Sustainability Reporting: Understanding Drivers for Continued Business Resilience and Growth

RYAN SUEN | HEAD OF REPORTING & FRAMEWORKS
This feature was written by Ryan Suen, who serves as the Head of Reporting & Frameworks at RE Tech Advisors, a Blackstone preferred provider of consulting services to enhance building performance and investment transparency. Ryan leads client reporting strategies across frameworks ensuring alignment between sustainability performance and financial disclosure. For questions on Reporting & Frameworks, please reach out to Ryan.Suen@RETechAdvisors.com

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2025 has marked a turbulent, though not entirely surprising, turn in the world of sustainability, especially the reporting standards that support it. In March, the U.S. Securities and Exchange Commission (SEC) announced that it would end its defense of Climate Disclosure Rules, marking a definitive end to federal-level sustainability reporting requirements under the current administration. And even more recently, SEC Chair Paul Atkins warned the International Financial Reporting Standards (IFRS) Foundation over its support for the International Sustainability Standards Board (ISSB).

There have been similar reductions in reporting requirements in Europe, with the Council of the European Union formally approving the “Stop-the-Clock” Directive, which postpones reporting obligations for companies under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). All of this transpired following endorsement by the European Parliament on April 3, 2025.  

As administrations on both sides of the Atlantic challenge climate-related disclosure rules and scrutinize the value of sustainability initiatives, companies are forced to recalibrate. Many organizations are quietly rebranding their efforts and stepping away from politicized acronyms, all while continuing to invest in responsible practices. This pivot reflects a larger reality: As political winds shift, the underlying market and stakeholder expectations around sustainability, transparency, and performance remain.  

Despite challenges, certain regulators continue to push for the adoption of sustainability reporting requirements, particularly the California Climate Corporate Data Accountability Act (CCDAA). Moreover, Commercial Real Estate (CRE) market participants make known notable sustainability gains, particularly in energy efficiency, emissions reduction, and climate risk, despite regulatory confusion. Consequently, the new challenge is not justifying sustainability performance but defining the best approach for disclosure.

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Voluntary Sustainability Reporting as a Baseline

In contrast to the SEC’s announcement, CCDAA is well on its way to implementation, with the first climate risk reports due in 2026, escalating to require Scope 3 emissions reporting in 2027, and with limited assurance on Scope 3 emissions required by 2030. This adds to the dizzying array of municipal and state-level benchmarks as well as building performance standards (BPS), each set around varying operational thresholds that determine distinct reporting requirements ranging from detailed disclosures on greenhouse gas emissions (GHG) to comprehensive reporting on climate-related financial risk.

For CRE managers, navigating these varied compliance requirements can be challenging. As new regulatory initiatives emerge and existing ones evolve, it can be difficult to fully understand an organization’s total compliance risk.

Thankfully, to ensure market support and readiness, each of these reporting regimes has a vested interest in seeking significant alignment with leading voluntary frameworks (IFRS, TCFD, GRI, etc.). Therefore, adoption of these voluntary reporting frameworks as part of an organization’s compliance risk management strategy can serve as a strong baseline for future regulated reporting requirements. This can, in turn, help ensure that, regardless of the reporting regimes enacted, the organization already has many of the necessary reporting procedures and data in place to meet requirements.

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Stagnant Reporting Commitments, but Growing Performance

Leading into 2024, voluntary reporting to frameworks such as Global Real Estate Sustainability Benchmark (GRESB), Sustainability Accounting Standards Board (SASB), Task Force on Climate-Related Disclosures (TCFD), Global Reporting Initiative (GRI), and the UN Principles for Responsible Investment (UN PRI) saw intense growth.

• SASB saw 2,530 total reporters for 2024, with 75% of American companies utilizing the SASB Standards. Up from 1,335 reporters in 2021.

• GRESB saw its 15^th year of straight growth, reaching a total of 2,223 participants covering a total gross asset value (GAV) of USD 7 trillion, up from 1,229 participants in 2020.

• 82% of companies that disclosed information aligned with at least one of the 11 TCFD-recommended disclosures.

• UN PRI grew to over 5,300 signatories, representing more than $121 trillion in assets under management (AUM), with 95% of signatories publishing their annual transparency report. An increase from 3,038 signatories in 2020.

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In 2025, however, reporting adoption and public commitments to various frameworks remain flat, if not down from 2024 numbers.

• SASB has seen 2,213 reporters to date in 2025, a decrease of almost 300 reporters from the prior year.

• IFRS S1 and S2 have yet to see any significant adopters in North America given the regulatory landscape. In response, IFRS has published guidance in hopes of easing the transition from TCFD to IFRS S2.

• As of March 2025, UN PRI has 5,261 total signatories. Down slightly from over 5,300 in 2024. UN PRI’s updates for 2026 will also simplify the reporting process and, particularly for new reporters, drastically reduce the burden to ~40 indicators.

