An online database that examines the environmental, social, and governance reporting requirements for 60 countries might just be the answer to calls for more harmonisation and alignment of ESG reporting. 

The Reporting Exchange is a free online platform run by the World Business Council for Sustainable Development (WBCSD), a CEO-led organization of more than 200 businesses striving toward a sustainable world. The site compiles data in more than 70 sectors and provides comparable information on sustainability reporting requirements and resources.  

Non-financial reporting, which covers ESG disclosures, has been described as “complex and overwhelming” and has evolved rapidly and unevenly over the last several years, overwhelmed by a plethora of regulations, reporting frameworks, processes, avenues, and tools for reporting material and non-material ESG issues. 

Mandatory reporting requirements are, “less in the U.S., around 37 percent, though there are more mandatory provisions in Canada, but here in Europe, and maybe South Africa and Brazil, we are ahead of the curve.”
Rodney Irwin, Managing Director, Redefining Value Program, WBCSD

The Exchange allows users to search, using a variety of functions, country by country, or internationally in the case of United Nations requirements, for every type of reporting provision. For example, if one were to click on South Africa on the world map, the Exchange would provide a summary of the regulatory environment in the country and a link to every reporting provision in place, including links to the actual legislation or guidance and information as to where it is applicable, whether it is mandatory or voluntary, comply or explain, a regulation or a code, and whether conditions apply. Users can further refine searches by region, type of provision, sector, and subject. For a company setting up operations in a new country, it would be hard to imagine a more useful resource for a compliance officer.

The Exchange’s database records even more reporting provisions than requirements—1,788 provisions, of which 957 were mandatory. “Reporting provision” encompasses three reporting types: reporting requirements; reporting resources, which help companies prepare reports; and management resources, which help companies embed ESG into management behaviours.

EU Non-financial Reporting Directive

Large companies (large public-interest companies with more than 500 employees) have to include non-financial statements in their annual reports from 2018 onwards on the policies they implement in relation to:
environmental protection
social responsibility and treatment of employees
respect for human rights
anti-corruption and bribery
diversity on company boards (in terms of age, gender, educational and professional background)
Source: Directive 2014/95/EU


The WBCSD’s report, “ESG Reporting Trends,” which contains information on the Asia-Pacific region, Europe, North America (including Central America), South America, Israel, Kazakhstan, Nigeria, Russia, South Africa, and Turkey identifies a number of other reporting styles beyond mandatory requirements. The first, “comply or explain,” where the market decides whether certain standards are appropriate for individual companies, is still relatively limited in popularity but growing. “From just two reporting provisions at the turn of the millennium,” says the report, “there are now over 30 provisions with this obligation.” Comply or explain first made an appearance in the U.K.’s Corporate Governance Code in 1992, but later was referenced in the OECD/G20 Principles of Corporate Governance and the South African King Code.

Beyond mandatory and comply or explain, the number of voluntary reporting codes for ESG has increased from less than 10 in the early 1990s to 182 today. Four-fifths of these are issued by non-governmental organizations such as CDP, the Global Reporting Initiative (GRI), and the Sustainability Accounting Standards Board (SASB). These provisions are focused on providing information to investors and stakeholders, rather than regulators.

While there have been an increasing number of reporting provisions for ESG disclosures, companies around the world have been moving this data from standalone sustainability reports into mainstream financial reports that they are required to file with regulators and/or exchanges. In the European Union and the United States this has largely been due to EU directives and the Task Force on Climate-Related Financial Disclosures, respectively.

Disclosure channels for ESG reporting

The four main disclosure channels identified during the development of the Reporting Exchange are:
Mainstream report: Annual reporting packages which provide information to existing and prospective investors about the financial position and performance of the organization. They generally contain financial, governance statements and management commentary.
Integrated report: An integrated report explains to financial capital providers how an organization creates value over time. It also seeks to explain how the organization interacts with the external environment to create value over the short, medium and long term.
Sustainability report: A report published by a company or organization about the environmental and social impacts caused by its everyday activities, communicating sustainability performance and impacts.
Specialist system: This allows companies to disclose information through online response systems, questionnaires, or forms and is often directly to an organization or authority requesting the information.
Source: ESG Reporting Trends

Another report from the WBCSD published in February focused on the United States and Canada. According to Rodney Irwin, managing director of the WBCSD’s Redefining Value Program, that report found that mandatory reporting requirements are, “less in the U.S., around 37 percent, though there are more mandatory provisions in Canada.” Irwin added, “But here in Europe, and maybe South Africa and Brazil, we are ahead of the curve.”

