Global ESG and sustainability consulting sees rapid growth, highlighting increased corporate reliance despite recent EU regulatory rollbacks and regional disparities in reporting standards. Industry experts stress the importance of agility amidst evolving requirements to maintain transparency and access to capital.
Sustainability and ESG strategy consulting has emerged as a resilient and rapidly expanding sector amid evolving regulatory landscapes and fluctuating political commitments worldwide. According to the latest Environment Analyst’s Global Environmental & Sustainability (E&S) Consulting Market Assessment, these services experienced a remarkable 56% year-on-year increase in 2023, the fastest growth within the broader environmental consulting domain. This momentum is projected to continue, with an anticipated compound annual growth rate of 14.4% through 2028, driving the market towards an estimated value of $4.1 billion as organisations increasingly embed sustainability at the core of their operations.
This surge in demand reflects a broader trend where sustainability has transitioned from a regulatory compliance task to a strategic imperative shaped by intensified investor scrutiny, regulatory mandates, and technological advancements. Companies are recognising sustainability reporting and ESG strategies as critical for unlocking finance, managing risks and opportunities linked to climate adaptation, nature-related goals, and social justice-oriented transitions.
Nevertheless, this growth trajectory faces significant challenges, particularly from recent regulatory rollbacks in the European Union. While the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) had initially set ambitious global benchmarks for mandatory ESG disclosures, the European Parliament’s endorsement of the Omnibus package in November 2025 has substantially diluted these requirements. The new rules raise reporting thresholds, limiting CSRD applicability to large businesses with over 1,750 employees and €450 million turnover and shifting CSDDD due diligence obligations to entities with at least 5,000 employees and €1.5 billion turnover. Key provisions such as mandatory climate transition plans have also been scrapped.
These substantial easing measures have drawn sharp criticism from legal experts, environmentalists, and NGOs, who warn that they weaken transparency, dilute critical environmental and human rights safeguards, and impede just transition goals. Investors have likewise expressed concern over emerging disclosure gaps, which could compel them to seek ESG data through private channels, complicating transparency efforts.
The legislative rollbacks are part of a broader attempt by the European Commission to reduce the administrative burden on businesses, particularly SMEs, as part of its Omnibus I package. The Commission argues that these changes aim to enhance competitiveness and prevent overburdening smaller firms, potentially saving €6.3 billion annually in administrative costs. However, critics argue this regulatory easing undermines the EU’s climate ambitions and corporate social responsibility frameworks. The controversy extends beyond legislation to governance processes, with the EU Ombudswoman recently reprimanding the Commission for bypassing standard transparency and evidence-based procedures in fast-tracking these proposals, raising questions about the quality and legitimacy of the decision-making process.
Despite these setbacks, industry experts and consultants remain optimistic. They suggest that companies already committed to robust sustainability frameworks are unlikely to retreat significantly. Many affected businesses are expected to adopt voluntary international standards such as those established by the Global Reporting Initiative (GRI) and the International Sustainability Standards Board (ISSB) to guide their reporting and maintain ESG momentum. The ISSB’s IFRS S1 and S2 standards, which have garnered adoption across 36 jurisdictions, represent a growing global trend towards harmonised, rigorous disclosure expectations extended across advanced economies including the UK, Japan, Singapore, and Brazil.
In the US, regulatory efforts continue amid political and legal challenges. The Securities and Exchange Commission (SEC) has implemented climate-risk disclosure rules covering Scope 1 and 2 emissions, though Scope 3 disclosures have been excluded, adding complexity for multinational companies. California’s state-level climate laws offer more stringent mandates, requiring Scope 3 reporting and scenario analyses, underscoring a fragmented but gradually maturing regulatory environment.
Asia-Pacific markets are advancing swiftly. China mandates ESG disclosures for listed companies, while Singapore integrates ISSB standards into its reporting frameworks, creating converging pressures for corporate transparency and sustainability performance in the region.
Meanwhile, the UK’s Financial Conduct Authority is preparing to make transition plan disclosures mandatory for listed companies from 2026, consistent with ISSB principles, reinforcing the country’s position as a strong market for ESG advisory services.
