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Caught in the ESG Crossfire: Transparency, Comparability, and Impact
October 31, 2025 | Marina Hornasek-Metzl, AT&S AGEstimated reading time: 1 minute
In the evolving landscape of corporate responsibility, Environmental, Social, and Governance (ESG) reporting has become a cornerstone of stakeholder communication. Yet, as organizations strive to meet growing regulatory and investor demands, they find themselves caught between the need for robust ESG disclosure, the persistent lack of comparability across reports, and the elusive goal of translating ESG efforts into tangible business value.
The Reporting Imperative
Driven by frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD), the U.S. SEC’s climate disclosure rules (though currently not being enforced in the U.S.), and global standards by the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI), ESG reporting is no longer optional. Companies must disclose not only their environmental footprint but also their social impact and governance practices. This shift serves to foster transparency, accountability, and long-term thinking.
However, the proliferation of standards and metrics creates a fragmented reporting environment. While convergence efforts are underway, many organizations still must navigate overlapping frameworks, varying stakeholder expectations, and inconsistent definitions. Looking at the classification of Substances of Very High Concern (SVHC) from a Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) point-of-view and a European Sustainability Reporting Standards (ESRS) point of view demonstrates these difficulties.
- REACH is a comprehensive EU regulation that went into effect on June 1, 2007, and applies to all chemical substances, whether used in industrial processes or in everyday products such as paints, cleaning agents, clothing, furniture, and electronics.
- ·ESRS is mandatory reporting guideline developed under the CSRD, which aims to standardize how companies disclose their ESG impacts and risks across the EU.
Unlike REACH, which focuses on regulatory compliance, ESRS emphasizes sustainability impact and stakeholder relevance. This means companies may need to report on SVHCs even if they remain below the REACH thresholds, provided they are material. SVHCs represent a subgroup of Substances of Concern (SoC) with the most serious negative effects on the environment, health, and wildlife, as identified in Article 59(1) of Regulation (EC) 1907/2006 (REACH). Consequently, the definitions of SVHC and SoC are based on REACH, which also holds true for ESRS.
To continue reading this article, which originally appeared in the October 2025 edition of PCB007 Magazine, click here.
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