Irwin attributed some of this to the forthcoming EU non-financial reporting directive. “Certain jurisdictions within Europe are going further with the way ESG risks are being disclosed,” he noted.

ESG Reporting Trends’ latest analysis shows that there is a total of 411 provisions in 24 countries in Europe and 293 mandatory requirements. By contrast, there are 211 reporting provisions for the United States and, of these, 154 are voluntary provisions. In addition, there has been a slower migration of ESG reporting into mainstream reporting in the United States, though 91 percent of WBCSD member companies in the United States and Canada produce a standalone sustainability report. Earlier research conducted by the WBCSD noted, however, that only around a quarter of companies in the United States and Canada had zero alignment between ESG risk disclosures in their sustainability reports and ESG risk disclosures in their legally required risk reporting in 10-Ks or annual reports. That figure compares to more than a third of companies surveyed worldwide that had zero alignment.

Andrew Beanland, a manager in the WBCSD’s Redefining Value Program, put together a set of data from the Reporting Exchange that compares the regulatory environment in the United Kingdom with that in the United States and/or Canada.

The 38 reporting provisions in the United Kingdom consist of:

12 reporting requirements 

16 reporting resources 

10 management resources

Of the 16 reporting resources, five are guidance documents issued by the Financial Reporting Council (FRC) on issues such as clear and concise reporting, risk management, and the strategic directors report. Other significant resources include guidance from the Department for Environment, Food, and Rural Affairs on environmental reporting guidelines and how to measure and report greenhouse gas emissions. The majority of the 10 management resources are guidance on Environment Agency regulations on waste, water usage, treatment and discharge, and other effluents.

By comparison, there are 10 reporting resources in Canada, most of which are mandatory guidance documents issued by the Toronto Stock Exchange or government divisions. And there are 51management resources in the United States, which are typically voluntary guidance documents and standards.

The United Kingdom has 18 provisions (both mandatory and voluntary) that direct the disclosure of non-financial information (i.e. ESG) toward the mainstream annual report. The main promulgators of these provisions are the FRC and the London Stock Exchange. By comparison, the Securities and Exchange Commission has issued 11 mandatory provisions that bring disclosure of non-financial information into the mainstream report, the 10-K, for U.S. companies. Beyond these provisions, the work of the SASB—which has been a major actor in developing voluntary reporting standards—has issued 65 provisions focused on reporting environmental issues. In the United States, in total there are 97 provisions that request ESG information in the mainstream report. This is a higher figure than any other country covered by the Reporting Exchange platform. Only 13 of these provisions, however, are mandatory, and more than half of the provisions concern environmental matters. The U.S. Environmental Protection Agency is the major actor, responsible for 10 provisions where disclosure is required on issues such as water, waste, and emissions.

The United Kingdom, in contrast, has only seven reporting provisions that concern environmental matters out of a total of 38. “Rather,” says Beanland, “the focus is spread across the ESG spectrum … Such issues as diversity, energy, supply chain, remuneration, role and structure of the board, political contributions, human rights, employment conditions, policies and practices, social impacts/value creation are the subjects that are most common across the U.K. reporting landscape.”

Of these, 11 are mandatory reporting provisions, eight of which require disclosure directly to the authority requesting the information. All other mandatory provisions require disclosures through the mainstream reporting channel. This is a lower proportion of mandatory provisions than is seen in Canada, where there are 38 reporting provisions, but just 29 are mandatory. The vast majority of the provisions, almost three-quarters, ask companies to disclose directly to the authority requesting the information. This suggests a system that is more focused on the regulatory aspect of reporting on ESG issues than that in the United Kingdom, which is more focused on informing investors.