Despite regulatory easing in some quarters, investor research indicates that sustainability remains a compelling long-term value driver, with 88% of companies acknowledging its business importance. This largely sustains demand for external advisory expertise to navigate complex and fragmented global ESG requirements, align voluntary and mandatory disclosures, and support operational transformation efforts.
Nevertheless, the EU’s rollbacks introduce uncertainty and risk corporate sustainability momentum, particularly for smaller companies now exempt from mandatory reporting and due diligence. This could restrict larger companies’ ability to manage supply chain risks and address Scope 3 emissions comprehensively. A recent survey of mid-market organisations found that 90% intend to continue sustainability reporting despite these regulatory shifts, often aligning with alternative frameworks to preserve reporting rigor.
Consultants highlight that simplified reporting regimes may also free resources to focus more on substantive business actions and supply chain improvements instead of onerous compliance, potentially accelerating real-world sustainability outcomes. However, the overall landscape remains uncertain as the European Parliament’s Legal Affairs Committee continues to consider further amendments under an urgent legislative fast track.
In conclusion, sustainability and ESG consulting is poised for robust growth, underpinned by broad global momentum and investor demand for transparency and credible, audit-ready ESG data. Yet, regional regulatory reversals, particularly within the EU, introduce significant complexities and risks, potentially fragmenting reporting standards and diminishing the scope of mandatory disclosures. Corporate decision-makers and advisory firms alike must remain agile and informed to navigate this shifting terrain, balancing compliance, voluntary action, and strategic ESG integration to secure long-term resilience and access to capital in transitioning economies.
- https://environment-analyst.com/global/111299/sustainability-and-esg-consulting-resilient-to-reporting-rollbacks – Please view link – unable to able to access data
- https://www.reuters.com/sustainability/boards-policy-regulation/eu-watchdog-accuses-commission-lack-transparency-urgent-proposals-2025-11-27/ – The EU Ombudswoman, Teresa Anjinho, has criticised the European Commission for bypassing its own transparency and evidence-based procedures while rushing legislative proposals on sustainability reporting, agriculture, and migrant smuggling. Following a complaint from climate and human rights organisations, the Ombudswoman conducted an inquiry and found the Commission failed to adequately justify the urgency of these measures. She deemed the lack of proper process as ‘maladministration’ and emphasised that core principles of good lawmaking must not be sacrificed for speed. The complaint specifically alleged that the Commission weakened sustainability rules after closed-door meetings with industry lobbyists, without public consultation or impact assessments. In response, the Commission stated it would review the recommendations carefully and insisted that its decision-making was evidence-based and included consultations. The complainant organisations underscored that any legislative proposal must align with EU climate goals and called for a withdrawal of the proposals if these standards are not met.
- https://elpais.com/economia/branded/especial-esg/2025-11-27/la-ue-ante-la-urgencia-de-reducir-la-burocracia-verde.html – The European Union faces the challenge of reducing the administrative burden of its environmental policies without renouncing its sustainability objectives. According to a 2024 report by Mario Draghi, the European Commission has proposed the Omnibus Package I, which seeks to simplify regulations such as the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy. The proposals include delays in their application, reduction in the number of companies affected—up to 92% would be excluded—and flexibilisation of criteria, aiming to save about €6.3 billion annually in administrative costs. While some experts consider these measures necessary for competitiveness and to prevent the collapse of small businesses, others criticise them as deregulation that could weaken climate ambition and corporate social responsibility. Large European companies support the original regulation for its strategic role in sustainability and reputation. A survey by E3G reveals that most executives see sustainability as a competitive advantage, although the debate on the balance between regulation, cost, and climate ambition remains open within the EU.
