Effective anti-corruption: the key to sustainable ESG practices

Corruption poses a significant threat to economies, democratic processes and societal trust. It can also undermine ESG initiatives by distorting competition and nurturing unethical behaviour. The Corporate Sustainability Reporting Directive ("CSRD") mandates transparency in ESG practices, including anti-corruption measures. This includes reporting on measures implemented to prevent, detect and respond to allegations of corruption, as well as the number of incidents that occurred. Ideally, forcing organisations to become more transparent about (the effect of) their anti-corruption efforts, their overall approach improves. After all, continuing a half-hearted approach is more difficult when Europe is watching. While ESG reporting aims to promote ethical behaviour, it may also incentivise corruption if not responsibly managed. Corruption or other irregularities may arise in situations where interests are high and decision-making lies with a selected group of individ...

Verder in dit artikel:

1. Introduction

2. (Anti-) corruption, the main component of ESG?

2.1. The underdog in sustainable business practices

2.2. The ESG Paradox: When good scores drive bad practices

3. Transparency, transparency, transparency: setting a new reporting standard

3.1. The Corporate Sustainability Reporting Directive

3.2. ESRS G1 – Business Conduct

4. A jungle of paper tigers

4.1. How paper tigers are created

4.2. Seven traits of effective anti-corruption programmes

5. Key takeaways