Environmental, social and corporate governance (ESG) reporting has started to drive corporate transformation around the world, particularly in sustainability efforts and company culture, according to latest research.
A series of case studies unveiled by the World Economic Forum (WEF), Stakeholder Capitalism Metrics Initiative: Partner Case Studies (Part 2), reveals that companies are making major strategic and operational changes. Chief among these are introducing new approaches to water management in real estate and implementing biodiversity policies and targets.
However, companies are still struggling with competing and disparate ESG frameworks around the world. As regulators begin to roll out mandatory reporting across regions, the WEF warns “there could be less transparency because people will not want to disclose more than they have to”.
Regulators and internal advocates should ensure corporations understand the full value of transparency on sustainability and other ESG issues, the organisation says. A focus on a common set of comprehensive and material metrics will be important for both the efficacy and feasibility of ESG reporting in the coming months.
The WEF calls on the EU, the US Securities and Exchange Commission and the International Financial Reporting Standards Foundation to align their metrics “as much as possible” to ensure companies can implement effective ESG reporting globally.
“Support continues to grow for this set of metrics, even in the face of geopolitical challenges, the lingering global pandemic and economic disruptions of the past two years,” said WEF head of private sector engagement on ESG Emily Bayley.
“As this growth continues and jurisdictions transition from voluntary to mandatory sustainability reporting standards, we hope these learnings can provide valuable insights for companies that are just getting started on sustainability reporting and those that have been doing it for years.”
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