Over the past few years, environmental, social, and governance (ESG) reporting has become a staple of corporate strategy. But with recent regulatory shifts—particularly the EU Omnibus Package proposing simplifications and delays to CSRD requirements—many companies are wondering: should we still invest in ESG reporting now?
The short answer? Absolutely.
Even if timelines move or thresholds change, the case for ESG remains stronger than ever, because ESG is not just about compliance—it’s about value creation. Which, at its core, is a very tangible business benefit: better access to cheaper capital.
In this blog post, we’ll explore why companies need to stay the course on ESG activities and how doing so directly influences their financial strength, market positioning, and long-term growth.
ESG is no longer just a compliance obligation
Let’s start with a fundamental truth: regulatory compliance was never the primary reason to invest in ESG.
Sure, frameworks like the CSRD (Corporate Sustainability Reporting Directive) added urgency, and many companies began building ESG capabilities to meet these regulations. But smart CFOs and sustainability leaders quickly realized that robust ESG practices go far beyond tick-in-the-box exercises. When analyzed and used correctly, ESG practices unlock deeper, more strategic business outcomes.
Now, with the EU Omnibus Package proposing reduced CSRD scope and extended deadlines, some companies—particularly newly exempt ones—may be tempted to pause. This would be a misstep. Regulatory delays don’t change the growing importance of ESG. In fact, they present an opportunity to strengthen ESG foundations and position the business for capital access, competitive differentiation, and long-term resilience.
The link between ESG and cheaper capital
One of the most compelling reasons to stay committed to ESG? Cost of capital.
Research shows that companies with higher ESG scores tend to benefit from lower borrowing costs and better financing terms. This isn't just marketing spin—it’s backed by data.
Lower risk, lower rates
Investors and lenders view strong ESG performance as a proxy for long-term risk mitigation. Why? Because ESG transparency helps highlight a company’s ability to manage resource constraints, regulatory pressure, reputational damage, and operational inefficiencies. As a result, companies that report on their sustainability practices—and perform well—are rewarded with improved creditworthiness and lower interest rates.
In fact, analysis from MSCI found that a company’s ESG score is negatively correlated with its cost of capital—meaning the higher the ESG rating, the cheaper it becomes to access funding across debt and equity markets.
A broader pool of capital
Beyond traditional banks, there’s also a growing pool of capital from ESG-focused investors, especially in the private equity and private debt space. These investors are increasingly required by their own limited partners (LPs) to demonstrate ESG integration within their portfolios. In practice, this means investors are actively looking for ESG-compliant opportunities. If you’re not able to show robust ESG data, you may be excluded from that capital flow entirely.
Companies that embrace ESG now can differentiate themselves early by tapping into sustainability-labeled funds, green bonds, and low-interest sustainability-linked loans that are otherwise out of reach.
5 Additional ESG advantages
Access to cheaper capital is a powerful incentive, but it’s far from the only reason to commit to ESG long-term. Here are five other key business benefits:
1. Investor confidence and market reputation - Investors no longer view ESG as a “nice to have.” It’s an evaluation criterion. Whether it’s for IPO readiness, M&A activity, or debt issuance, your ESG track record increasingly influences investor decisions. Transparent reporting sends a strong signal about your strategic foresight and commitment to responsible growth.
2. Operational efficiency - Many sustainability efforts uncover resource inefficiencies—leading to real savings. From reducing energy consumption to optimizing supply chains, ESG initiatives often reveal opportunities for cost reduction and margin improvement. Just ask companies like 3M, whose Pollution Prevention Pays program has saved them over $2 billion.
3. Talent attraction and retention - According to PwC’s Global Workforce ESG Study 2024, nearly 20% of workers value ESG policies as much as or more than salary. In a competitive labor market, ESG leadership can help you recruit purpose-driven talent and retain high performers who want to work for companies that align with their values.
4. Customer preference and market access - From B2C to B2B, customers are prioritizing sustainability. High ESG scores can earn customer trust and allow brands to charge a premium or win contracts. For example, 69% of TMT (Technology, Media, and Telecommunications) companies report that their customers require ESG disclosures in RFPs—especially around greenhouse gas emissions.
5. Future-proofing against regulatory risk - Yes, some regulations are easing (for now), but ESG will remain central to policy agendas in the EU and globally. By building ESG capacity today, your company will be ahead of the curve when enforcement ramps up again and will adapt faster to new rules, like the proposed double materiality and assurance mandates.
What about SMEs? The case for voluntary reporting
Smaller companies might think ESG is only relevant for large, listed firms—but this is changing quickly. The introduction of the Voluntary Sustainability Reporting Standard for SMEs (VSME) provides a lightweight framework for non-listed firms to build ESG capabilities now, even without formal obligations.
Doing so offers two major advantages:
- Access to financing and credit providers who require ESG transparency.
- Readiness for future thresholds or value chain requirements from larger partners.
You wouldn’t run a marathon without training, so be sure to treat your business the same way. Invest in VSME for your business so you are ready when ESG expectations arise for your business.
ESG data: The foundation of strategic insight
To unlock the value of ESG, businesses need more than good intentions—they need reliable data. Without it, reporting becomes manual, slow, and error-prone. With it, ESG becomes actionable.
Lucanet’s ESG platform helps companies collect, structure, and analyze ESG information with the same rigor they apply to financials. Our platform integrates financial and non-financial data, automates double materiality assessments, and simplifies compliance with frameworks like CSRD and VSME. Lucanet turns ESG reporting into a competitive advantage for companies to use clear, auditable insights they can report with confidence and make informed, forward-looking decisions.
From decision-making to investor reporting, ESG data is the bridge between commitment and impact. With the right tools, your data becomes a strategic asset that drives growth and financial agility.
Stay the course
The regulatory environment may be shifting, but the direction of business is clear: sustainability is strategic. ESG is no longer just about compliance. It’s about capital, value, and leadership. Companies that stay on the ESG path today will be the ones leading tomorrow. They’ll be better positioned to attract funding, outperform peers, and deliver long-term value to investors, customers, and employees alike.
Lucanet makes that path easier. With our platform, ESG reporting becomes a catalyst for transformation, not a barrier to it.
Make your next move a powerful one. Make it ESG.
