In the current debate around the EU Omnibus Act on sustainability reporting, there is already broad support in the European Parliament despite the final decision still pending. However, regardless of the regulatory framework, there are three compelling reasons why companies should continue to actively engage with ESG (Environmental, Social, Governance) topics.
ESG Ratings: Banks Assess ESG Risks Independently of Regulation
Financial institutions have long recognized that climate and environmental risks have a direct impact on a company’s creditworthiness. In addition to traditional credit scoring, banks now perform ESG risk assessments, raising critical questions: What risks could negatively affect the business model? What financial consequences might arise?
These assessments significantly influence the evaluation of a company’s ability to repay credit. As a result, companies must conduct a double materiality analysis and be able to clearly answer the question: “What could hurt us financially—now or in the future?” Those who can prove they are actively evolving their business model and implementing concrete countermeasures will benefit from more favorable risk evaluations.
Banks already differentiate between sustainable financing—those with positive ESG impacts aligned with the EU taxonomy—and controversial financing in problematic sectors. The message is clear: “Show the bank how you’re managing ESG risks!”
Business Partners Demand ESG Transparency
In the future, reporting-obligated companies will continue to demand ESG-relevant data from their business partners—especially for supply chain risk assessments and classification into Scope 1–3 emissions. Those unable to provide reliable data risk being excluded from key partnerships.
Requirements are increasing as companies are expected to reduce their environmental impacts across the entire value chain. Only those who are prepared and able to communicate relevant ESG data transparently will secure long-term business relationships.
Operational Footprint as a Competitive Advantage
The third key reason for sustained ESG engagement lies in its economic benefits. Reducing one’s environmental footprint through improved energy and resource efficiency has a short- and medium-term positive effect on a company’s balance sheet, liquidity, and credit rating—especially in areas like electricity consumption, heating, and vehicle fleets.
These measures not only lower operating costs but also increase resilience to rising energy prices and regulatory shifts.
Conclusion
Regardless of the current status of the Omnibus legislation, ESG remains a central issue for forward-thinking companies. The demands of banks and business partners—as well as the clear economic advantages—make proactive ESG management a strategic imperative. Those who act now not only gain access to better financing and stronger partnerships but also secure long-term competitiveness in a sustainability-driven economy.
