This chapter presents policy insights to support policymakers and regulators in further aligning market practices with the G20/OECD Principles of Corporate Governance and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. It provides insights on sustainability-related disclosure, the role of third-party assurance in strengthening credibility of disclosures, and opportunities for enhancing interoperability among sustainability-related frameworks to reduce compliance costs and enhance comparability. The chapter provides further insights on ownership in high-emitting companies and innovative ones, the role of boards to adequately consider material sustainability matters, and the adoption of policies on shareholder and stakeholder engagement mechanisms.
Global Corporate Sustainability Report 2025
1. Key policy insights
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Managing companies and allocating capital have always required understanding how environmental, social, and technological trends shape business cash flows. Public policy developments, evolving social preferences, and technological innovation have influenced corporate behaviour and investment decisions since the earliest corporations were established. What is new is the breadth and depth of information now disclosed by companies and investors on the environmental and social aspects of their activities.
Both updated in 2023, the G20/OECD Principles of Corporate Governance (G20/OECD Principles) and the OECD Guidelines for Multinational Enterprises for Responsible Business Conduct (OECD MNE Guidelines) are aligned and complementary. The G20/OECD Principles include a Chapter VI on sustainability and resilience to support companies and their investors to make decisions and manage their risks in a way that contributes to the sustainability and resilience of the corporation. The G20/OECD Principles emphasise that sound governance frameworks, combined with transparent and decision useful sustainability related disclosures, are essential to ensuring fair markets, the efficient allocation of capital, and the long-term growth and resilience of companies. The OECD MNE Guidelines recommend that enterprises conduct due diligence to address responsible business conduct issues and include a chapter (Chapter III) related to corporate disclosure of information on responsible business conduct and due diligence.
This edition of the OECD Global Corporate Sustainability Report provides data driven insights to support policymakers and regulators in advancing these objectives and in implementing the recommendations of the G20/OECD Principles and OECD MNE Guidelines.
1. Sustainability-related disclosure
Over the past two years, sustainability-related disclosure has expanded further, rising from 86% of global market capitalisation in 2022 to 91% in 2024 (Figure 2.1). This reflects continued demand for such information from large companies and investors. However, the absolute number of companies disclosing sustainability information – 12 900 – remains only a moderate share of the 44 152 listed companies worldwide. While this may represent an efficient equilibrium given the potentially disproportionate costs of disclosure for smaller companies, the limited disclosure by state-owned enterprises (SOEs) is noteworthy, given typically heightened expectations regarding their environmental and social impacts. In 2024, 63% of SOEs (95% by market capitalisation) disclosed sustainability-related information.
Across industries, disclosure levels vary significantly. In 2024, coverage by market capitalisation ranged from 78% to 94% (Figure 2.2). The real estate sector has the lowest level of disclosure, with only 78% of market capitalisation reporting sustainability information. Disclosure in the sector is particularly weak for scope 1 and 2 GHG emissions (74%, Figure 2.4) and at least one category of scope 3 emissions (55%, Figure 2.6). Considering the real estate sector’s exposure to climate-related physical risks and its high emissions intensity linked to the use of cement and steel, these low levels of disclosure are notable. Standard setters and policymakers may therefore consider whether additional sector-specific guidance, or capacity building measures, could strengthen sustainability reporting in the real estate sector – particularly in Emerging Asia and the Middle East and Africa, where disclosure rates are the lowest.
Commercial data providers have sought to fill investor demand for emissions data, particularly on smaller companies and scope 3 emissions. In 2024, 11 135 companies representing 88% of global market capitalisation disclosed scope 1 and 2 emissions, while estimates are available for 16 000 companies covering 95% of market capitalisation (Figure 2.3) The gap is even more striking for scope 3 emissions: 7 712 companies (76% of market capitalisation) disclosed at least one category, but estimates extend coverage to nearly 15 900 companies, or 94% of market capitalisation (Figure 2.5). These estimates, while useful, cannot fully substitute for high-quality disclosure. Even the most sophisticated estimation models often rely on industry and location averages, which may not capture company-specific innovations or operational efficiencies that investors seek when allocating capital in the expectation of a transition to a low-carbon economy.
2. Third-party assurance
As recognised in Sub-principle VI.A.5 of the G20/OECD Principles, “[s]ustainability-related disclosures reviewed by an independent, competent and qualified attestation service provider may enhance investors’ confidence in the information disclosed and the possibility to compare sustainability-related information between companies.” Between 2022 and 2024, assurance practices expanded, with coverage increasing from 66% of global market capitalisation to 81% (Figure 2.7). Assurance is common even in jurisdictions where it is not required or recommended, such as the People’s Republic of China (hereafter “China”) (19% of companies, 51% of market capitalisation) and the United States (39% and 83%).
