Published by: Harvard Law School

New regulations expected to be adopted in 2023 will result in exponential growth in the amount of ESG, i.e., sustainability, data generated by reporting companies and available to investors. The US SEC is expected to adopt final rules requiring detailed disclosure by companies of climate-related risks and opportunities by the end of 2023. In November 2021, the IFRS Foundation—which administers the IFRS financial accounting standards that are used in most jurisdictions other than the United States—announced the formation of the ISSB to develop a comprehensive global baseline of sustainability disclosure standards. Taken together, the consolidation of the ESG disclosure ecosystem, the continued enhancement and standardisation of ESG data, and the analyses it promises to yield, should enable market participants to more precisely evaluate when ESG factors are relevant to the creation of long-term value, which in turn can facilitate more confident ESG investment decisions.

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