This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.
Query
Please provide an overview of the impact of ESG on anti-corruption behaviour in companies and how anti-corruption is considered in the EU and US.
The rise of ESG (environmental, social and governance) presents opportunities for the anti-corruption movement. With growing investor interest in ESG incorporating anti-corruption efforts into ESG strategies is crucial.
While companies have incentives to adopt ESG, like enhanced reputation and access to capital, challenges exist, such as cost and a lack of standardised frameworks. Despite these hurdles, mandatory reporting frameworks, like the EU's European Sustainability Reporting Standards (ESRS), have emerged, requiring specific disclosures on business conduct and anti-corruption measures.
Within the ESG framework, corporate corruption has wide-ranging consequences. It is not only a key factor in the "G" (governance) component, but its negative effects also ripple out to affect the "S" (social) and "E" (environmental) dimensions.
Contents
- Understanding ESG
- Incentives and disincentives for ESG practices
- Evidence of ESG affecting corruption
- ESG disclosure landscape (EU and US)
- References
Authors
Kaunain Rahman (TI)
Reviewers
Guillaume Nicaise (U4)
Date
13/06/2024
