From compliance to competitive advantage: A case for the boards or how European ESG regulation reshapes corporate strategy

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.