Board Responsibility and Sustainability‑Related Disclosure in Asia

1. The Sustainability Disclosure Ecosystem

Abstract

This chapter presents the evolving ecosystem for sustainability-related disclosure. It maps the scope of disclosure across Asian jurisdictions at study. It also analyses assurance frameworks as a credibility lever noting progressive alignment with international assurance standards. Finally, it develops the notion of “sustainability washing” in the corporate disclosure context.

The G20/OECD Principles of Corporate Governance (the G20/OECD Principles) provide guidance to help policy makers evaluate and improve the legal, regulatory and institutional framework for corporate governance, with a view to supporting market confidence and integrity, economic efficiency, sustainable growth and financial stability. They specifically recommend that “the corporate governance framework should provide incentives for companies and their investors to make decisions and manage their risks, in a way that contributes to the sustainability and resilience of the corporation” (OECD, 2023, p. 44[1]).

When developing a corporate governance framework, jurisdictions adopt different approaches regarding its scope and implementation, as well as the assurance and monitoring of disclosed information. These differences raise the question as to how different frameworks and approaches to their implementation and enforcement may impact the likelihood of “sustainability washing” cases as discussed later in this report.

1.1. Scope and Standards for Sustainability-Related Disclosure

As some investors focus on how companies identify, assess, and manage material risks and opportunities related to climate change and broader sustainability issues, many jurisdictions already require, plan to require, or recommend that companies disclose sustainability-related information. Jurisdictions may determine different scopes of sustainability-related disclosures (Section 1.1.1) and how to implement them (Section 1.1.2).

1.1.1. Scope

The G20/OECD Principles emphasise that sustainability disclosures should be consistent, comparable, and reliable. They should include both retrospective and forward-looking information that a reasonable investor would consider material to investment or voting decisions. The G20/OECD Principles define sustainability-related information as material if it can reasonably be expected to influence an investor’s evaluation of a company’s value or affect their investment or voting choices (OECD, 2023, p. 45[1]).

Materiality can be approached from two perspectives: financial (single) materiality and double materiality. Financial materiality focuses on how climate and other sustainability-related risks and opportunities affect a company’s financial performance and position (Grant Thornton, 2023[2]). Double materiality, a concept introduced by the European Union, considers both the financial impact of environmental and social factors on the company and the company's own impact on the environment and society (European Commission, 2019[3]). Under European Union (EU) law, companies exceeding a certain size threshold are now required to report sustainability information using the double materiality concept (EU, 2022[4]).

The G20/OECD Principles note that environmental and social issues should be included within the scope of sustainability disclosures if they can reasonably be expected to influence a company’s value. Examples include environmental liabilities under existing regulations or Greenhouse Gas (GHG) Emissions that could be capped or taxed in the future. However, the assessment of what constitutes material information may evolve over time and will depend on local context, company-specific factors, and regulatory requirements (OECD, 2023[1]).

An important element in implementing sustainability disclosures is defining which companies are subject to the requirements. In some jurisdictions, disclosures are mandated or encouraged only for large publicly listed companies. Others extend the scope to include certain non-listed companies. The criteria used to determine applicability typically involve factors such as the number of employees, the company’s market capitalisation, or total assets.

The scope of sustainability disclosures includes a range of key content areas. These cover metrics related to sustainability goals (e.g. GHG emission reduction targets), climate-related transition plans, value chain information (e.g. human rights concerns within the supply chain), and other material sustainability issues beyond climate, such as biodiversity, human capital, and labour rights.

Across most Asian jurisdictions discussed below, material sustainability issues beyond climate are generally recognised as part of the scope of sustainability-related disclosures. Many of these jurisdictions also include metrics related to a company’s sustainability goals.

