Policymakers and regulators around the world seek to strengthen the role of sustainability reporting to increase transparency about corporations’ capacity to create value in the face of greater environmental uncertainty. It is expected that disclosure will allow investors to effectively discern environmentally sustainable businesses from those which are not and hold decision-makers accountable for their environmental performance. However, research to date on the effectiveness of sustainability reporting is mixed. Difficulties in valuing green innovation coupled with the largely non-financial nature of sustainability reporting suggest that there is a need to re-think the role of disclosure as an accountability mechanism.
See Elisabeth Sinnewe’s research here.