Regulators taking tougher stance on ESG disclosure
Written by staff reporter
Regulators are taking a tougher stance on ESG disclosure, according to a new report compiled by risk management software provider, Datamaran. In the last three years alone environmental, social and governance (ESG)-related regulations grew by over 100% across the UK, the US and Canada, indicating that the ESG regulatory landscape is picking up pace. The majority of sector-specific regulations published after 2015 are mandatory.
Focusing on healthcare and pharmaceuticals companies, utilities and financial services companies, Datamaran’s Global Insights Report analyses international, regional and national mandatory regulations as well as voluntary initiatives published between 2012 and 2018.
It found that sector free regulations grew by 158% in the UK (from 31 to 80 regulations), and by 145% in the US (from 29 to 71 regulations) and Canada (from 22 to 54 regulations). Social and environmental topics are becoming more prominent in these recent regulations. The most regulated topics are energy use (among US utilities companies), product and service safety in healthcare and pharmaceuticals (all regions), and business ethics in financial services (all regions). There has also been growth in regulation on climate change in the financial services sector and consumer rights for US utilities.
Commenting on the findings, chairman of The Committee of Sponsoring Organisations of the Treadway Commission (COSO) and CRO at Georgia-Pacific, Paul Sobel said: “Business has to think beyond the one and two year perspective to a much longer term as it evaluates the potential impacts of ESG risks. These risks are mainstream and they have to be part of the overall risk assessment and monitoring.”