Stakeholders are increasingly factoring environment, social and governance (ESG) reporting into their assessments of business performance. They have broad expectations. More than 60% of consumers told us their ESG focus areas are: data security and privacy, climate change, product safety and quality, worker health & safety; and racial and gender diversity and inclusion. They want businesses to step up investments in all these areas.
Evolving rules and standards are also pushing to fast track ESG.
- In the US, the Securities and Exchange Commission (SEC) has proposed new rules to enhance and standardize companies’ climate-related disclosures. The proposed disclosures are broadly aligned with frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD).
- In the European Union, US-based companies with entities there will likely have to comply with the European Commission’s Corporate Sustainability Reporting Directive (CSRD).
- At the COP26 conference, the formation of the International Sustainability Standards Board (ISSB) was announced. It is an important step forward toward developing consistent ESG reporting standards and strengthening capital markets.