Upward trajectory for ESG disclosure requirements
Published date: 22 July 2020
Published date: 22 July 2020
Substantial increase in sustainability reporting regulations around the world. A new report assessing the regulatory landscape for sustainability reporting has found that environmental, social and governance (ESG) disclosure has never been more pervasive globally – and is now firmly in the mainstream of disclosure on organizational performance. As the market implications of certain ESG topics become more evident, interest in the quality of disclosures is also sharpening.
The fifth edition of Carrots & Sticks (C&S) provides an analysis of the latest trends in reporting provisions, covering 614 reporting requirements and resources (a substantial increase on the 383 assessed in the previous report in 2016) across over 80 countries, including the world’s 60 largest economies. A new addition in 2020 is insights and context gathered through interviews with policymakers, who give their views on good practices in phasing in ESG disclosure requirements.
Key findings of C&S 2020 include:
Carrots & Sticks is an initiative of GRI and the University of Stellenbosch Business School (USB), with contributions by the UN Environment Programme (UNEP).
As the pandemic focuses the attention of policymakers on how to achieve resilient and climate-friendly economies, the importance of measuring the impacts of companies and encouraging sustainable practices increases. It is positive therefore that both the range and depth of ESG reporting provisions around the world has grown substantially. Yet questions remain on how to address gaps, particularly in the context of the SDGs, and improve coordination to support more consistent disclosure. To address this twin challenge – spreading the practice of disclosure and driving up the quality – needs strengthened reporting requirements, for which GRI will play an enabling role.Peter Paul van de Wijs, GRI Chief External Affairs Officer
Stock exchanges and central banks are becoming more active in pursuing non-financial reporting requirements. This shows how the economic and market implications of diverse ESG topics are becoming more evident. The obvious example is climate-related disclosures. After 2020, the systemic implications of public health and infrastructure weaknesses is likely to receive more attention as well. The regulatory landscape both reflects and drives perceptions of what are key material themes. Related is the question of target audience. The landscape continues to display confusion about where best to disclose information and who is supposed to be using different types of information.Cornis van der Lugt, Senior Lecturer Extraordinaire, USB
Notes to editors
Carrots & Sticks is the flagship publication and online resource for policymakers on non-financial and sustainability reporting instruments, regulation, guidance and frameworks.
C&S was first published in 2006. Its fifth edition (2020) has the addition of in-depth interviews with policy and other decision-makers from 13 countries and regions, including national governments, regulatory bodies and stock exchanges.
In November 2019, Carrots & Sticks announced a new partnership with the Reporting Exchange of the World Business Council for Sustainable Development to improve user access to reporting information by aligning their taxonomies. The two leading initiatives also agreed on their respective target audiences, with Carrots & Sticks supporting policy actors and the Reporting Exchange supporting business managers.
The Global Reporting Initiative (GRI) is the independent international organization that helps businesses, governments and other organizations understand and communicate their impacts.
The University of Stellenbosch Business School (USB) is a triple-accredited business school based in Cape Town, South Africa. Its vision is to be recognized as a source of value for a better world.
GRI: Sue-Lane Wood – Senior Communications Manager (+31 628 88 89 65)
USB: Cornis van der Lugt – Senior Lecturer Extraordinaire (+27 21 918 4342)