Investing Through The Fog: A Sustainability Compass For Investors

The events of 2025 made clear to investors why managing sustainability data and responsible investment strategies matters. Investors experienced regulatory rollbacks, geopolitical instability and the escalating impacts of climate change. For a portfolio, these factors can materialize as supply chain exposure, energy price volatility and tariff disruption – all of which can evolve more quickly than annual reporting cycles can capture.

As a result, investors are increasingly seeking greater volumes of sustainability data from their portfolio companies. Indeed, the majority of respondents to the 2026 Verdantix global corporate sustainability survey report that investors are asking them to disclose more environmental and social metrics.

Regulatory rollback creates challenges for investors

It's tempting to read the EU's Omnibus simplification push, and the political headwinds in the US, as signs that ESG and sustainability scrutiny is easing. However, scrutiny remains, and regulatory rollback removes certainty and stability from sustainability engagements. For instance, corporate members of the Verdantix Sustainability Council note that ambiguity over which requirements will stick is making annual corporate sustainability reporting less, not more, consistent: organizations do not want to overbuild a process around rules that might not survive the year. Compounding this challenge, the Corporate Sustainability Reporting Directive (CSRD), International Sustainability Standards Board (ISSB)-aligned standards and other voluntary reporting frameworks are all moving at different speeds, leaving investors to reconcile multiple moving targets simultaneously.

Opportunities are appearing out of these challenges

It’s not all doom and gloom in an era of uncertainty for investors. CFOs across the market are demanding that sustainability spending demonstrate a financial return, rather than being justified by regulatory obligations. This could provide opportunities for investors, as portfolio company sustainability data are finally being framed in the language of return on investment (ROI), risk-adjusted return and downside protection, not simply meeting compliance requirements. Corporations are still investing in sustainability data to ensure that the data are audit-ready, comparable and granular.

Steps investors can take to better manage sustainability decisions

As uniformity in reporting standards between portfolio companies continues to vary, investors are seeking specialized software for reporting and data management. They are also turning to specialized support from consultants, as they look to update their investment and disclosure strategy, conduct ESG due diligence, assess portfolio performance and allocate capital.

To assess which vendors can support the needs of their portfolio companies, as well as those of their own internal sustainability and responsible investment functions, investors should read the following reports:

Verdantix Smart Innovators: ESG & Sustainability Reporting Software For Investors (2026)