Five-minute Brief: The Future of Sustainability Disclosure

The future of sustainability disclosure is being written now and will focus on data integrity, comparability and financial connectivity. Companies that proactively prepare will continue to yield strategic value from their efforts, while others are shaped by regulatory compliance.

For years, market participants have lamented that sustainability disclosures vary widely in scope and detail, making it difficult to extract reliable, decision-useful information. Companies, meanwhile, have faced fatigue — navigating an ever-shifting array of frameworks and expectations that consume time and resources, while diverting attention from advancing the very sustainability issues they report on.

The emergence of global disclosure standards offers a path forward, providing clearer expectations and enabling companies to invest confidently in the systems and processes needed to enhance reporting quality, while giving stakeholders information that is increasingly connected to broader business objectives. Yet even with this momentum, many companies still have important work ahead to prepare for standards-aligned reporting. Companies that approach this exercise with intent will be better positioned to build trust, sharpen their value narrative and win investor confidence.

The Transition to Mandatory Disclosure

There is growing global recognition that sustainability matters are financially material. Accordingly, the momentum behind mandatory sustainability reporting continues to build. Jurisdictions across all continents are actively preparing to adopt or align with sustainability disclosure standards, primarily those issued by the International Sustainability Standards Board (ISSB^[1]), reflecting a global shift toward comparable, decision-useful sustainability reporting that supports the efficiency of global capital markets. While regulatory adoption may be erratic and the pacing slower than expected, the shift toward mandatory sustainability reporting is clearly advancing.

That said, the challenges of navigating a patchwork of legal and regulatory requirements across jurisdictions with overlapping rules or time horizons are not insignificant. Recent headwinds, such as Members of European Parliament voting to narrow the CSRD requirements^[2] and California’s SB 261 facing a temporary injunction^[3], risk discouraging companies that have diligently prepared for compliance. Further, recent crackdowns on greenwashing and uneven market sentiments toward environmental and social matters are complicating how companies communicate their sustainability-related priorities.

Where Are We Now?

Companies are beginning to align with global sustainability reporting standards, but progress and pace remain uneven. Our team has collectively reviewed hundreds of sustainability and climate-related reports and observed that current disclosures often lack depth, particularly in quantifying financial impacts and in outlining the costs associated with company plans to address those impacts. Recent benchmarking from Climate Engagement Canada^[4] reveals a gap between ambition and execution when it comes to climate reporting by Canada’s 40 largest emitters. In 2025, 30% of companies assessed had committed to IFRS S2/CSDS 2 alignment, while just 13% included alignment tables within their disclosures — an indication that the internal systems to support adoption are still under development.

In our experience, disclosures evolve over time as organizations advance managerial practices and grow their internal reporting capacity. Take scenario analysis disclosure as an example; companies are moving in the right direction, but the depth and consistency of disclosures vary. In 2025, 48% of companies reviewed by Climate Engagement Canada disclosed scenario analysis results; however, only approximately half of those included a 1.5°C scenario with key assumptions applied across the full enterprise. This signals a need for more robust, forward-looking analysis that reflects the strategic and financial implications of climate risk.

Aligning with standards like CSDS requires not just commitment, but investment in the systems, governance and expertise to connect sustainability-related risks and opportunities with financial impacts that produce decision-useful information.

Where Are We Headed?

As reporting matures, disclosure emphasis will shift from qualitative narratives to quantitative outcomes — spelling out how sustainability risks and opportunities impact financial performance, organizational resilience and long-term value creation.

With companies reading from the same playbook set out by global disclosure frameworks, expect reporting to shift from manual preparation to digital-first reporting, producing timely information that is interoperable across jurisdictions and assured with rigour.

At the same time, investors are not the only audience interested in sustainability. For companies that rely, for example, on consumers, supply chains and large workforces for business success, expect reporting to extend beyond financial materiality and likely bifurcate into two streams:

• Regulatory disclosures focused on investors and capital markets, emphasizing financially material information and forward-looking performance metrics.
• Strategic sustainability storytelling aimed at other stakeholders, including employees, customers, suppliers and communities, using accessible visuals and narratives that convey impact, purpose and values beyond financial performance.

How to Practically Prepare

Practical preparation is about bringing discipline to sustainability reporting. Here are our five recommendations for proactively preparing for the next wave of sustainability disclosure:

1. Understand which sustainability topics are most relevant to your stakeholders and how they affect enterprise value. Build reporting processes around those priorities, aligning regulatory requirements with how sustainability creates and protects strategic value for your organization uniquely.
2. Leading organizations have already recognized that sustainability touches every corner of their business. Bringing internal expertise to the table, including risk and compliance, finance, legal, operations, data systems, investor relations and human resources, helps ensure a unified approach to disclosure that is aligned with both financial and strategic objectives.
3. Bringing in subject-matter experts, legal counsel, design specialists and assurance providers early in the process ensures disclosures are accurate, credible and decision-useful. These external perspectives also help organizations interpret evolving standards before they’re in effect and prepare to apply them practically.
4. Integrate sustainability metrics into existing financial processes and enterprise systems to support timely analysis and reporting. Digital tools and automation can help streamline data collection, enhance traceability and improve confidence in reported results. Building a reliable, scalable data foundation starts with clear data ownership, consistent methodologies and processes designed for accuracy.
5. Third-party assurance enhances the credibility of reporting and builds trust with your audience. Organizations that establish internal controls and documentation trails now will expedite the path to an unmodified assurance report and credible, investor-grade disclosures.

Ready to Improve Your Reporting in 2026?

At Quinn+Partners, we advise clients on preparing effective, credible sustainability and climate disclosure that aligns with the latest disclosure practices. To learn more about the practical steps you can take to bring discipline and rigour to your disclosure and navigate evolving requirements, please get in touch.

[1] Canada has substantially aligned its Canadian Sustainability Disclosure Standards with IFRS S1 and IFRS S2 issued by the ISSB, subject to limited transition and jurisdictional modifications, as outlined by the Canadian Sustainability Standards Board.

[2] Sustainability reporting and due diligence: MEPs back simplification changes

[3] Federal appeals court halts implementation of California’s climate law SB 261

[4] Climate Engagement Canada Benchmark 2025 Assessment Results