- https://www.nixonpeabody.com/insights/alerts/2025/04/29/eu-and-us-sustainability-reporting-and-due-diligence-updates – Following the vote, the implementation dates for the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) are officially delayed. The CSRD compliance timeline has shifted for many businesses, with two-year compliance delays being given to companies that fall into the second and third compliance waves under the legislation. Large companies with more than 250 employees—second-wave entities—will now be required to report on social and environmental measures starting in 2028, covering the 2027 financial year. Listed small-and medium-sized enterprises (SMEs)—third-wave entities—will follow one year later, in 2029. The CSDDD will also see postponed implementation, beginning with a one-year delay, until July 26, 2027, for EU Member states to transpose CSDDD rules into national law. Companies in the EU with over 5,000 employees and €1.5 billion turnover and non-EU companies with similar EU turnover must comply with CSDDD requirements by 2028. EU entities with over 3,000 employees and €900 million turnover and non-EU companies matching that threshold, also need to comply by 2028. More changes to CSRD and CSDDD are expected in the coming months as the European Parliament’s Legal Affairs Committee considers the remaining recommendations in the EC’s Omnibus I package, including proposals to redefine and dramatically simplify CSRD and CSDDD obligations. To expedite the process, the European Parliament is using an urgent procedure, which the EC endorsed on March 26, 2025.
- https://www.reuters.com/sustainability/eu-pare-back-sustainability-rules-companies-draft-shows-2025-02-22/ – The European Commission plans to reduce the number of companies required to comply with EU sustainability reporting rules, according to a draft document. This move is part of an initiative to reduce regulatory burdens on businesses and boost local industry competitiveness. The new proposal would limit the directive to companies with over 1,000 employees and a net turnover exceeding €450 million, compared to the current threshold of 250 employees and a €40 million turnover. The EU also intends to cancel plans for sector-specific reporting standards and delay the due diligence law. This law, the CSDDD, aims to ensure companies address human rights and environmental issues within their supply chains but will now only require assessments of direct business partners and subsidiaries. The draft reflects ongoing debates among member states, some advocating for weaker rules and others, like Spain, emphasising the importance of upholding environmental and human rights standards.
- https://esg-investing.com/2025/03/27/eu-council-approves-delay-to-csrd-and-csddd-sustainability-reporting-regulations/ – EU member states in the European Council announced that they have approved the European Commission’s ‘stop-the-clock’ directive, delaying the implementation of key sustainability reporting and due diligence regulations, including the CSRD and CSDDD. The directive forms the first major step in the Commission’s Omnibus I package, aimed at significantly reducing the sustainability reporting and regulatory burden on companies, and particularly on SMEs. The Omnibus package was released by the Commission in February, proposing a wide-ranging series of changes to regulations including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM). Among the proposals included in the package were delays for the application of the CSRD for companies that have not yet started reporting by two years, and of the transposition and application of the CSDDD by a year.
- https://esginvestor.net/reopening-eu-sustainability-rules-poses-multiple-risks/ – The Taxonomy, CSRD, and CSDDD have already been adopted by the EU, with the directives experiencing prolonged approval processes. The Taxonomy was given the green light in 2020, offering investors and companies a classification system for which activities are considered ‘green’ or ‘climate friendly’. In 2023, the CSRD was approved, introducing requirements for businesses to report greenhouse gas emissions and other disclosure requirements. After much wrangling, the CSDDD was adopted in April, enhancing requirements and obligations for companies in relation to the environmental and social harms of their operations and supply chains. Both the CSRD and CSDDD have already been watered down, dampening their usefulness for investors. In February, sector-specific disclosure rules were pushed back by two years to 30 June 2026 by the European Parliament and Council to give companies more time to prepare for the first set of European Sustainability Reporting Standards. In its 2024 work programme, the commission cut CSRD reporting requirements by 25% to ease the regulatory burden for corporates. Under the final CSDDD text approved by the parliament, far fewer companies are subject to the rules than originally intended, and the directive’s roll-out will not be fully implemented for five years. The potential omnibus arrives just ahead of nearly 50,000 large companies across EU member states being required to disclose data from January on the social and environmental impact of their business operations under CSRD. “Companies that already started to implement the rules are at risk,” said Pierre Garrault, Senior Policy Adviser at pan-European sustainable investment organisation Eurosif. “Reopening these rules would create regulatory uncertainty for companies across the EU, which would be hugely detrimental for them.” He added that a potential fundamental change in the core rules of CSRD reporting and CSDDD during implementation could “jeopardise the capacity of investors to get sustainability data needed for them to invest in sustainable activities”. “It would also hinder the development of the EU’s strategic objectives including decarbonising the economy and scaling up sustainable finance,” said Garrault. “As a representative of investors, we were expecting the CSRD in particular to deliver sustainability data necessary to take informed investment decision. Depending on whether and how it would be modified, investors may not have the necessary information to do so.”