• GRESB reached 2,382 global participants for 2025. Although the year-over-year growth rate is lower than in prior years (7% vs 16% average between 2020-2024), this still represents growth from the 2,223 participants in 2024.

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GRESB’s unique adoption growth for the 2025 reporting cycle can be attributed to the assessment’s ability to standardize industry-specific data collection and reporting. This also allows participants to easily benchmark performance against peers. However, the overall trend is clear. Voluntary reporting adoption is slowing and frameworks are responding in kind to reduce the burden to report. Despite the headwinds in reporting adoption, another trend is also becoming very clear as the 2025 reporting cycle completes and GRESB results become available: CRE asset managers are still expected to drive forward sustainability performance. On average, funds across the range of sustainability maturity have drastically increased their performance against the GRESB assessment, as made evident by the average 3.1 points increase in all the star thresholds between 2024 and 2025.

GRESB’s scoring adjustments also reflect a continued growth and emphasis on building sustainability performance. For the first time, the 2025 GRESB assessment rewarded full points to buildings that were energy efficient, with efficiency defined as performance below their respective ASHRAE energy use intensity (EUI) thresholds. In 2026, climate risk identification processes and their connection to financial impact will gain increased scoring weight. It’s clear what GRESB is pushing the industry towards. Governance systems and processes for identifying risk are no longer sufficient to differentiate organizations amongst peers; managers must also systematically act on those risks.

Emphasis on sustainability progress extends beyond just GRESB submissions. In a study of 75 global firms, 85% held steady or accelerated their sustainability efforts. Still, in 2025, we find that companies with climate and sustainability considerations actively embedded into operating models will continue to find value by measuring, reporting, and managing said sustainability issues.

For organizations with growing data center dependencies, strides in energy efficiency and renewable energy acquisitions are of paramount importance. This focus is led in large by tech firms, such as Meta, which is purchasing 650 MW of renewable energy to power U.S. data centers, and Microsoft, with its recent $6 billion deal to power artificial intelligence (AI) computing capacity with 100% renewable energy. In sum, growth in the data center industry will continue to pose a significant transition risk question for CRE market participants, regardless of their reporting commitments.

Data centers currently consume 1.5% of global electricity, with demand expected to double by 2030. Unchecked, this boom in demand is projected to produce 2.5 billion metric tons of emissions by 2030, which contrasts with the emissions reduction targets set by numerous asset managers in the same timeline. So, how will data center operators continue to source quick, reliable, and cost-effective energy solutions to meet this growing demand? And, moreover, how will they achieve this in a manner that grants them the necessary license to operate, considering that $64B in US projects have already been delayed or blocked due to community pushback over power and water use?

A core part of the answer is standardized and decision-useful reporting. With the massive growth in AI usage, data centers are of significant interest. But no matter what the core sector focus is (data centers, industrial, residential, office, or retail buildings, etc.), the need to collect and communicate decision-useful information is a prerequisite to managing an organization’s sustainability risk and opportunities in a way that truly aligns with its core business strategy.

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What this means for reporting on strategy

So, in this period of ‘greenhushing’, what do organizations report? It’s important to remind ourselves that the true value of sustainability reporting extends beyond compliance. Yes, regulators are key stakeholders, but ultimately, reporting is about measuring, understanding, and communicating the value of sustainability performance in a way that informs the organization’s strategy and every stakeholders’ decision-making. In short, the progress and value of an organization’s sustainability strategy should be understood whether a stakeholder is an investor, regulator, tenant, or part of the executive leadership, investment committee, or risk management team.

Our current sustainability reporting landscape, with all its various frameworks, built its foundation before the manic rush of reporting between 2020 and 2024. It took shape out of market demand for standardized, decision-useful sustainability data during a time with zero regulatory support. Now, particularly for CRE asset managers where real assets have such unique sustainability challenges, the question is how to accurately represent financially-material performance and drive capital allocation decision making in alignment with investors’ risk appetite and sustainability preferences.

Considering these shifts, developing a coherent reporting strategy may feel more challenging than ever. CRE managers must continue to reflect critically and ask themselves:

• What sustainability performance are they reporting?

• Who are they reporting to?

• And, perhaps most importantly, why?

While those questions may continue to become increasingly complex in today’s economic and regulatory landscape, service offerings have matured to keep pace. Data acquisition and associated services have evolved to meet the increasing number of data points, ensuring reporting accuracy and providing stakeholders with the appropriate decision-useful context and information, which allows organizations to focus more on performance and associated financial drivers.

RE Tech Advisors is a trusted service provider that can help organizations navigate uncertainty and manage their sustainability reporting processes. From shaping a reporting strategy to collecting data, generating reports, and integrating insights into broader fund strategies, our cross-functional teams can give organizations the latest insights to enable informed decisions in uncertain times.