08 December 2020

ESMA: The three (apparent) paradoxes of sustainability reporting and how to address them

I would like to thank the French Ministry of the Economy, Finance and Recovery and, in particular, the Secretary of State for the Social, Inclusive and Responsible Economy for inviting me to speak at today’s important webinar on non-financial information.

I will use my time today to share some brief reflections on what I consider are the three main apparent paradoxes in the area of sustainability reporting.

International but also jurisdiction-specific standards

The first paradox relates to the the need to ensure that reporting standardsare, at the same time, international and jurisdiction-specific.

A little less than a year ago, I gave my first speech on sustainable finance1 in which I emphasised the key role that rigorous and standardised ESG disclosures can play in preventing the risk of greenwashing. Interestingly, it was my first intervention on this topic, but it was also one of the last ones I made in the pre-COVID era.
Since then, remote working arrangements have become the norm in several sectors and this has accelerated the digital transition. The economic downturn has required unprecedented public support measures, highlighting the relevance of the social dimension in the functioning of our economies.

It is too early to say to what extent these aspects will have any transformational effects on the financial and economic system over the long term, but one thing that the pandemic has clearly shown is that international interconnectedness remains a key feature of the functioning of our financial and economic systems, and will be even more so in the post-COVID recovery.

Almost all developed countries face the risk of having to slow down the progress towards the environmental objectives of the Paris agreement, due to the economic consequences of the pandemic.

more at ESMA

© ESMA