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15 - Disclosure Regulation and Sustainability

from Part III - Integrating Sustainability in Financial Markets Regulation

Published online by Cambridge University Press:  30 January 2025

By
Kern Alexander  and
Aline Darbellay
Edited by
Kern Alexander ,
Matteo Gargantini  and
Michele Siri
Kern Alexander
Affiliation:
University of Zurich
Matteo Gargantini
Affiliation:
University of Genoa
Michele Siri
Affiliation:
University of Genoa
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Summary

The chapter analyses disclosure obligations of environmental and social sustainability risks that apply to companies in light of the growing importance to disclose sustainability risks. In doing so, it discusses the potential cross-border strategies for countries to develop international standards to support global convergence. It considers the international developments justifying the rationale for sustainability-related disclosures along with a discussion of the three models of cross-border disclosure regulation: (i) the home state approach, (ii) the host state approach and (iii) the equivalence approach. The chapter argues that the EU Corporate Sustainability Reporting Directive (CSRD) (2022) has adopted a mix-and-match model between the host state approach and the equivalence approach. Our analysis emphasises the extraterritoriality of EU sustainability disclosure regulation and compares it with the models followed by the United Kingdom, the United States and Switzerland. The different sustainability disclosure requirements between EU countries and non-EU countries suggests, therefore, that cross-border regulatory coordination is important. The paper recommends a model of ESG disclosure for capital markets that is based on the EU policy of equivalence modified by a recognition of the compliance approaches of certain foreign jurisdictions.

Keywords

ESG disclosure regulation in the EUESG disclosure regulation in the USESG disclosure regulation in Switzerlandinternational standards for ESG disclosure regulationcross-border coordination of sustainability disclosure standardshome-state rules approachhost-state rules approachextraterritorial application of laws
Type
Chapter
Information
The Cambridge Handbook of EU Sustainable Finance
Regulation, Supervision and Governance
 , pp. 407 - 430
Publisher: Cambridge University Press
Print publication year: 2025

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