By Nicholas Cox October 30, 2026
Executive summary
Environmental, social, and governance (ESG) reporting as part of Sustainability has changed significantly in the past 3 years. The US Securities and Exchange Commission (SEC) has proposed rescinding its climate rule, and the European Union (EU) has narrowed who must report. California’s first emissions reports are due November 10, 2026. Meanwhile, recent surveys show sustainability spending, investor demand, and chief financial officer (CFO) involvement are all rising. This post pairs that research with a status check on each regime, so Finance teams can plan around the rules that apply to them.
Investors want clear, comparable information on environmental, social, and governance (ESG) risks and sustainability opportunities. Companies that collect, measure, and publish this non-financial data can attract and retain investors.
Sustainability goes beyond collecting a new set of key performance indicators (KPIs). Much like external financial disclosures, ESG reporting is becoming a key investment criterion. That shift moves the conversation beyond “just” reporting KPIs to developing a Sustainability investment strategy that responds to market expectations.
This post looks at what recent research shows about Sustainability spending, ownership, and tools. It then checks where the main reporting rules stand.
ESG spending and investor demand
Corporate sustainability spending keeps rising, but with more discipline. In Deloitte’s 2026 survey of 2,156 C-suite leaders, 78% said they had increased sustainability investments in the year before. Leaders are also pursuing fewer initiatives: an average of 3.4 out of 12 options, down from 5.0 in 2025.
Return on investment (ROI) drives those choices. About 77% say sustainability investments deliver greater ROI than other business investments, and 51% name financial benefit as the top decision factor. Chief executive officers (CEOs) and chief financial officers (CFOs) lean toward near-term returns. Specifically, 29% of CEOs and 33% of CFOs rank 12-month financial benefits first, versus 26% of all respondents.
Investors keep asking for the data. FTSE Russell’s 2026 survey found 84% of asset owners now factor sustainability into investment decisions, up from 73% in 2025. Corporate reporting and disclosure quality is the leading barrier to more adoption, cited by 33%.
Finance’s growing role in Sustainability
Funding is one sign that Finance’s influence is growing. Verdantix, a research firm, surveyed 400 sustainability leaders in 2026. Nearly 84% said the CFO is a leading or significant contributor to funding sustainability strategy. That share was roughly 60% in 2023.
Reporting also reaches well beyond Finance. PwC’s 2025 Global Sustainability Reporting Survey found that companies involve an average of 10 business functions in the process. That breadth makes clear ownership and strong controls essential.
Tools and data quality
Spreadsheets still lead. In PwC’s 2025 survey of nearly 500 executives and senior professionals, 87% used spreadsheets for sustainability reporting. Respondents’ companies report, or plan to report, under the Corporate Sustainability Reporting Directive (CSRD) or International Sustainability Standards Board (ISSB) Standards.
Other tools are gaining ground. Use of centralized sustainability data storage rose to 65% from 45% a year earlier. Sustainability management software rose to 37% from 23%. AI use in reporting rose to 28% from 11%.
A Deloitte survey found that AI use for sustainability is still early. More than 70% of respondents say it remains at the pilot, experimentation, or ad hoc stage. Data availability and quality rank as the most significant barrier to scaling it.
How the rules have changed
In 2023, mandatory ESG disclosure looked likely from the US Securities and Exchange Commission (SEC) and the European Union (EU). Since then, the rules have moved in different directions. The table shows where each regime stood as of October 30, 2026.
| Regime | Status | Who it covers |
| SEC climate disclosure rule | The SEC adopted the rule in March 2024 and stayed it in April 2024, so it never took effect. The SEC proposed full rescission on May 29, 2026, and comments closed August 3, 2026. The rule stays on hold until the SEC takes final action. Earlier SEC guidance from 2010 still applies. | US public companies (rule not in effect) |
| EU CSRD | The Council of the EU gave final approval to the Omnibus I changes on February 24, 2026. Reporting now applies only to companies with more than 1,000 employees and more than €450 million in net turnover. The new scope applies to financial years beginning on or after January 1, 2027. | EU companies and groups that meet both thresholds. Non-EU groups with more than €450 million in EU net turnover and an EU subsidiary or branch above €200 million. |
| California SB 253 and SB 261 | SB 253: The California Air Resources Board (CARB) regulation took effect October 12, 2026. First Scope 1 and 2 reports are due November 10, 2026, with Scope 3 following in 2027. SB 261: A Ninth Circuit injunction pauses enforcement, and CARB will set a new date after the appeal. | SB 253: US-formed entities with more than $1 billion in annual revenue that do business in California. SB 261: companies with more than $500 million in annual revenue. |
| ISSB Standards | As of July 22, 2026, 35 jurisdictions had adopted the standards on a voluntary or mandatory basis, and 11 more planned to. The United Kingdom issued two standards based on them on February 25, 2026. | Companies in adopting jurisdictions. Each jurisdiction sets its own scope and timing. |
Scope matters more than ever. A company can fall outside one regime and still meet the thresholds of another. Each Finance team needs to check revenue, headcount, and locations against every rule.
The emissions terms in the table follow a standard split. Scope 1 covers a company’s direct emissions, Scope 2 covers emissions from the energy it buys, and Scope 3 covers emissions across its value chain.
The EU changes also affect suppliers. Companies with 1,000 or fewer employees can limit value chain information requests to what the voluntary EU reporting standard covers.
What Finance teams can do next
Finance teams can start with four actions:
- Check each regime’s thresholds against revenue, headcount, and locations.
- Apply financial controls and clear ownership to ESG data.
- Link Sustainability targets to planning and forecasting.
- Track pending decisions, including the SEC’s final action and the Ninth Circuit ruling on SB 261.
The bottom line
Rules are moving at different speeds. The SEC is retreating, the EU has narrowed its scope, and California and ISSB-adopting jurisdictions are moving ahead. Finance teams that build ESG data processes now can respond to whichever requirements apply to them. OneStream ESG reporting software helps Finance teams collect, govern, and plan ESG data alongside financial data, so they can adapt faster when requirements change.
Learn more
For more on Finance’s role, read CFOs Leading the ESG Reporting Revolution. To see how the OneStream platform supports Sustainability explore OneStream Sustainability Solution.
Nicholas (Nick) Cox is the Sr. Director, Product Marketing for OneStream, based in the EMEA region. He has a unique 25+ year background in audit & accounting, finance, and business software applications. Nick joined OneStream in 2021 after a long career at Oracle, where he had served in various leadership roles, including strategy, business development, and presales consulting. Nick has extensive experience working with customers and partners and regularly writes and speaks on finance topics.
