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Corporate ESG integration is becoming less optional every day, driven by increasing regulation, investor demand and the recent embrace of stakeholder capitalism. Headline announcements—like GM’s 2035 target for manufacturing only electric vehicles and the U.S. government’s goal to replace its entire fleet with electric cars and trucks—do not tell the whole story.

The new EU Taxonomy Regulation, 2020 O.J. (L 198) 13, mandates what financial market participants and operating companies must address if they wish to make claims of taxonomy compliance, with a scheme largely focused on disclosure, standardized subtopics within ESG, and alignment of practices with claims. Meanwhile, the global movement toward a uniform reporting framework remains uncertain despite the December 2020 merger of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC), and recent powerful endorsements of standards published by the Task Force on Climate-Related Financial Disclosures (TCFD) and the Global Reporting Initiative (GRI). In particular, the U.K. has announced its plans to adopt its own taxonomy and disclosure regulations, albeit also based on recommendations of the TCFD and the EU Taxonomy Regulation. In the United States, the SEC continues to prioritize prosecuting unsupported ESG claims, while also promising to update its 2010 guidance to provide a more coherent framework for ESG disclosures.

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