Table 1.1. Sustainability-related Disclosure Content Coverage

Jurisdiction	Framework	Sustainability matters	Disclosure of metrics for sustainability-related goals	Transition plan disclosure	Value chain information
China	Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial) Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For Trial Implementation) Continuous Supervisory Guidelines No. 11 for Companies Listed on Beijing Stock Exchange—Sustainability Report (For Trial Implementation) Corporate Sustainability Disclosure Standards—Basic Standards (Trial)	All material sustainability matters	R, C	R, C	R
France	Article L225-102-1 of the Commercial Code (CSRD transposed)	All material sustainability matters	L	L	L
Hong Kong (China)	Main Board: Environmental, Social and Governance Reporting Code GEM Board: Environmental, Social and Governance Reporting Code	All material sustainability matters	R, C	R	R
India	SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015	All material sustainability matters	L	-	L
Indonesia	OJK Regulation Number 51/POJK.03/2017 OJK Regulation Number 29/POJK.04/2016 OJK Circular No 16/SEOJK.04/2021	-	-	-	-
Japan	Cabinet Office Order on Disclosure of Corporate Affairs Japan’s Corporate Governance Code	All material sustainability matters	L	PC	-
Korea	Code of Best Practices for ESG Disclosure Rules on KOSPI Market	All material sustainability matters	PC	PC	PC
Singapore	Mainboard: Sustainability Report | Rulebooks: Listing Rules 711A and 711B Catalist: Sustainability Report | Listing Rules 711A and 711B	All material sustainability matters	R	R	R
Viet Nam	Circular 96 (read with Appendix IV) Decree 47 (provisions for disclosure by SOEs - Form No. 4 in Appendix II)	All material sustainability matters	L	-	-
United Kingdom	FCA’s Climate related Disclosure Regime: UK Listing Rules UKLR 6.6.6(8),UKLR 14.3.24, UKLR 16.3.23 and UKLR 22.2.24 UK Companies Act requirements for companies and for LLPs	Only climate-related matters	L, R	PC	-

Key: PC = public consultation or under active consideration; L = requirement by the law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles, including frameworks set by the regulator or stock exchange following a “comply or explain” approach; “-” = absence of a specific requirement or recommendation.

In the People’s Republic of China (China), the scope of sustainability-related information covers all key elements – metrics for sustainability goals, transition planning, value chain information, and other material sustainability topics beyond climate. China has introduced the draft Corporate Sustainability Disclosure Guidelines – Basic Guidelines (Trial Implementation) (Basic Guidelines) with an aim to standardise corporate sustainability disclosures in China. These standards are based on International Financial Reporting Standards (IFRS) S1 and S2, however, they adopt a double materiality driven framework (Slaughter & May, 2025[5]). Thus, companies would not only be required to evaluate climate impact on company’s operations, but also the impact of the company’s operations on the environment, economy, and society. They are currently applicable on a voluntary basis.

In France, companies must disclose information on sustainability goals, climate transition plans, value chains, and other material non-climate sustainability matters, as required by the EU Corporate Sustainability Reporting Directive (CSRD). The directive has been transposed into French law and is effective since 2024.

In Hong Kong (China), listed issuers are required to disclose certain sustainability metrics on a “comply-or-explain” basis in accordance with the Hong Kong Listing Rules. Effective 1 January 2025, listed issuers are further required to disclose certain climate-related information such as their climate-related metrics and targets, transition plans and effects of climate-related risks and opportunities on value chain pursuant to the ESG Reporting Code under the Hong Kong Listing Rules. These latest climate-related disclosure requirements are developed based on IFRS S2.

In India, disclosures include metrics, value chain information and all material sustainability matters. While the sustainability disclosures framework – Business Responsibility and Sustainability Reporting (BRSR) – does not explicitly mandate disclosure of a transition plan, it has several disclosure requirements that align with requirements under a climate-related transition plan (such as details of environmental and social risks and opportunities for their business, the approach to address them and their financial impact). Further, issuers of ‘transition-labelled debt securities’ are required to disclose transition plans.

In Indonesia, currently, none of the key components mentioned above are covered under the sustainability disclosure framework.

In Japan, the scope was previously limited to metrics and other non-climate sustainability information. Japan broadened its scope following a public consultation initiated by the Sustainability Standards Board of Japan (SSBJ) in 2024 (SSBJ, 2024[6]). In March 2025, the SSBJ adopted its inaugural Sustainability Disclosure Standards, which now also include transition plans (SSBJ, 2025[7]).

In Korea, sustainability disclosures are not currently mandatory. In April 2024, the Korea Sustainability Standards Board (KSSB) released an exposure draft of the Korean Sustainability Disclosure Standards (KSDS) for public consultation. The proposed standards would require disclosures on value chain information, transition planning, and non-climate sustainability matters. However, the KSDS has not yet been formally adopted (IFRS Sustainability, 2025[8]).

In Singapore, the listing rules require the disclosure of metrics for sustainability-related goals, value chain information and disclosure on all material sustainability matters. The listing rules also require listed issuers to start incorporating the climate-related disclosure requirements of the IFRS Sustainability Disclosure Standards from FY2025, which includes disclosure of climate-related transition plans, if any.

