Financially material, industry-relevant ESG disclosure levels remain low despite a widespread increase in overall sustainability reporting, according to ESG Book, a sustainability data and technology firm.
Its analysis shows that European companies are ahead of their global counterparts in terms of ESG practices, led by corporations in France with an average ESG performance score of 54.9.
In contrast, US-based companies on average have a score of 50.1, while Japanese companies are on 49.5.
Globally, European corporations also demonstrated the highest levels of overall ESG disclosure, as the reporting landscape is rapidly shaped by emerging regulation including the EU Taxonomy and Corporate Sustainability Reporting Directive (CSRD).
Recent ESG Book analysis revealed that worldwide ESG regulations have increased by 155% over the past decade.
However, despite their overall disclosure showing, European companies fell noticeably short in their reporting of industry-relevant sustainability data.
This is crucial information in that it is more likely to impact the enterprise value of a corporation, and is required by investors and financial institutions for more accurate insights into material areas of sustainability performance.
“We are transitioning from a world of simplistic and opaque ratings to an increasingly more advanced sustainability data landscape, and moving on from the past when a single score would be used to explain how a company is performing on ESG and climate issues,” said Dr. Daniel Klier, chief executive officer of ESG Book.
The firm, which has analysed nearly 10,000 companies globally, launched the ESG performance score, to provides in-depth, real-time insights into material areas of sustainability performance.
