“Waiting out on ESG is not an option”

Navigating ESG with EY Law Belgium

Vlerick: What’s the biggest challenge your clients face when it comes to ESG?

Peter Suykens, Managing Partner: “Over the past few years, the European Commission has rolled out a wave of sustainability regulations: complex, far-reaching and often overlapping. It started with broad support for the ideas, but as the Corporate Sustainability Reporting Directive (CSRD) was implemented, many companies were caught off guard by the detail and scope. Many legal teams weren’t prepared for hundreds of pages of reporting requirements.”

Vlerick: Are only large companies affected?

Peter Suykens: “Not at all. Although some regulations only apply to large firms, these firms are now requesting ESG data from smaller suppliers as well. So even SMEs feel the pressure, because they’re being asked to deliver information they’ve never had to track before.”

Vlerick: What reactions do you capture in the market?

Peter Suykens: “There’s growing frustration and resistance. Some early adopters are annoyed because regulations like the EU Deforestation Regulation (EUDR) are being delayed or revised, just when they’ve invested heavily in compliance. Meanwhile, laggards feel relieved. This inconsistency feeds uncertainty. But at some point, they will have to make the switch.”

Vlerick: How do you help Belgian companies stay on track?

Peter Suykens: “At EY Law, we look at the full ESG compliance journey that goes beyond one specific regulation. We start by assessing how mature a company already is: do they have a dedicated sustainability lead? A cross-functional team? Then we divide the work into two streams: one focused on legal and reporting obligations, which is being handled by our legal experts, and one on sustainability strategy and operations, often supported by engineers or consultants from the wider EY network.”

Virginie Ciers, Partner Corporate Law, M&A, Transactions: “ESG cuts across various legal domains: social, environmental, commercial, and compliance. As a law firm, you tend to work in silos, but ESG forces integration. That’s why we will always encourage clients to appoint someone who can connect the dots, especially in transactions where ESG performance affects company valuation.”

Vlerick: What should companies focus on first?

Peter Suykens: “Traceability. Whether it’s the Forced Labour Regulation or the CSRD that I referred to earlier, companies need to understand their supply chain. And with so many tech tools being developed for different rules, we advise clients not to jump at the first solution. We help them find systems that support multiple regulations, ideally with future AI integration. That’s also why EY has strategic partnerships with a.o. Microsoft and IBM.”

Vlerick: Where do ESG projects succeed – or fail?

Peter Suykens: “They succeed where sustainability is part of the company’s DNA, or when leaders assign a dedicated team. They fail where companies are still hoping the rules will go away. Spoiler alert: they won’t.”

Virginie Ciers: “Exactly. If you’re only reporting because the law tells you to, you miss the bigger picture. ESG reporting can actually create value, economic as well as social. We often see huge internal engagement from employees, especially younger ones. They want to contribute. So why not involve them? Many companies underestimate the social impact and how much ESG can boost employee morale and purpose. Reporting isn’t just about ticking boxes. It can spark pride, innovation and even client trust.”

Vlerick: How do you see ESG evolving in the next few years?

Peter Suykens: “Initially, the idea was that ESG data would allow Europe to tailor incentives by industry. But with today’s geopolitical climate, the focus has shifted to defence. A lot will depend on the next few years, politically and economically.”

Virginie Ciers: “Banks might increasingly demand ESG due diligence before financing M&A or investment deals. From a more general compliance perspective, we might see consolidation in some sectors. For small businesses, meeting all these rules is a costly exercise. But the smart ones will adapt and thrive.”