The business world is experiencing a seismic shift. Environmental, Social, and Governance (ESG) principles are no longer optional considerations for international businesses but mandatory pillars of corporate strategy. As we navigate through 2025, global ESG assets are expected to reach between $35 and $50 trillion by 2030, fundamentally transforming how companies structure their international operations.
For businesses operating across multiple jurisdictions, this transformation presents both unprecedented challenges and remarkable opportunities. The question isn’t whether ESG will impact your international structuring decisions; it’s how quickly you can adapt to stay ahead of the curve.
Let’s explore why this shift is happening, what regulators are demanding, and, most importantly, how your business can not only survive but also thrive in this new landscape.
Why are regulators demanding unprecedented transparency?
The regulatory environment around ESG has evolved from gentle encouragement to mandatory compliance with serious consequences. This isn’t happening in isolation; it’s a coordinated global effort to create transparency and accountability in the corporate world.
The EU has positioned itself as the global standard-setter for ESG regulations. Large EU companies with EUR 50 million+ in net turnover, EUR 25 million+ in assets, or 250+ employees are required to submit initial ESG disclosures in 2026, covering FY 2025. This Corporate Sustainability Reporting Directive (CSRD) represents one of the most comprehensive ESG frameworks ever implemented.
What makes this particularly significant for international structures is that these requirements don’t stop at EU borders. Any company with significant EU operations, subsidiaries, or substantial revenue from EU markets may be subject to these regulations. This creates a ripple effect that touches businesses worldwide.
Global standards are converging
In 2025, the influence of the ISSB sustainability disclosure standards (IFRS S1 and S2) will be felt globally, helping to drive consistent and transparent sustainability reporting across jurisdictions. This convergence means that businesses can no longer play regulatory arbitrage by choosing jurisdictions with weaker ESG requirements.
The International Financial Reporting Standards Foundation and various national regulators are actively collaborating to create unified reporting standards. This coordination eliminates the previous advantage of structuring operations in jurisdictions with minimal disclosure requirements.
Technology enables enforcement
Modern technology has given regulators unprecedented ability to monitor and enforce compliance. As ESG and sustainability reporting increasingly become mandatory in 2025 and beyond, a growing number of entities, including smaller companies with key roles in corporate supply chains, will likely be drawn to AI tools to accurately and reliably collect data.
This technological advancement means that even complex international structures can be monitored and analysed in real-time. Regulators can now trace environmental impacts, social responsibility measures, and governance practices across multiple jurisdictions and corporate entities.
While global standards are emerging, the ESG regulatory landscape is becoming increasingly fragmented, with federal climate disclosure rules stalled in the US, while state-level mandates are gaining momentum, and EU regulations face uncertainty. This fragmentation creates a challenging environment where businesses must navigate multiple, sometimes conflicting, regulatory requirements.
For international structures, this means you can’t rely on a one-size-fits-all approach. Your ESG strategy must be sophisticated enough to handle varying requirements across different jurisdictions while maintaining consistency in your overall corporate governance approach.
How innovative businesses stay ahead and avoid costly surprises
The companies that will thrive in this new environment are those that view ESG compliance not as a burden but as a competitive advantage. Here’s how forward-thinking businesses are positioning themselves for success.
Proactive structure design
Innovative businesses are redesigning their international structures with ESG compliance built in from the ground up. This means considering ESG implications during the initial structuring phase rather than retrofitting compliance measures later.
Modern international structures now incorporate governance mechanisms that facilitate transparent reporting, ensure diverse board representation, and create clear accountability chains for ESG performance. This proactive approach eliminates the need for costly restructuring when new regulations emerge.
Investment in technology and data systems
Environmental, social and governance (ESG) principles continued to gain momentum in 2024, shaping corporate strategies, regulatory frameworks, and stakeholder expectations worldwide. This year saw significant advancements in regulations, technological integration, and metrics standardisation.
Leading companies are investing heavily in ESG data management systems that can automatically collect, analyse, and report ESG metrics across their international operations. These systems provide real-time visibility into ESG performance, ensuring consistent reporting across all jurisdictions.
Rather than waiting for regulations to become mandatory, successful businesses are voluntarily adopting emerging ESG standards. This approach offers several advantages: it demonstrates leadership to stakeholders, allows time to refine processes before compliance becomes mandatory, and often provides a competitive advantage in securing investment and partnerships.
Stakeholder engagement strategy
Companies are now required to provide more comprehensive information on their ESG practices. This includes detailed data on carbon emissions, energy consumption, and other relevant information. But leading companies go beyond mere compliance.
They are utilising enhanced transparency as a tool for stakeholder engagement, building trust with investors, customers, and regulators by providing precise and accessible information about their ESG performance and improvement strategies. Companies may structure ESG governance in several ways: a Dedicated ESG committee.
A specialised group focuses solely on sustainability, allowing members to develop and recommend ESG strategies to the broader board. For international structures, this governance model must be replicated and coordinated across multiple jurisdictions.
Effective international ESG governance requires clear reporting lines, consistent policies across all entities, and regular communication between ESG committees in different jurisdictions. This ensures that your ESG strategy is implemented consistently regardless of where your operations are located.
Building competitive advantage
The businesses that will emerge as winners in this new landscape are those that recognise ESG compliance as a source of competitive advantage rather than just a regulatory burden. Strong ESG performance can lead to better access to capital, improved customer loyalty, enhanced employee recruitment and retention, and stronger relationships with regulators and governments.
Looking ahead: The future of ESG in international business
As we move through 2025 and beyond, ESG considerations will become increasingly integrated into international business structures. The companies that start preparing now will have significant advantages over those that wait for regulations to force their hand.
The integration of ESG principles into international structuring isn’t just about compliance; it’s about building sustainable, resilient businesses that can thrive in an increasingly interconnected and environmentally conscious world. The companies that recognise this early and act decisively will find themselves well-positioned for long-term success.
The transformation is already underway. The only question is whether your business will lead the change or struggle to catch up. The choice, and the competitive advantage that comes with it, is yours to make.
For businesses serious about staying ahead in this evolving landscape, now is the time to reassess your international structures, strengthen your ESG governance frameworks, and position yourself for success in the transparent, sustainable business environment of the future.