Sustainability: compliance or conviction

In October last year, I had the opportunity to give my opinion in this same space on “ low-cost sustainability”, where I argued that doing the bare minimum to comply with only what is mandatory is not enough. My position remains the same. What has changed is the regulation — and, contradictorily, in the sense of relieving pressure and simplifying requirements. That is why I consider it important to once again reinforce the topic and express my opinion.

Since then, the European regulatory framework has undergone significant changes regarding sustainability reporting. In April 2025, the so-called Omnibus package was approved, introducing a series of adjustments to the existing regulations. Among the changes, the most notable is the postponement of reporting obligations for large unlisted companies and listed SMEs, postponing the former from 2026 to 2028, and the latter from 2027 to 2029.

In parallel, the simplification of the ESRS standards is also underway, with publication scheduled for June 20th and a public consultation open between August and September — I would like to take this opportunity to quickly appeal to professionals in the field to take advantage of this opportunity to contribute. Having said that, and having provided the necessary background, let us now move on to the objective of this article — not to explain what Omnibus is, but rather to reflect on its consequences.

The justification for this slowdown is not absurd: in fact, many companies were struggling to cope with the complexity of initial reporting , whether due to a lack of human, financial or technical resources. But the impact of this simplification is not limited to these companies. It also gives companies that until now have seen the issue mainly as an obligation some additional breathing room, allowing them to postpone, once again, all the associated effort. For some, regulatory relief may be interpreted as a sign that sustainability can continue to be postponed.

This regulatory relief thus creates a new space for accommodation: with fewer mandatory data points (which, in my view, is a positive change, as long as it brings greater clarity and reduces ambiguity), and with several temporary exemptions, a period is established where doing little continues to be sufficient (for now). Those who were already satisfied with doing only the minimum now have room to continue doing so, at least for the next two years.

But the essential point remains: the true value of sustainability reports and the entire process required to produce them lies not in meeting requirements, but in the ability to generate strategic knowledge to support decisions and prioritize important issues for organizations. When we talk about sustainability, there is usually an associated exercise that serves exactly this purpose: the dual materiality analysis. Essentially, it allows companies to gain deeper internal knowledge, engage relevant stakeholders , gain trust at executive level, strengthen relationships with the value chain and, above all, understand their impacts, risks and opportunities in an integrated way. This knowledge supports sound decisions, investment priorities and informed transition plans.

And this is where the central dilemma of this article arises: compliance or conviction? Do just enough to meet the requirements (compliance) or firmly embrace sustainability as a central strategic axis, in an ambitious way, and strengthen the business with more solid value chains and clarity about where to act? In my view, sustainability regulations should be seen as technical guides to structure the work, but the will to do so must (and must) come from within.

Companies that choose conviction will inevitably gain a competitive advantage: they will be better prepared to respond to investors, consumers, employees and regulators. They will better understand their own challenges and will be better able to adapt to a constantly changing regulatory and market environment.

This relaxation of sustainability reporting requirements may come as a relief, but it should not be seen as a pause. The work will need to be done – and the European political and environmental context remains ambitious: to meet the goals of the Paris Agreement and the 2030 agenda. This additional time should be seen as an opportunity to prepare and structure, not as an excuse to continue to downplay the importance of the topic.

Ultimately, regulations may change — but companies’ commitment and ambitions will always remain the real differentiator.

The Observer joins the Global ShapersLisbon , a community of the World Economic Forum, will discuss a relevant topic of national politics each week, as seen through the eyes of one of these young leaders of Portuguese society. Over the next few months, they will share with readers their vision for the national and global future, based on their personal and professional experience. The article therefore represents the author's personal opinion, framed within the values ​​of the Global Shapers Community , although in a non-binding manner.