This paper looks at the increasing set of requirements relating to environmental, social and governance (ESG) factors, from both accountancy bodies and financial regulators, and their impact on companies and enterprises of all kinds.
Around the globe, voices clamoring for climate-aware investing and carbon controls are increasing. Demand for ethical treatment of employees, customers and other stakeholders is also growing, as is indignation about poorly-managed companies.
Companies are subject to an increasing set of non-financial reporting requirements relating to ESG factors. A swathe of new requirements will soon impact the investment and lending appetites of EU financial institutions. Coupled with increasing investor demands, these new rules could have a profound impact on companies’ ability to raise capital, within the EU and beyond.
Companies need to take action now on assessing ESG risks and opportunities for their businesses and on proper ESG disclosures, in order to be prepared for these changing demands and for the growing expectations of companies' financial and non-financial reporting.
Direct and indirect pressures on corporates and other types of enterprises to make more detailed ESG-related disclosures are increasing. Greater transparency is, in turn, leading to increased scrutiny of companies’ business and operating models, their carbon footprints and their exposure to climate change.