SEC vs. EU on ESG: What Global Companies Need to Know (May 2025 Update)

As of May 22, 2025, the global ESG playing field has fractured. Multinational companies now face sharply different rules depending on which side of the Atlantic they operate. The EU is tightening ESG disclosure rules, while the U.S.—under President Trump’s second term—is rolling them back at pace.
This isn’t a forecast. It’s already happening. EU deadlines are locking in. U.S. rules are being unwound. If your strategy still hinges on “wait and see,” you’re nearly out of time.

1. Materiality: Two Different Worlds

• U.S. (SEC): Focuses on financial materiality—you only disclose what directly affects your bottom line.
• EU (CSRD): Uses double materiality—you report both financial impacts and how your business affects people and the planet.

🔍 Why it matters now: Companies subject to the CSRD must have already completed double materiality assessments for their 2024 reports. U.S. companies with EU subsidiaries can't afford to ignore this—delays mean non-compliance risk.

2. What Emissions Must Be Disclosed?

• SEC: Scope 1 and 2 are required in limited cases. Scope 3 (indirect emissions) only if it's “material” or publicly pledged.
• CSRD: Requires disclosure of Scopes 1, 2, and 3 for all in-scope companies—plus data on water use, waste, labor, governance, and more.

As of May 2025: EU companies are finalizing 2024 data collection. Global firms are racing to get a handle on Scope 3, while the SEC's rule enforcement has been suspended.

3. Who’s Covered?

• SEC: Applies to U.S.-listed companies above certain thresholds.
• CSRD: Applies not only to EU companies, but also non-EU companies with over €150 million in annual EU turnover—regardless of where they’re based.

Why this month matters: Many U.S. and Asian firms still haven’t realized they’re on the hook under CSRD. Systems need to be in place now to report 2025 data by early 2026.

4. Audit Requirements & Reporting Format

• SEC: Assurance optional or phased-in, depending on the rule's future.
• CSRD: Requires limited assurance from independent third parties starting in 2025. Reports must follow ESRS standards and be machine-readable.

Current reality: Most companies are auditing sustainability data for the first time this year—and finding it’s not a simple lift.

🇺🇸 What’s Changed Under Trump 2.0?

Since returning to the office in January, President Trump has acted swiftly to reverse key ESG and climate regulations:


Bottom line: The U.S. is now charting a very different course from Europe. If you're a global firm, you're stuck in the middle.

What Should Global Companies Do—Now?

With no global ESG standard in sight, you’ll need a tailored strategy. Here’s the immediate playbook:

For CSRD (EU):

• Finalize double materiality assessments
• Lock down your 2024 reporting process
• Begin third-party audit preparation now

For the U.S.:

• Stay the course on ESG transparency—even if it's no longer mandated
• Use the regulatory lull to clean up internal data and systems
• Prepare for investor pressure, which isn’t going away

How Hermesnet Helps

At Hermesnet, we support ESG and compliance teams juggling multiple frameworks and jurisdictions:

• Map disclosures across CSRD, SEC, ISSB, and TCFD
• Automate Scope 1–3 tracking and double materiality workflows
• Generate audit-ready ESG reports with real-time dashboards

Policy will shift again. Be ready either way.

Book your free ESG readiness assessment today or subscribe now.