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The Rise of International ESG Disclosure Standards

ESG reporting has received considerable attention in the past few years, which has in turn contributed to a 'boom' in sustainability reporting standards, goals and regulations being published. This has created an overpopulated sustainability standards environment and has made it difficult for companies to identify which standards are most applicable to their specific sustainability reporting needs.

🔥 ESG information can include a broad range of issues, for example: greenhouse gas emissions, energy, water and waste management/recycling, biodiversity (environmental), health and safety, diversity and inclusion, human rights, data security, selling practices, product safety (social) and business ethics and culture (governance).

🚀 A Global Approach
Globally, overall ESG investing is massive, having grown as much as tenfold in the last decade ; A global approach to sustainability reporting standards is necessary because:
- Climate change and the SDGs require a global approach
- Businesses have global value chains, face global risks, and access capital from global investors
- Investors, companies, and other stakeholders benefit from a common language for sustainability reporting standards, facilitating comparisons

🎯 Consolidation Of Standardisation
consolidation of the ESG disclosure ecosystem, the continued enhancement and standardisation of ESG data, and the analyses it promises to yield, should enable market participants to more precisely evaluate when ESG factors are relevant to the creation of long-term value, which in turn can facilitate more confident ESG investment decisions.

💡 Considerations -
- Based on multiple global goals, reporting frameworks are built and ultimately merged in sustainability regulations
- The three most important regulations are: the EU Taxonomy, Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB)
- Lack of sustainability expertise and data availability are the main challenges for solid sustainability reporting

✅ Bottomline - The sustainability reporting landscape is still young and everchanging, but by navigating through the global goals, frameworks and regulations, a fundamental structure is becoming clear. Companies should start with this basic agile structure of sustainability reporting and evolve from there. This will allow them to absorb regulatory and other changes over the next years

ℹ Let's see if any new regulations expected to be adopted in 2023 will result in exponential growth in the amount of Environmental, Social and Governance (ESG) i.e., sustainability, data generated by reporting companies and available to investors. ( Read- https://lnkd.in/daHkaMAF)

Good Read + Infographic Source - https://lnkd.in/dy36Ednf

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