Procurement Impact: US Corporate Sustainability Reports Drop

Issuing annual sustainability reports is par for the course at most global corporates and plays a crucial role in gauging ESG performance.

But, in the first half of 2025, there was a notable drop in sustainability filings by US public companies.

However, far from representing a retreat from core sustainability principles, the shift signals adjustments in strategy, including in procurement. 

Sustainability reporting declines

Within the first six months of 2025, only 432 companies in the Russell 3000 index submitted sustainability reports.

This marks a 52% reduction compared to the same period in 2024, during which 831 companies filed such reports, according to analysis by The Conference Board and ESGAUGE. Among major corporations like Adobe, Citigroup, General Motors and Uber, there is currently a pause in publishing new reports.

Yet, this strategic recalibration should not be seen as abandoning ESG principles, insists Andrew Jones from the Conference Board’s Governance and Sustainability Centre.

He remarks: "There’s been such a shift this year in the US. The new administration has a very different kind of mandate when it comes to climate change and environmental issues and DEI. That’s introduced new risk dynamics.”

Impact of regulatory policies

The drop in reports largely results from evolving global regulatory frameworks. The integration of regulations such as the European Union’s Corporate Sustainability Reporting Directive (CSRD) and California’s climate disclosure laws (SB 253 and SB 261) are imminent.

Companies are withholding voluntary reports as they navigate these upcoming mandates.

In the US, federal-level amendments in climate, energy and disclosure regulations heighten both legal and reputational considerations for ESG statements, affecting supplier management and sourcing practices.

Companies in politically-sensitive sectors are adjusting their language and subjugating disclosures to extensive legal scrutiny.

A survey by The Conference Board indicates that climate communication is heavily scrutinised, prompting firms to shift their reporting towards risk-based and financially pertinent disclosures instead of aspirational insights.

ESG in financial reporting

The trend towards embedding ESG metrics directly in financial disclosures, such as 10-K filings and investor presentations, is gaining traction.

The approach aims to align sustainability initiatives more closely with financial performance and risk considerations.

The shift mirrors a focus on data that satisfies investor needs and enhances decision-making in procurement strategies rather than relying on traditional sustainable reporting methods.

Although it appears that firms might be scaling back on stand-alone sustainability reports, what's occurring is a heightened focus on integrating sustainability into core business functions and procurement practices to improve strategic alignment and materiality.

Looking ahead

According to Andrew, the role of sustainability reporting has not diminished, despite the pause in voluntary disclosures.

He adds: "While a temporary pause in voluntary reporting may be warranted, sustainability disclosures remain essential: customers, employees, investors, communities and suppliers continue to depend on them, regardless of regulatory mandates."

As sustainability reporting evolves, companies that align their reporting strategies with business priorities, regulatory requisites and material risks will be poised to lead post-regulatory transitions optimally.