Environmental, Social and Governance Disclosure: Impacts and Prospects

Abstract

The study is a review of Environmental, Social and Governance (ESG) disclosure practices and its impact on businesses as well as its future prospect. ESG disclosure is the practice of making information about a company’s sustainability performance available to the public. It was also observed that ESG disclosure has some benefits which includes increased transparency and accountability, increased access to capital, and increased reputation for firms. Despite the benefits some challenges exist such as determining the information about ESG that is material, the cost of collecting and disclosing ESG information, green washing, and lack of established framework. The prospects of ESG disclosure include greater reliance on digital technology, broadening the ESG criteria, increase in uniformity of disclosure framework and a holistic approach to net zero. The study concludes that ESG disclosure is an emerging area in accounting which is gaining much attention from investors, regulators and other stakeholder groups.

Keywords: ESG, Green washing, sustainability performance, digital technology