In the United Kingdom, metrics for sustainability goals and climate-related matters are subject to disclosure. However, certain entities, such as listed companies, banks, and insurance firms, must also disclose information on employees, social issues, human rights, and anti-corruption and anti-bribery efforts (Sections 414CA and 414 CB of the UK Companies Act, 2006). The UK government consulted on exposure drafts of two UK Sustainability Reporting Standards, from June to September 2025 (GOV.UK, 2025[9]). It is also consulting on the development of an oversight regime for the assurance of sustainability-related financial disclosures, alongside options to take forward climate-related transition plan requirements (GOV.UK, 2025[9]; GOV.UK, 2025[10]).

In Viet Nam, the sustainability disclosures include metrics for sustainability goals, climate-related transition plans, and other non-climate material sustainability matters, such as policies related to employees and responsibility to the local community (Slaughter and May, 2024[11]).

1.1.2. Implementation

In most Asian jurisdictions covered in this report, the disclosure of sustainability-related information is mandated through laws, regulations, or listing rules. While some jurisdictions limit these requirements to listed companies, others extend them to include large non-listed entities as well.

Globally, it is common to implement sustainability reporting obligations through a phased approach, typically based on company size and listing status. Often, the largest listed companies are required to comply first, followed by smaller companies based on market capitalisation. In terms of intended audience, some jurisdictions identify investors, both equity and debt holders, as the primary users of sustainability disclosures, while others adopt a broader approach, recognising multiple stakeholders as the primary users.

Table 1.2. Sustainability-related Standards and Coverage

Jurisdiction	Sustainability-related disclosure	Disclosure standards	Coverage of companies	Phasing in implementation	Primary users of the sustainability-related disclosure
China	R, C	Local	Listed and non-listed companies	2026	Multiple stakeholders
France	L	ESRS	Listed and non-listed companies	-	Multiple stakeholders
Hong Kong (China)	R	Local standards (climate reporting based on IFRS S2)	Listed companies only	2025-2026	Multiple stakeholders
India	L	Local standards (allows inter-operability with other reporting frameworks)	Listed companies only	-	Multiple stakeholders
Indonesia	L	-	Listed and non-listed companies	2019-2025	Multiple stakeholders
Japan	L, C	Local standards (based on TCFD, IFRS Sustainability Standards)	Listed and some non-listed companies	2026	-
Korea	C	-	Listed companies only	2026	-
Singapore	R, L	IFRS Sustainability Standards (for climate reporting)	Listed companies and some non-listed companies	2025 2030	Multiple stakeholders
Viet Nam	L	-	Listed and non-listed companies	-	-
United Kingdom	R, L	TCFD	Listed and non-listed companies	-	-

Source: Sustainability-related disclosures frameworks in the jurisdictions under study, as per Table 1.1.

Key: L = requirement by the law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles, including frameworks set by the regulator or stock exchange following a “comply or explain” approach; “-” = absence of a specific requirement or recommendation.

In China, sustainability disclosures are mandated under stock exchange listing rules and complemented by the Corporate Sustainability Disclosure Standards - Basic Standards (Trial) issued by the Ministry of Finance which operate on a voluntary/trail basis and do not impose binding mandatory disclosure obligations to listed companies. Broader ESG guidelines exist for all types of companies. Listed companies must report based on local standards, with 2025 disclosures due by April 2026 (PWC, 2024[12]). China recognises multiple stakeholders as primary users of sustainability-related information. The Basic Guidelines have been proposed to be put in place in a phased manner by 2030. However, a detailed implementation plan for the Basic Guidelines, which would serve as the key corporate sustainability disclosure standard for companies in China, has not been published.

In Hong Kong (China), the stock exchange requires listed companies to disclose sustainability information pursuant to the Environmental, Social and Governance Reporting Code set out in the Hong Kong Listing Rules. Effective from 1 January 2025, new climate-related disclosure requirements developed based on IFRS S2 are introduced to the Environmental, Social and Governance Reporting Code. Under the new requirements: (i) all listed issuers are required to disclose scope 1 and 2 GHG emissions on a mandatory basis starting from 2025; (ii) all Main Board issuers must report on the new climate-related disclosure requirements (other than disclosure of scope 1 and 2 GHG emissions) on a "comply or explain" basis starting from 2025, and (iii) large-cap issuers are further required to report on all these requirements on a mandatory basis starting from 2026. GEM issuers are encouraged to make climate-related disclosures (other than disclosure of scope 1 and 2 GHG emissions, which is mandatory) voluntarily.

