ESG and design firms in Europe: Navigating client expectations amid regulatory demands

Clients of design and architectural firms across Europe are increasingly seeking partners who can contribute meaningfully to their Environmental, Social, and Governance (ESG) goals. With regulatory frameworks tightening and expectations rising, it’s no longer enough to simply create beautiful spaces. Today, designers must also demonstrate that their work supports measurable sustainability outcomes.

A Shifting Regulatory Landscape

The European Union has been at the forefront of ESG legislation, but recent developments reflect both the complexity of these frameworks and a desire to balance ambition with practicality. One of the most significant changes is the delayed implementation of the Corporate Sustainability Reporting Directive (CSRD). In April 2025, the European Parliament agreed to postpone mandatory reporting deadlines for many companies, extending the timeline for compliance by two years. While large corporations still face near-term reporting requirements, this move is a response to concerns about administrative overload and readiness, especially among small and medium-sized enterprises.

At the same time, the European Commission introduced the “Omnibus Simplification Package” in February 2025. This initiative proposes not only scaling back the number of companies required to report under the CSRD but also simplifying the depth of disclosures. These adjustments indicate that while ESG remains a top priority, the path to compliance will be more flexible than initially expected.

Parallel to the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), adopted in 2024, remains in force. It requires companies to identify and prevent negative environmental and human rights impacts in their operations and value chains. For design firms that work with large clients, particularly those with international footprints, this means higher expectations for responsible sourcing, ethical labor practices, and transparent material documentation.

What This Means for Design and Architecture

For firms aiming to position themselves as valuable partners in their clients’ sustainability journeys, aligning with ESG goals requires more than environmental certifications or a green portfolio. It calls for a strategic, integrated approach.

Environmental goals are perhaps the most obvious starting point. Design teams can add tangible value by reducing a building’s environmental footprint through passive strategies, energy-efficient systems, and careful material selection. Choosing products with low embodied carbon, prioritizing local sourcing, and considering reuse or recyclability at end of life all support a client’s Scope 3 emission reductions. Meanwhile, water-sensitive design, rainwater harvesting, and biodiversity-enhancing landscapes respond to rising concerns about resilience and climate adaptation.

Social factors are often less visible but no less critical. Firms that prioritize inclusivity and health, through universal design principles and community engagement, can help clients demonstrate social responsibility. Projects that promote health and well-being, from better air quality and acoustic comfort to biophilic design and natural light optimization, contribute directly to a company’s social impact metrics.

Governance alignment requires transparency, traceability, and ethical operations. Architectural firms must be able to articulate how their design decisions align with sustainability targets, provide documentation to support ESG reporting, and work with suppliers who meet environmental and labor standards. As clients face mounting pressure to disclose and verify sustainability claims, trusted partnerships with design professionals who understand the regulatory landscape become essential.

Beyond Compliance: A Competitive Advantage

Though some regulatory requirements are being eased or delayed, the direction of travel is clear. ESG is becoming a universal business standard, not a niche concern. For design firms, this shift presents a chance to lead. Those who can integrate ESG thinking into every stage of their work, from concept development to material specification and stakeholder engagement, will be better equipped to attract value-driven clients, win public tenders, and future-proof their business.

Architectural practices that speak the language of sustainability, and back it with credible action, aren‘t just keeping pace with legislation. They’re building lasting value, one responsible project at a time.

Sources:

• Eye on ESG – EU delays CSRD and CSDDD

• Sidley – EU Omnibus ESG Simplification Package