Research on ESG

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The requirement for companies to submit ESG (Environmental, Social, and Governance) reports to the government varies by country and jurisdiction. As of my last training data up to September 2021, here are some general trends and regulations:

Regulations/requirements

European Union:

  • The EU has been at the forefront of requiring ESG disclosure. The Non-Financial Reporting Directive (NFRD) requires large public-interest entities with more than 500 employees in EU member states to disclose non-financial information.
  • The EU's Sustainable Finance Disclosure Regulation (SFDR) requires financial market participants and financial advisers in the EU to disclose the ESG impacts of their products and services.

United States:

  • The Securities and Exchange Commission (SEC) has yet to mandate comprehensive ESG reporting as of the last update. However, it has shown increased interest in ensuring that companies provide accurate and consistent disclosures about ESG matters that are material to their business.
  • The SEC often requires disclosing certain ESG-related risks if they are deemed material to investors.

United Kingdom:

  • The UK has introduced regulations requiring certain companies to report greenhouse gas emissions, gender pay gaps, and other non-financial metrics.
  • The Financial Conduct Authority (FCA) has also proposed more consistent and comparable climate-related disclosures by listed companies.

Other Jurisdictions:

  • Many other countries, including Canada, Australia, Japan, and South Korea, have either introduced or are considering regulations or guidelines related to ESG disclosures.
  • In some countries, ESG reporting might be encouraged through stock exchange listing requirements rather than government regulations.

International Standards:

  • Organizations like the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD) have developed frameworks and standards for ESG reporting. While adherence to these standards is often voluntary, some jurisdictions increasingly align their regulations with such international benchmarks.

Voluntary vs. Mandatory:

  • Even in places where ESG reporting isn't strictly mandatory, many companies voluntarily provide ESG or sustainability reports as part of their corporate responsibility initiatives or in response to investor demand. Such voluntary reports might not be submitted to the government but are usually available publicly.

In conclusion, while ESG reporting has gained significant traction and many jurisdictions are moving towards greater transparency.

Reporting

Global Reporting Initiative (GRI):

  • GRI's Sustainability Disclosure Database contains sustainability reports from companies worldwide that use the GRI reporting guidelines. It's one of the most extensive databases of its kind.
  • GRI's Database

CDP (formerly Carbon Disclosure Project):

  • CDP runs a global disclosure system for companies to manage and share their environmental impacts. They hold a vast collection of data on environmental performance, including climate change, water, and deforestation.
  • CDP's Responses

Task Force on Climate-related Financial Disclosures (TCFD):

  • TCFD provides a framework for climate-related financial disclosures. Some companies disclose their reports based on TCFD guidelines. While TCFD itself does not maintain a comprehensive database of these reports, many companies publicly share their TCFD-aligned reports on their websites.

Sustainable Stock Exchanges (SSE) Initiative:

  • The SSE Initiative provides a database that collects information on stock exchanges' sustainability reporting requirements and guidance. While it doesn’t store the reports themselves, it’s a valuable resource to identify where such reporting might be mandatory and how to access the reports on the respective stock exchange platforms.

National Repositories:

  • In countries where ESG reporting is mandated by regulatory bodies, there might be a national database or repository where these reports are collected. For example, in the EU, due to the Non-Financial Reporting Directive, some member states have official portals where these non-financial reports are accessible.

Commercial Platforms:

  • There are also commercial platforms like Bloomberg Terminal, MSCI ESG Manager, and Sustainalytics that aggregate ESG data and reports. Accessing detailed data from these platforms usually requires a subscription.

Company Websites:

  • Many companies archive their annual ESG, sustainability, or corporate responsibility reports in dedicated sections of their websites. This is a primary source for many of the databases mentioned above.

Investment & Asset Management Firms:

  • Some large investment firms that prioritize ESG in their investment strategies might maintain internal databases of ESG reports and metrics for the companies in their portfolios. While these might not be publicly accessible, the firms often release aggregated data or insights based on their analysis.