In India, the Securities and Exchange Board of India (SEBI) requires the top 1000 listed companies by market capitalisation to disclose sustainability information under local standards. India recognises multiple stakeholders as primary users of this information.

In Indonesia, a regulation issued by the Financial Services Authority (OJK) mandates sustainability disclosures for both listed and non-listed companies. Indonesia recognises multiple stakeholders as primary users.

In Japan, sustainability disclosures are required by regulation and are recommended under the Corporate Governance Code. The requirement applies to listed and certain large non-listed companies, using local standards aligned with Task Force on Climate-related Financial Disclosures (TCFD) and IFRS Sustainability Standards. From fiscal years beginning April 2025, companies may voluntarily adopt the new SSBJ Standards. From fiscal years beginning April 2026, these standards will become mandatory for companies listed on the Prime Market, with a market capitalisation of JPY 3 trillion or more. From April 2027, this threshold will be decreased to JPY 1 trillion, thus requiring more companies to adopt the SSBJ Standards (FSA, 2024).

In Korea, KOSPI-listed companies with assets over KRW 500 billion must publish a corporate governance report, a requirement that will apply to all KOSPI-listed companies from 2026. The report must state whether the company complies with the Korea Institute of Corporate Governance and Sustainability’s Code of Best Practices – including its sustainability recommendations – and explain any non-compliance. KOSPI represents Korea’s largest companies by market capitalisation. The KSSB is developing local disclosure standards aligned with ISSB, but these remain in draft form. As a result, listed companies currently disclose sustainability information to the Korea Exchange on a voluntary basis, referencing international standards such as ISSB, TCFD, SASB, and GRI (OECD, 2025[13]).

In Singapore, the Singapore Exchange mandates sustainability disclosures for listed companies. All listed companies must disclose Scope 1 and 2 GHG emissions from the financial year commencing on or after 1 January 2025 (FY 2025). Straits Times Index (STI) constituent listed companies will also report other ISSB-based climate-related disclosures (excluding Scope 3 GHG emissions) from FY 2025, with disclosure on Scope 3 GHG emissions commencing from FY 2026. For non-STI constituent listed companies, other ISSB-based climate-related disclosures (excluding Scope 3 GHG emissions) will be mandatory from either FY2028 or FY2030 depending on the company’s market capitalisation; and disclosure of Scope 3 GHG emissions is voluntary (SGX, 2024[14]). For large non-listed companies, ISSB-based climate-related disclosures (including Scope 1 and 2 GHG emissions) will commence from FY 2030; and Scope 3 GHG emissions reporting is voluntary. Singapore recognises multiple stakeholders as primary users.

In Viet Nam, sustainability disclosures are mandated by national laws and regulations, covering both listed and non-listed entities, including state-owned enterprises. Moreover, there are voluntary tools, such as the Vietnam Sustainability Index (VNSI), launched in July 2017. VNSI measures the performance of the top 20 sustainable listed companies on Hochiminh Stock Exchange (HOSE). Constituents are selected from the 100 largest companies on HOSE (SSE, n.d.[15]). While there is no mandatory reporting standard, GRI Standards are promoted by the State Securities Commission (SSC) and the HOSE (SSC, 2016[16]) (Viet Nam News, 2017[17]).

The EU mandates sustainability disclosures for large and listed companies. In 2025, the EU Commission introduced two "Omnibus" packages aimed at making sustainability reporting more efficient. These include measures to enhance accessibility, streamline due diligence, and reinforce the carbon border adjustment mechanism. The proposals are currently under review by the European Council (European Commission, 2025[18]).

In France, the French law mandates sustainability reporting for both listed and non-listed companies, based on European Sustainability Reporting Standards (ESRS) (Article L225-102-1 of the Commercial Code). The primary audience for disclosures is identified as multiple stakeholders.

In the UK, sustainability-related disclosure is required under both legal provisions and listing rules, and must follow the standards set by the TCFD (UK Listing Rules; Companies Act). These requirements apply to listed equity issuers, as well as specific UK-registered companies and limited liability partnerships.

1.2. Assurance of Disclosed Information

As outlined in Principle VI.A.5 of the G20/OECD Principles, having sustainability-related disclosures reviewed by an independent, competent, and qualified attestation service provider strengthens investor confidence in the reported information. It also facilitates comparability of sustainability data across companies. However, the G20/OECD Principles acknowledge that when providing high-quality assurance for all disclosed sustainability information is impractical or too costly, mandatory assurance for key metrics, such as GHG emissions, may be a more feasible alternative.

