ESG Standards: For international cooperation and European sovereignty

ESG Standards: For international cooperation and European sovereignty

Description

“A proposal to maintain an autonomous European approach to ESG standards, coupled with strong EU involvement in international cooperation for their harmonization.”

ESG Standards: For international cooperation and European sovereignty

In this policy brief by EJD Associate Researcher, Jean-François Pons, ESG (Environment, Social, Governance) standards are highlighted as playing an increasingly important role in the management of companies and their financing given that they direct financial flows towards the most "sustainable" companies. Though the directives on corporate transparency (financial and non-financial) oblige companies to publish indicators in this area in Europe, it is not the case globally.

 This short paper advocates for maintaining the autonomy of an EU approach to ESG standards, mainly owing to the EU’s lead over its international partners, as well as the dissimilar views held by the EU and US concerning such standards. The diversity of ESG standards around the world is both a source of complexity and constraint for companies; EU autonomy should therefore be coupled with strong involvement in international cooperation in order to promote harmonization whenever possible.

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