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The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative presents recent developments, including the European Parliament’s endorsement of the Omnibus package in November 2025, which diluted the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). This legislative change has been reported by reputable sources such as Reuters on November 13, 2025. ([reuters.com](https://www.reuters.com/sustainability/climate-energy/eu-lawmakers-back-further-weakening-sustainability-law-2025-11-13/?utm_source=openai)) The report also references the Omnibus package introduced in February 2025, indicating that the content is current and not recycled. However, the absence of specific publication dates for the Environment Analyst’s Global Environmental & Sustainability (E&S) Consulting Market Assessment and the Omnibus package raises questions about the freshness of the data. The report’s reliance on a press release from Environment Analyst suggests a high freshness score, as press releases typically provide the most recent information. Nonetheless, the lack of specific dates for some sources warrants caution. Additionally, the report mentions that the European Commission’s Omnibus package aims to reduce the administrative burden on businesses, potentially saving €6.3 billion annually in administrative costs. This figure aligns with information from Reuters published on February 27, 2025. ([reuters.com](https://www.reuters.com/world/europe/eu-green-finance-row-back-sets-climate-investment-challenge-2025-02-27/?utm_source=openai)) The consistency of these figures across multiple reputable sources supports the report’s freshness. However, the absence of specific publication dates for some data points necessitates further verification.
Quotes check
Score:
9
Notes:
The report includes direct quotes from legal experts, environmentalists, NGOs, and investors expressing concerns over the dilution of the EU’s sustainability directives. These quotes are consistent with statements from Reuters published on November 13, 2025, where EU lawmakers voted to weaken the Corporate Sustainability Due Diligence Directive (CSDDD). ([reuters.com](https://www.reuters.com/sustainability/climate-energy/eu-lawmakers-back-further-weakening-sustainability-law-2025-11-13/?utm_source=openai)) The alignment of these quotes with reputable sources suggests they are accurately attributed and not reused from earlier material. However, without access to the original sources of these quotes, it’s challenging to fully verify their authenticity.
Source reliability
Score:
7
Notes:
The narrative originates from Environment Analyst, a specialised publication focusing on environmental and sustainability consulting. While Environment Analyst is a niche source, it is known for its in-depth analysis of the environmental consulting sector. The report references reputable sources such as Reuters, which adds credibility to the information presented. However, the reliance on a single outlet for the primary narrative introduces some uncertainty regarding the overall reliability.
Plausability check
Score:
8
Notes:
The report discusses the resilience of sustainability and ESG consulting amid regulatory changes, referencing the European Parliament’s endorsement of the Omnibus package in November 2025, which diluted the EU’s sustainability directives. This legislative change has been reported by reputable sources such as Reuters on November 13, 2025. ([reuters.com](https://www.reuters.com/sustainability/climate-energy/eu-lawmakers-back-further-weakening-sustainability-law-2025-11-13/?utm_source=openai)) The report also mentions that the European Commission’s Omnibus package aims to reduce the administrative burden on businesses, potentially saving €6.3 billion annually in administrative costs. ([reuters.com](https://www.reuters.com/world/europe/eu-green-finance-row-back-sets-climate-investment-challenge-2025-02-27/?utm_source=openai)) These claims are consistent with information from reputable sources, suggesting the narrative is plausible. However, the absence of specific publication dates for some data points and the reliance on a single source for the primary narrative warrant further verification.
Overall assessment
Verdict (FAIL, OPEN, PASS): OPEN
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative presents recent developments in sustainability and ESG consulting, referencing legislative changes in the EU’s sustainability directives. While the report aligns with information from reputable sources, the absence of specific publication dates for some data points and the reliance on a single source for the primary narrative introduce uncertainties. Further verification is needed to fully assess the accuracy and reliability of the information presented.
