China’s Ministry of Finance is taking significant steps toward unifying corporate sustainability disclosures. They’ve released a draft guideline with the vision of establishing a nationwide standard by 2030. This move responds to the global focus on Environmental, Social, and Governance (ESG) issues, making enhanced corporate sustainability reporting essential. The guidelines aim to improve companies’ engagement in global trade, enhance international competitiveness, and support China’s institutional opening-up.

The European Council has approved the Corporate Sustainability Due Diligence Directive (CSDDD), overcoming earlier setbacks and revisions to mandate large companies to address their adverse impacts on human rights and the environment within their supply chains. Proposed by the European Commission in 2022, the directive aims to tackle issues like child labor, pollution, and deforestation while aligning businesses with the Paris Agreement's climate goals. Despite initial concerns from member states like Germany and Italy, the revised CSDDD, approved in March, reduces the number of affected companies by raising thresholds and implements a phased approach for compliance, starting with larger corporations in 2027 and extending to others by 2029. Though some provisions, such as financial incentives for climate transition plans, were removed, the directive stands as a significant measure in promoting corporate responsibility and sustainability within the EU.

A recent Harvard Business School article explored the impact of ESG issues on corporate profitability, presenting a framework tracing their evolution to pivotal factors. Using Purdue Pharma as a case study, it highlights increased understanding of ESG materiality, with companies measuring and reporting on ESG data. The framework offers insights for entities balancing financial and societal motivations, stressing the catalyst role of designating ESG issues as "financially material." The authors aim to shift perception towards proactive management of emerging ESG issues in corporate decision-making.