Traditional metrics were inadequate to alert investors to the risks corporations and banks were facing on the eve of the financial crisis. Since then, calls have grown louder for greater transparency and a better standard of financial reporting - one that takes into account the full gamut of risk, including environmental, social and governance (ESG) factors. It's clear that nonfinancial issues such as carbon output, ethical supply chains and a wide variety of other sustainability concerns can have real financial consequences. International organizations such as the Global Reporting Initiative and the International Integrated Reporting Committee argue that we need a global reporting framework that integrates ESG factors with financial capital in a standardized way on the balance sheet. Novo Nordisk, American Electric Power and Bovespa, the Brazilian Stock Exchange, already see the value of integrated reporting. What are the next steps for implementing ESG reporting more widely? Can a greater understanding of these risk factors prevent future financial crises?
Executive Vice President, CSR and Sustainability, Edelman
Executive Director, Program Development and Marketing, Milken Institute
Director, Focal Point USA, Global Reporting Initiative