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Friday 5
The gap in social impact
31 October, 2025
An analysis of the first CSRD wave of 2025 disclosures found that “Affected Communities” (S3) was the topic that was least reported on, with very low attention to civil and political rights or Indigenous communities. This reporting gap suggests that while companies are advancing on environmental and direct social metrics – 99 % of early reporters disclosed on Climate Change (E1) and 98 % on Own Workforce (S1) – many are still overlooking the broader social dimensions that underpin trust, innovation, and resilience.
The neglect of S3 comes at a time when many of the communities that it would drive focus on are also being negatively impacted by the retreat of Official Development Assistance (ODA), (broadly, this refers to government development investment and aid). This year, twelve countries have announced reductions in ODA, which is projected to fall by $62 billion annually by 2026. The reduction in US funding alone is already severely affecting health systems and predicted to result in 14 million deaths by 2030 globally.
The retreat in aid affects not only the vulnerable populations that rely on these funds worldwide, but also communities and businesses within donor countries. We see this in the UK, where ODA cuts over the past five years have not only harmed those most in need, but also impacted international standing and created potential long-term national security risks, according to the International Development Committee’s recent report.
For businesses, fragile communities and destabilised services can translate into supply chain disruption, volatile markets, and reputational exposure. At the same time, companies that proactively focus on the communities within their supply chains can mitigate risk, maintain demand for goods and services, safeguard jobs, and support trade continuity.
A greater focus on S3 could help here, helping companies to recognise community impact of their operations, collect robust data, and engage with external social challenges alongside environmental ones. Investing in communities’ wellbeing strengthens resilience, benefits environmental matters, and drives shared prosperity. Just as governments benefit when societies are stable and healthy, so too do businesses – and the planet.
By Sarah Forero