Grants / Projects we are funding

Frank Bold – Alliance for corporate transparency

Grant details

Amount:£100,000

Awarded on:01/08/2018

Duration:12 months

Status:Live

Area of interest

Systems change

Themes covered

Policy-making

Across Europe companies are coming under new regulations to disclose the non-financial impact of their work. A new EU directive will make this mandatory but does not yet specify what or how issues concerning environmental damage, workforce issues or governance matters should be reported. Frank Bold will create an index, benchmarking companies, to increase the pressure for good ESG reporting.

What is the issue?

Corporate reporting on environmental, social and governance (ESG) issues is crucial for creating a sustainable economic and financial system. However, the current framework of corporate ESG disclosure is not fit for purpose. Commencing in 2018 and following the transposition of the EU Non-Financial Reporting Directive, large companies operating in Europe will be required to disclose information on environmental, social and employee, human rights and anti-corruption matters, necessary for understanding the company’s impact on society. However, the potential of this new legislation is undermined by the fact that the reporting requirements stay at the level of principles and do not specify which concrete information companies should disclose. As a result, the quality of companies’ reporting will continue to vary significantly, failing to disclose relevant and material information, thus undermining the ability of investors to properly consider sustainability issues when allocating capital. Furthermore, missing standards ultimately hinder the ability of any legislative initiative to improve corporate accountability and investors’ responsibilities.

What will the project try to achieve?

The challenge lies in defining what companies and financial actors need to disclose to promote long-term sustainable investment and support a transparent corporate governance framework. In order to address this, the Alliance for Corporate Transparency project will:

  • Build a collaboration among leading NGOs in Europe to develop a benchmark that will draw from international standards, leading reporting frameworks, and the concept of planetary boundaries and social foundations to define which specific information companies in different sectors should disclose to allow an understanding of their impact – as required by the law.
  • Provide in-depth research concerning corporate compliance with this benchmark, eventually covering the largest 1,000 companies operating in Europe
  • Promote the results and co-ordinate joint civil society position in the process of development of the legal framework for corporate ESG disclosure and the framework for sustainable finance

Who might be interested in this project?

Investors and companies concerned with social and environmental sustainability and ESG-related risks. Policy makers, standard setters, civil society organisations, and market actors interested in standardisation of corporate ESG disclosure and in building a sustainable finance framework.