Table 1.3. Sustainability-related assurance frameworks

Jurisdiction	Framework	Assurance service providers	Application year(s)			Assurance Standard
			Phasing in implementation	Limited assurance	Reasonable assurance
China	-	-	No	-	-	-
France	L	A, S	Yes	2025 – 2028	-	Limited assurance guidelines of the French High Authority for Audit (English version)
Hong Kong (China)	PC	-	-	-	-	-
India	L	A, S, O	Yes	2024 – 2025	2027 – 2028	-
Indonesia	-	-	No	-	-	-
Japan	PC	-	No	-	-	-
Korea	PC	O	No	-	-	-
Singapore	PC	A,S	Yes	2029 - 2032	-	(a) ISSA 5000 or a Singapore standard equivalent to ISSA 5000; (b) ISAE 3000 or SSAE 3000; or (c) Singapore Standard ISO 14064-3
Viet Nam	L	-	-	-	-	-
United Kingdom	PC	-	No	-	-	-

Key: PC = public consultation or under active consideration; L = requirement by the law or regulations; R = requirement by the listing rule; C = recommendation by the codes or principles; "-" = absence of a specific requirement or recommendation; A = statutory auditors; S = sustainability-related assurance service providers with accreditation by a public organisation; O = assurance service providers without any accreditation by a public organisation.

Note: For assurance standards, the international standards in parentheses indicate that the regulator announced the intention to adopt the international standards or develop domestic assurance standards with reference the international standards.

In some Asian jurisdictions, such as China, Indonesia, and Viet Nam, there is currently no formal assurance framework for sustainability-related information disclosure. However, in other jurisdictions, such as Hong Kong (China), India, Japan, Korea, Singapore, and the UK, assurance frameworks are either already established, under public consultation, or actively being considered by policymakers. Additionally, in France, as in other EU countries, assurance of sustainability information disclosure is required by law.

In Hong Kong (China), the government introduced a roadmap for sustainability disclosure in December 2024 (GovHK, 2024[19]). In line with the roadmap, the Hong Kong Institute of Certified Public Accountants (HKICPA) published the local assurance standard, which is fully aligned with ISSA 5000 published by the International Auditing and Assurance Standards Board (IAASB), in March 2025. In October 2025, the HKICPA updated its Code of Ethics for Professional Accountants to incorporate the new ethics standards for sustainability assurance, which is fully aligned with the International Ethics Standards for Sustainability Assurance published by the International Ethics Standards Board for Accountants (IESBA) (HKICPA, 2025[20]). Additionally, the Accounting and Financial Reporting Council (AFRC) plans to release a proposed regulatory framework for sustainability assurance for public consultation in 2025, covering registration of assurance providers, implementation of relevant standards, and the broader regulatory structure (Linklaters, 2025[21]).

In India, the SEBI introduced mandatory assurance requirements in 2023 for listed companies' Business Responsibility and Sustainability Report (BRSR) Core, which provides detailed ESG disclosures. SEBI allows a range of assurance or assessment providers, including statutory auditors, accredited sustainability assurance or assessment service providers, and assurance or assessment service providers without any accreditation by a public organisation, without limiting the role exclusively to chartered accountants. The scope includes GHG emissions and other ESG factors. SEBI has adopted a phased implementation: the top 500 listed companies must obtain assurance or assessment for the 2025–2026 financial year, extending to the top 1 000 companies between 2026–2027. Notably, companies retain the flexibility to choose which assurance standards to apply (SEBI, 2023[22]).

In Japan, policymakers are actively considering the implementation of a mandatory framework for sustainability assurance. In February 2024, a Working Group on the Disclosure and Assurance of Sustainability Information was established in response to a request from the Minister of State for Financial Services. This expert group is tasked with examining the applicability and timing of the SSBJ Standards and exploring appropriate assurance approaches (IFLR, 2025[23]).

1.3. Sustainability Washing

There is a lack of a comprehensive definition that encompasses the primary attributes of ‘Greenwashing’ (Pears, Baines and Williams, 2023[24]). This term has been used to refer to untrue or exaggerated claims by companies, particularly regarding their commitment to the environment (Wrobel and Fishman, 2025[25]). The contours of this term are shaped based on the broad scope of its content and the regulatory prism through which it is viewed. While there is greater understanding of the term ‘greenwashing’ under different legal and regulatory frameworks such as financial regulation, consumer protection, and advertising standards, it is less understood in terms of corporate disclosures.

