Rules and regulations on sustainability are proliferating
Unsustainable companies beware. A net of sustainability is closing in, which over the next few years will become almost impossible to avoid.
The net is made up of statutory obligations, standards, stock-exchange listing requirements, procurement criteria and conditions attached to trade deals. Many strands of the net rely on companies taking voluntary action, but there is an increasing trend towards mandatory requirements. The net is global, and its overall effect is to require companies to be more accountable for their environmental and social impacts. Unsustainable companies are finding it harder to hide.
The emphasis is on getting companies to report more on environmental, social and governance issues. This is based on the premise that “what gets measured gets done”, says Alan McGill, a partner in the Sustainability and Climate Change practice of the financial services firm PwC. The net of sustainability “will get companies to have a better understanding of their impact” as the crucial first step in acting to minimise that impact.
For example, the European Parliament agreed in April to a European Union directive that will require all listed companies with more than 500 employees to disclose information on environmental and social matters, human rights, anti-corruption and bribery. Companies will also...