is one of the areas where you can reduce risk, cut costs, and uncover new revenue opportunities while becoming a better steward of the planet,” Sharma says. 

AI at both ends of the spectrum

Jeff Schwartz, Non-Financial Reporting Disclosures co-leader, Deloitte Global, reflects on how Deloitte embeds AI across the reporting process, on both the routine and advanced ends. “At the basic level, AI can scan missing utility bills and fill gaps instantly. At the advanced level, it can analyze satellite imagery to demonstrate that supply sources aren’t encroaching on forests,” Schwartz explains. “As a professional services organization, and because AI is fallible, Deloitte’s practitioners work alongside the technology to validate results.”

The blend of automation and assurance can accelerate reporting while increasing accuracy and trust—an edge few companies can replicate alone. It also reflects where the market is headed: 92% of organizations² surveyed are leveraging or planning to leverage AI in service delivery, and 67%² have adopted outcome-based outsourcing models that emphasize results and innovation over headcount.

From compliance burden to business decision

The shift may be observed when sustainability data moves out of silos in organizations and into core business decisions. Sharma points to product-level choices: “If Product A is cheaper to build but carries a higher carbon footprint, while Product B is slightly more expensive but can command a sustainable premium, wouldn’t you want that information when making profit and loss calls?”

For example, companies that make low-carbon materials, such as low-emission steel, can use their own emissions data to access markets where carbon trade rules, like the CBAM, make strong emissions performance a key advantage.

Similarly, the process of gathering data for compliance can reveal opportunities for cost savings through circularity, from reusing materials to optimizing supply chains.

Dilip Krishna, Sustainability Chief Technology Officer, Deloitte Global, is a keen advocate for AI and its impact. “The hope for AI is not in replacing human effort, but in amplifying human intelligence. It can help turn sustainability data into decisions—showing leaders how to reduce risk, drive growth, and deliver greater impact at once.”

That’s why chief financial officers, supply chain leaders, and business-unit heads—not just compliance officers—may begin to see reporting as directly tied to growth and margin. “The flip side of compliance is opportunity,” Sharma adds.

This shift is further solidified by evolving regulatory landscapes, with frameworks like the CSRD playing an important role. As Laurent Vandendooren, Non-Financial Reporting Disclosures co-leader, Deloitte Global explains: “The CSRD establishes a framework for corporate sustainability reporting, creating important transparency for both internal and external stakeholders. It also motivates organizations to make meaningful progress on their actions and programs to become a more sustainable business.”

Vandendooren builds on this concept: “The focus has shifted from reporting to comply, to reporting to add value. Reporting is becoming a tool to help grow the business, reduce costs, and increase resilience—supporting priorities like energy transition and circularity.”

Looking ahead

Even with legislative adjustments such as the EU’s Omnibus proposal, the scope and depth of reporting requirements may be debated, but they are not disappearing.

Deloitte Global’s 2025 C-suite Sustainability Report³ found that 83% of executives surveyed increased sustainability investments in the past year, and 40% are transforming their business model to make sustainability central.

For Sharma, the conclusion is simple: “You may see reporting as compliance, but it can be an untapped strategy for accelerated, confident growth.”

References:

1. Deloitte & Touche LLP, Investor Trust in Sustainability Data, p.3

2. Deloitte Consulting LLP, 2024 Global Outsourcing Survey, p.4; p.5; p.14

3. Deloitte Global, 2025 C-suite Sustainability Report, p.4