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Business sustainability is rooted in the concept of the triple bottom line, which aims to balance performance and growth through fiscal stewardship, environmental stewardship, and social responsibility. An essential component of business sustainability is transparency, whereby goals and performance against these goals are driven by commitments, and disclosed to stakeholders, both internal and external. This article provides an overview of mandatory and voluntary environmental, social and governance (ESG) reporting and disclosure regimes across the globe.

Mandatory ESG Disclosure

ESG reporting and disclosure requirements are increasingly embedded in securities and financial reporting statutes throughout the world.  


  • U.S. Securities and Exchange Commission (SEC) - Under Regulation S-K, reporting requirements include the effects of (i) compliance with regulations and environmental capital expenditures, (ii) legal proceedings, and (iii) trends, demands, commitments events, and uncertainties (i.e., management discussion and analysis) that may affect a company’s financial condition. Such disclosure is contained in annual 10-K and quarterly 10-Q reports.
  • SEC 2010 Interpretive Release - Commission Guidance Regarding Disclosure Related to Climate Change identified legislation/regulations, international accords, indirect consequences, and physical risks as areas for disclosure. The SEC chose to remind companies of their obligations under existing Federal securities laws and regulations to consider climate change and its consequences as they prepare disclosure documents.
  • SEC 2016 Concept Release – In its effort to gather feedback to improve disclosure under Regulation S-K, SEC also solicited input on disclosure of sustainability-related information. Feedback to the Concept Release on future reporting and disclosure under Regulation S-K is being evaluated by the SEC.
  • EU Disclosure of Non-financial and Diversity Information Directive – The Directive requires disclosure of information relating to environmental matters, social and employee-related matters, respect for human rights, and anti-corruption and bribery matters. Country-specific requirements vary and can include disclosure around material non-financial performance (e.g., Germany, Finland), employees (e.g., Italy, The Netherlands), social and environmental performance (e.g., France), and a Social Balance Sheet (e.g., Belgium). Several of these requirements were enacted before the aforementioned EU directive was in place (e.g., France, Belgium, and Finland).
  • Sustainability Reporting – Country-specific requirements can mandate environmental and/or sustainability reporting. Three examples include Japan, Brazil and South Africa. Registered businesses in Japan are required to develop annual environmental reports. In Brazil, energy utility companies are required to produce an annual sustainability report. South Africa requires that companies listed on the Johannesburg Stock Exchange issue integrated reports (i.e., financial and ESG information).
  • ISO 14001:2015 – For companies that choose to become certified to the new environmental management system (EMS) standard, requirements include addressing the needs and expectations of interested parties (i.e., stakeholders) and to establish, implement, and maintain processes needed for internal and external communications. While focused on the EMS and environmental performance, the bar has been raised on disclosure and potential for consideration of stakeholder views.


Voluntary ESG Reporting

Voluntary climate change and sustainability-related reporting and disclosure mechanisms have been developed, including but not limited to the following platforms:


  • Global Reporting Initiative (GRI) - An international independent organization that developed sustainability reporting guidelines, having evolved through four versions. It recently issued its sustainability reporting standards through the Global Sustainability Standards Board, which come into effect for reports issued after July 1, 2018. The GRI reporting guidelines are the most widely used for sustainability reporting, especially amongst global 500 companies.
  • CDP (formerly the Carbon Disclosure Project) - An independent not-for-profit organization that seeks disclosure on climate change business risks and opportunities and GHG data. Climate change disclosure has evolved, has become more complex, and reporting programs have extended into the areas of supply chain, water, public procurement, forestry footprint and a cities project, as well. The 2017 reporting cycle is in progress with investor questionnaires due by the end of June and supply chain questionnaires due by the end of July.
  • Climate Disclosure Standards Board (CDSB) - This guideline recommends disclosure around climate change strategy, physical and regulatory risks, and GHG emissions. Additionally, CDSB issued a framework that expands beyond climate change to include environmental/natural capital such as forest risk commodities and water.
  • International Integrated Reporting Council - A global framework for corporate reporting that demonstrates the linkages between an organization’s strategy, governance, and financial performance, and the social, environmental, and economic context within which it operates, resulting in an integrated report. The framework is augmented by a guide for using technology to support next gen reporting.
  • Sustainability Accounting Standards Board (SASB) - A U.S. based, non-profit organization that established industry-based sustainability standards for the recognition and disclosure of material ESG impacts by companies traded on U.S. stock exchanges. The SASB issued a complete set of standards covering 10 sectors and 79 industries.


Some of these sustainability reporting platforms have the potential to become mandatory in the future, particularly if supported or adopted by securities and accounting standards bodies. Additionally the proliferation of sustainability-related guidelines/standards provides a continuing challenge for reporting entities to decide which of these and others to use for their reporting and disclosure. Because these guidelines/standards can have very different reporting requirements, it complicates the reporting process and increases the level of effort required.


The complexity of business sustainability reporting and disclosure continues to increase, with such disclosures addressing corporate governance, strategy, risk and opportunity management, and associated programs and initiatives.


  • Disclosure of ESG performance is becoming increasingly embedded in the fabric of statutory securities reporting for publicly traded companies.
  • While sustainability reporting is largely voluntary, it is mandatory in an increasing number of countries and for targeted industry sectors.
  • The bar is being raised on ‘voluntary’ reporting frameworks, driven by stakeholder interests, including those of shareholders, business partners and civil society.


While there is overlap between these myriad requirements, they all have their own unique attributes that must be addressed. Consistency in reporting between these different venues is critical to corporate sustainability, credibility and reputation. For further information, please contact John Fillo, Principal Consultant, at (724) 996-1946 or