Greenwashing may have adverse long-term effects on the stock returns of a company engaged in such practices (Leong et al., 2025[26]). It may also erode investors’ trust in the market. As corporate sustainability disclosures have gained momentum globally, it is useful to further analyse the contours of ‘greenwashing’ in the corporate context.

This report refers to ‘greenwashing’ in the context of corporate sustainability disclosures as ‘sustainability washing’ to truly reflect the scope and remit. Three core features are crucial in understanding the remit of ‘sustainability washing’. These are: (i) disinformation; (ii) misinformation; and (iii) sustainability-related claims. Each of these three are discussed as under:

‘Sustainability washing’ refers to companies spreading disinformation or misinformation in their sustainability disclosures or sustainability-related claims.

First, disinformation refers to a company or its officials wilfully misrepresenting or making false disclosures which deceive or are likely to deceive the user of such information. Company officials could either make incorrect disclosures or omit critical information with intent to not present a true and fair picture of their company’s sustainability performance. Most importantly, there are two key constituents which would determine the standard of proof and the object in case of disinformation leading to sustainability washing – the intent and the likelihood to cause deception. Further, any disinformation would still amount to sustainability washing if it is likely to deceive the intended user of the information. Sustainability washing may or may not result in an immediate damage to investors or provide the company engaging in such practices with an unfair or undue advantage. However, such practices undermine investors’ trust and confidence, which is harmful to the integrity of markets. Thus, the requirement is limited to the extent that such disinformation is likely to cause deception and the fact that investors were deceived would only amount to an aggravating factor.

For example, in 2025, if a fossil fuel company proposes an ambitious target of becoming carbon neutral by 2040 while still investing in new fossil fuel assets, this may amount to sustainability washing if the company does not adopt a credible transition plan within a reasonable period. Furthermore, this overly ambitious target may also become an aggravating factor in determining whether there was wilful misrepresentation with the intent to deceive investors. Companies may want to set ambitious targets to positively signal their commitment. However, if such targets are not verifiable, or backed by credible corporate strategies with a reasonable technical basis, and devoid of a feasible action plan, they are likely to fall within the remit of ‘sustainability washing’ or ‘greenwashing’ in particular (Climateworks Centre, 2025[27]).

Second, misinformation comprises instances when the company or its officials make selective, non-credible, or inaccurate disclosures, which deceive or are likely to deceive the user of such information. Misinformation is spread by a company or its officials through including, but not limited to, partial, selective, unclear, unintelligible, vague, oversimplistic, ambiguous or untimely information, and unsubstantiated statements or disclosures. Such misinformation may also be the result of an omission of relevant information or due to actual provision of information. The intent of the wrongdoer will not be a precondition to prove misinformation.

Misinformation may result from the use of uncertain or unclear assumptions regarding a company's sustainability performance. For instance, companies, while referring to certain products or overall operations, may claim that they are ‘carbon neutral’. However, such claim may amount to sustainability washing if the company uses carbon offsets of unproven credibility to mitigate a significant carbon footprint. Such claim may mislead investors and consumers to believe that the company has no environmental impact. Further, meaningfully underestimating GHG emissions (including Scope 3 emissions, as applicable) may also mislead investors, thus amounting to “sustainability washing”.

This distinction between disinformation and misinformation has implications for sanctioning a breach of sustainability disclosures. Disinformation stems from an intent to deceive and, subject to applicable laws in relevant jurisdictions, may result in onerous enforcement sanctions, including criminal liability. Misinformation could be understood to include negligent conduct, or the lack of robustness and appropriateness of due diligence efforts or other required systems and processes at the entity level. Misinformation may be difficult to prove in court, including due to technical difficulties in the content and scope of sustainability disclosures and attribution.

Third, the consideration of sustainability disclosures or sustainability-related claims is significant to determining the scope of the term sustainability washing. Greenwashing, which most often is used in the context of environment-related matters, has been used to refer to two types of disclosure: (i) sustainability disclosure that is typically backward-looking, including, for instance, GHG emissions in the previous financial year; (ii) sustainability-related claims that relate to an objective, which can be quantitative, such as net-zero targets, or more open, such as supporting one of the sustainable development goals. The concept of ‘sustainability washing’ adopted in this report encompasses disinformation and misinformation related to both types of disclosure, including information in sustainability reports that are largely backward-looking but also sustainability-related claims.