Sustainability regulations are no longer just about compliance – they’re driving product innovation, operational efficiency, and market leadership 

Sustainability mandates have long been framed as a regulatory burden. The State of Sustainability Reporting in Europe, a new study by osapiens, tells a different story: 81% of senior sustainability professionals across Europe now view sustainability reporting as drivers of innovation and competitive advantage. With over 77% of companies already automating parts of their sustainability reporting, many are beginning to reap the rewards of earlier investments. However, a lack of internal ESG expertise continues to slow progress across markets, with 25% citing this as an issue. 

The study is based on a survey of 250 senior leaders across six European key markets: DACH, Benelux, the Nordics, France, Spain and Italy. Industries represented range from manufacturing and retail to automotive, chemicals, and life sciences. 

From Compliance Obligation to Strategic Lever 

While European companies are increasingly embracing sustainability reporting, the pace of transformation varies significantly across regions. The DACH region leads the way, with 88% of companies using automation tools in their sustainability reporting. However, only 29% have reached full automation, nearly double the European average of 15%, but still indicative of widespread reliance on partial or manual systems. 

Elsewhere, adoption remains uneven: 60% of companies in the Nordics and Spain report having introduced automation, followed by 54% in France, 40% in Benelux, and just 36% in Italy. This points to a broad maturity gap in digital infrastructure across the continent. 

Notably, 97% of DACH sustainability leaders – and 90% in the Nordics – see reporting as a clear advantage, reinforcing a growing shift in mindset: from regulatory obligation to strategic opportunity. Where automation is taking hold, companies are moving beyond compliance. They are embedding sustainability initiatives into product development, operations, and digital infrastructure, driving product innovation (52.8%), process efficiency (47.2%), and stronger Market positioning (46.8%) as measurable outcomes. 

Sustainability Reporting as a Catalyst for Innovation 

More than half of the companies surveyed say sustainability efforts have led to new or improved offerings. Examples range from sustainable packaging to climate-resilient supply chains and AI-based risk tools. While 65% of DACH companies report sustainability-driven product innovation, France (40%) and Spain (31%) are catching up. What unites leaders across Europe is the use of digital infrastructure and reliable data as levers for long-term value creation. 

“Across Europe, sustainability is no longer a compliance exercise – it is a strategic priority that drives innovation, resilience and market leadership. European businesses are setting the global benchmark, turning sustainability into a catalyst for innovation and long-term growth”, said Alberto Zamora, Co-Founder and CEO osapiens.  

Why Full Sustainability Automation Remains Elusive 

Despite progress, full automation is still out of reach for many. The biggest barriers include implementation costs (30%), limited internal expertise (16%), and integration with legacy systems (14%). A broader knowledge gap remains, particularly in Benelux (36%), DACH (33%), and Italy (26%), where teams often lack the skills to manage sustainability data effectively. 

Inconsistent reporting is common outside DACH due to fragmented systems, while DACH firms struggle more with manual data collection (36%) and verification for audits (29%). Without reliable, centralized data, sustainability metrics remain disconnected from core business decisions, limiting their strategic value. 

Where Automation Delivers the Most Value 

For those investing in automation, the payoff is clear. The most impactful areas include data collection and validation (38%), reporting and audit readiness (30%), and compliance tracking (30%). Risk management and stakeholder communication also benefit. These capabilities not only reduce administrative burden but also increase accuracy and accountability across sustainability functions. 

The Invisible Challenge: Supply Chains Remain in the Dark 

Nearly one in three companies (30%) cite supplier compliance as their top reporting issue. Deeper in the supply chain, reliable and timely data becomes scarce, and nearly a quarter of respondents say they lack confidence in achieving full transparency. Outdated systems and manual tracking make it hard to trace Scope 3 emissions or verify third-party claims– turning sustainability strategies into reactive exercises. The cost: missed opportunities to reduce risk, optimize suppliers, and build resilient, accountable operations. 

Conclusion: Turning Compliance into Competitive Edge 

“The State of Sustainability Reporting in Europe” shows that sustainability reporting is evolving from a regulatory requirement into a strategic driver of innovation and competitiveness. Companies that invest in automation and data are already reaping the benefits in terms of product development, efficiency and risk management. However, progress is uneven. A lack of expertise, fragmented systems and limited supply chain transparency remain key obstacles.  

“What businesses need now is simplicity and transparency. The ability to bring all that data together in one place, so they can move from compliance to control, and unlock the full potential of sustainability,” Zamora concluded. 

In order to transform compliance into a competitive advantage, organizations must integrate sustainability into their core business strategy in a consistent, digital, and end-to-end manner. 

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Methodology  

The study “The State of Sustainability Reporting in Europe” captures insights from 250 senior leaders across six of Europe’s key markets: DACH, Benelux, the Nordics, France, Spain, and Italy. Industries represented range from manufacturing and retail to automotive, chemicals, and life sciences, offering a comprehensive view of how sustainability strategies are evolving across sectors. 

The study focuses specifically on decision-makers in key functions, including Heads of Sustainability, Heads of Human Rights, CFOs, CIOs, and Heads of Supply Chain. All respondents represent enterprises with 250 or more employees, ensuring that the insights reflect the challenges and priorities of organisations with complex operational structures and regulatory exposure.