More than seven in ten financial services organisations in Ireland (71pc) believe that President Trump’s rollback of ESG regulations – and expected further changes by his administration later this year – will impact compliance within Irish organisations to varying degrees. While more than half expect the impact to be “moderate”, a further one in five (20pc) believe the impact will be “significant” and are anticipating major shifts in compliance expectations.
These findings are based on a recent survey carried out by the Compliance Institute, Ireland’s professional body for compliance professionals, which gathered insights from approximately 110 compliance experts working in financial services firms nationwide. They come on the back of recent developments whereby the European Banking Authority (EBA) has told national regulators not to focus on enforcing new ESG disclosure rules for now, after issuing a “no-action” letter ahead of planned EU reforms to simplify sustainability reporting requirements.
The Compliance Institute survey also found that one in four (26pc) organisations believe the effect on Irish compliance requirements will be minimal for now, though still worth monitoring. The findings come on the back of a recent softening of the European Commission’s approach to ESG reporting in SMEs and a new recommendation on voluntary sustainability reporting for small and medium-sized enterprises (SMEs), aimed at easing reporting demands[1].
Michael Kavanagh, CEO of the Compliance Institute, commented on the findings,
“The Trump administration’s rollback of ESG policies - from exiting the Paris Agreement to rolling back on climate regulations, DEI initiatives, and sustainable investment rules - marks a significant shift in US policy. These moves are already reshaping investor behaviour and regulatory expectations, with ESG funds and green bonds seeing notable declines. If this trajectory continues, we could see further weakening of US climate disclosure requirements and potentially even trade pushback against EU ESG rules. For Irish firms with US links or trans-Atlantic operations, this divergence could create serious compliance complexities and strategic uncertainty. Businesses will need to navigate not just differing regulatory regimes, but also increasingly politicised attitudes to ESG on both sides of the Atlantic”.
“The survey points to heightened awareness among Irish financial services firms that ESG regulatory changes in the US and EU will have significant downstream effects on Irish compliance frameworks. While most expect some impact, the fact that one in five foresee ‘significant’ disruption underscores the scale of uncertainty and challenges ahead. This variation reflects how uneven and evolving global ESG frameworks remain, making it difficult for firms to predict what compliance will look like in the near future and forcing many to prepare for multiple scenarios.
The European Commission’s recent move to ease reporting requirements for SMEs is a welcome attempt to balance regulatory demands with practical realities. However, it also signals that the broader trend toward tougher sustainability expectations will only accelerate. Compliance teams must proactively engage with these changes to build flexibility and resilience into their processes, or risk falling behind as ESG shifts from a regulatory obligation to a core business imperative”.
Worrying Gaps in ESG Preparedness Emerge
Despite widespread recognition that ESG regulatory changes will impact Irish compliance, the survey reveals a concerning lack of action. Just four in ten (40pc) financial services firms say they are proactively preparing for shifting ESG frameworks. Nearly half (47pc) admit the issue is on their radar but confirm they have yet to take any concrete steps.
Mr Kavanagh added,
“ESG is not a static or optional consideration. It is a fast-moving, increasingly embedded part of regulatory, reputational, and operational risk. The current divergence in global frameworks may create complexity, but it is not a reason to delay action; it’s a reason to accelerate it.
Compliance teams should be scenario-planning now, engaging with stakeholders, and building internal ESG capability. Those waiting for clarity may find themselves out of step with emerging regulatory demands, and by the time certainty arrives, it may already be too late to respond effectively”.
