Sustainability reporting, once seen as just a regulatory requirement, is now being recognized by UK businesses as a way to drive growth, innovation, and competitiveness. A recent study by sustainability software provider osapiens found that over two-thirds of companies in the UK now see sustainability disclosures not only as a compliance task but also as a chance to stand out and create long-term value. The survey, which included 150 senior sustainability leaders from various sectors, highlighted both progress and challenges in the changing reporting landscape.

One key finding was strong support for mandatory sustainability reporting. Nearly 69 percent of respondents favored making it compulsory, showing a shift from resistance to active engagement. Interestingly, 41.5 percent preferred a tiered system that considers smaller businesses' capabilities, ensuring that reporting requirements are fair and proportionate. This reflects growing understanding that while transparency is important, smaller companies may need more flexibility to meet the same standards as larger firms.

Despite this readiness to accept regulation, uncertainty remains a major concern. Half of the respondents said regulatory unpredictability is their biggest compliance challenge. With sustainability rules changing quickly across regions, companies struggle to keep up with what to report, how to report it, and how new rules fit with existing ones. This is followed by difficulties in data collection and verification, mentioned by 27 percent, and rising costs of compliance, noted by 26 percent. These issues show the real challenges organizations face as they move from voluntary to mandatory, standardized reporting.

The UK is preparing to introduce its own Sustainability Reporting Standards (SRS), expected to be finalized by September 2025. These standards will align with global frameworks like the Corporate Sustainability Reporting Directive (CSRD), Sustainability Accounting Standards Board (SASB), and Carbon Disclosure Project (CDP). This alignment aims to make reporting easier for companies operating internationally and improve the quality and comparability of sustainability data. However, with the rollout still pending, many companies are cautious, trying to prepare while adapting to changing demands.

Technology is starting to play a key role in addressing these challenges. The osapiens study found that 48 percent of businesses are exploring automation and digital tools to simplify reporting. Automation helps by making data collection, integration, and analysis easier, reducing manual work and errors common in traditional reporting. Still, most companies rely on manual methods. Half of respondents said they still handle their sustainability disclosures entirely in-house using spreadsheets, which can be time-consuming and prone to mistakes. This shows a gap between the desire to adopt technology and actually using it fully.

Confidence among sustainability leaders in tracking performance is mixed. Only 10 percent felt very confident about their ability to fully assess supply chain impacts, a crucial area for understanding environmental and social footprints. About 45 percent felt somewhat confident, showing progress but also the need for better data systems and more visibility in complex supply chains.

Tim Lambert, Regional Lead for the UK, Ireland, and Nordics at osapiens, highlighted the changing role of corporate sustainability. He said businesses are facing challenges from fast-changing rules but are also more committed to sustainability as a strategic priority. “It’s encouraging to see more UK firms engage with sustainability requirements. In the past year, we’ve seen mixed developments, like ‘stop the clock’ decisions from the EU Omnibus initiative, while other rules, such as the UK Sustainability Reporting Standards, have become stricter,” Lambert said. “Though the pace of change can be tough, it’s also driving stronger commitment. Many businesses now see the value in improving visibility into their sustainability data because you can’t change what you can’t track.”

These findings suggest a business world in transition. As regulations mature and investor demands increase, sustainability reporting is becoming a key part of strategic planning, not just a side task. Companies that embrace this change can benefit from better compliance, greater trust from stakeholders, improved efficiency, and stronger positions in global markets. Those that delay risk falling behind as transparency and accountability become essential for business credibility.

Overall, the osapiens study paints a picture of cautious optimism. UK companies are getting ready for tougher rules and recognizing the benefits of better sustainability data. At the same time, they face practical challenges that require new systems, clearer rules, and more investment in technology. As the UK moves toward finalizing its sustainability reporting standards in 2025, the shift from compliance to competitiveness is well underway, shaping not just how companies report their impact but how they operate in a rapidly changing world.