Debatable Nature of Environmental, Social, and Governance Information: Focusing on Mandatory Disclosures

抄録

Although national and international institutional progress has been made based on the disclosure of environmental, social, and governance (ESG) challenges faced by companies, a better understanding of the concept and nature of ESG information is required for both the companies that prepare the information and stakeholders who use the information because ESG information differs from financial information in terms of its nature and concepts. Moreover, ESG issues are associated with externalities derived from companies’ activities. Therefore, for company managers those issues may not be relevant. Although institutional ESG disclosure systems have developed rapidly, the fundamental issue of accountability tends to be ignored among market stakeholders. This study reviews the concept and nature of ESG, explores empirical cases and recent developments in institutional ESG disclosure systems at national and international levels, and identifies challenges associated with ESG disclosures in light of accountability, which is the most critical factor for achieving substantive ESG disclosures towards sustainability. When adopting institutional ESG information disclosure frameworks and standards, companies must carefully consider how such disclosures can achieve accountability.