The expectations and mandates surrounding the disclosure of environment, social and governance (ESG) factors and impacts are a moving target. We break down the current context in the next installment of the Purpose Decoded Forecast video series, “2023 ESG Disclosure Landscape”.
The lack of shared language around ESG and a standardized approach to disclosure causes confusion and criticism that undermine the broader adoption of ESG strategies. ESG is seen as the future of capital markets, with ESG assets expected to reach one-third of the projected total assets under management globally by 2025. Further, a majority of large companies report on ESG performance and the number of companies will only increase given rising investor expectations for ESG data and regulator mandates for the disclosure of certain ESG factors, especially aligned to climate commitments. But there’s a long way to go before ESG disclosure truly comes of age.
To understand the dynamics of the ESG disclosure context today, we spoke to the experts. The “2023 ESG Disclosure Landscape” video provides perspective on why ESG disclosure matters and how alignment to relevant and reliable disclosure practices can help corporate leaders leverage ESG to drive business performance, investors better evaluate risk and all stakeholders achieve impact on collective priorities such as the net-zero transition.
Mindy Lubber, CEO and President at Ceres, wishes there were global standards for any number of critical ESG issues, but laments that the “reality is there is no go global governance mechanism”. David Wei, Managing Director at BSR, agrees and would like to see governments adopt “harmonized disclosure rules”. Further, Jonathan Adashek, Senior Vice President for Marketing and Communications at IBM, anticipates a lot more “governance and reporting focus from government entities” in the U.S. Europe and Asia this year.
Amy Hepburn, CEO at Investor Leadership Network, wants to ensure the investment sector thinks harder about “what we’re asking corporates to tell us and how we’re going to use that data to inform our investments” to ensure the evolution of ESG disclosure remains focused and relevant.
In this context, Victoria Mills, Managing Director at EDF + Business, hopes corporate leaders “shift the mental model around ESG from disclosure to improvement” in the year ahead to advance ESG from a compliance exercise to a strategic business driver.