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From compliance to competitive advantage: A case for the boards or how European ESG regulation reshapes corporate strategy
Download This ArticleAnnapaola Voto
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This study analyzes the evolution of corporate social responsibility (CSR) into environmental, social, and governance (ESG) frameworks, examining the shift from voluntary initiatives to mandatory regulatory compliance. Through historical analysis and case studies, we trace how sustainability practices transformed from philanthropic activities to strategic business imperatives. The study focuses on European Union (EU) regulatory changes, particularly the European Sustainability Reporting Standards (ESRS), which establish binding sustainability obligations for businesses. The findings reveal that this transition creates both challenges and opportunities for organizations, requiring integration of sustainability into core strategy while potentially driving innovation and competitive advantage. The research provides actionable guidance for business leaders navigating mandatory ESG requirements, emphasizing that sustainability has become both a strategic and regulatory imperative in global business.
Keywords: ESG Strategy, Corporate Governance, Regulatory Compliance, Dual Materiality, Sustainable Value Creation, Board Leadership, European Sustainability Reporting Standards, ESRS
Authors’ individual contributions: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.
Declaration of conflicting interests: The Author declares that there is no conflict of interest.
JEL Classification: G38, L51, M14, M41, Q56
Received: 30.05.2025
Revised: 29.07.2025; 13.08.2025
Accepted: 22.08.2025
Published online: 25.08.2025
How to cite this paper: Voto, A. (2025). From compliance to competitive advantage: A case for the boards or how European ESG regulation reshapes corporate strategy. Corporate Board: Role, Duties and Composition, 21(2), 102–108. https://doi.org/10.22495/cbv21i2art9