Limited assurance remains considerably more widespread (56%) than reasonable assurance (17%) (Figure 2.8). In this context, the adoption of the International Standard on Sustainability Assurance (ISSA) 5000, finalised in November 2024, is timely. Its adoption by many jurisdictions could strengthen confidence in sustainability reporting and ensure a common understanding of what “limited” and “reasonable” assurance mean across jurisdictions, including in Emerging Asia where “reasonable” assurance is more commonly cited.
Two other developments may require attention by policymakers and regulators. First, among companies that provide assurance of their scope 1 and 2 emissions, just under 15% provide reasonable assurance (Figure 2.9). Given that climate change is a financially material risk for most listed companies (Figure 2.17), and that scope 1 and 2 emissions are relatively straightforward to measure, policymakers may wish to consider encouraging reasonable assurance for companies that disclose scope 1 and 2 emissions. This would be in line with sub-Principle VI.A.5, which states says that “[…] greater convergence of the level of assurance between financial statements and sustainability-related disclosures should be the long-term goal.” Second, contrary to other regions, many European companies hire the same firm both for auditing financial statements and sustainability assurance (Figure 2.11). Regulators in Europe may, therefore, wish to monitor whether boards, audit committees or shareholders adequately oversee this practice in order to prevent potential conflicts of interest and safeguard the credibility of sustainability disclosures.
3. Sustainability-related disclosure standards
In 2023, two new sets of standards were introduced: the IFRS S1 and S2, developed by the International Sustainability Standards Board (ISSB), and the European Sustainability Reporting Standards (ESRS). Globally, 582 companies use the International Sustainability Standards Board (ISSB) standards, either stating a partial alignment, or asserting compliance, still well below the number of companies using the TCFD recommendations (4 857) or SASB Standards (3 497), which provided the foundations for the ISSB’s standard-setting work (Figure 2.12). The use of ESRS remains limited, reflecting their recent adoption in July 2023. Under the recently revised Corporate Sustainability Reporting Directive (CSRD), large, listed companies are applying ESRS for the first time in 2025, with other companies to phase them in from 2028 onwards. At least 1 800 EU-listed companies are expected to fall under ESRS requirements starting in 2025.
Taken together, these developments mean that the global disclosure landscape is expected to converge around three standards in the short term: the GRI Standards, used by over 6 500 companies; ISSB standards, potentially to be implemented by around 5 000 companies if issuers focused on financial materiality-only choose these standards; and ESRS, applying to approximately 2 000 companies by end‑2025. Strengthening interoperability among these three frameworks may be critical to reducing compliance costs for companies operating across jurisdictions and to enhancing the comparability, reliability, and decision usefulness of sustainability‑related information.
4. The rights of shareholders and institutional investors
An analysis of the 100 listed companies with the highest disclosed GHG emissions yields two key insights (see Figure 2.19 for company characteristics).
First, institutional investors hold the largest equity share in these high-emitting firms, accounting for 36% overall, with double the share in the United States (Figure 2.20). This underscores the importance of corporate governance frameworks in enabling and supporting effective shareholder engagement, as highlighted in Principle III.A of the G20/OECD Principles. However, investor engagement may be less effective in markets where most high-emitting companies are characterised by a dominant controlling shareholder, such as in Emerging Asia, Latin America, and the Middle East and Africa. By contrast, in Japan, the ownership of the 5 largest shareholders in many high-emitting companies’ is limited, but the 20 largest shareholders hold on average 42% of the shares (Figure 2.21).
Second, the public sector is a significant shareholder in high-emitting companies in many emerging markets (Figure 2.20). Public ownership among the top-100 emitting companies is particularly high in China (51%), other Emerging Asian markets (51%), Latin America (47%), and the Middle East and Africa (41%). Most top-100 emitting companies in these regions are state-owned, highlighting the role SOEs can play in leading by example on sustainability and shaping outcomes for a low-carbon transition in emerging economies.
While the adoption of existing green technologies by high-emitting companies is essential for the transition to a low-carbon economy, the development of new technologies may also be required to ensure a successful transition while safeguarding living standards and energy security. An analysis of the 100 listed companies with the largest number of green patents provides two additional insights (see Figure 2.23 for company characteristics).
First, “other free-float” investors hold the largest share of equity in these highly innovative firms (40%), compared to just 31% in the group of highest emitters (Figure 2.24). This suggests that individual investors may be inclined to allocate capital to innovative companies with strong green R&D performance. A policy implication may be that the democratisation of finance – where individuals invest directly in securities – could not only enhance individual investors’ returns by reducing intermediation costs, but also channel greater capital towards companies developing green technologies.
Second, institutional investors hold a 37% stake in these highly innovative companies, almost the same as their 36% share in the highest emitters. This may indicate that, despite public commitments to support the low-carbon transition, institutional investors’ portfolio allocations have not differentiated between high emitting companies and those investing in new green technologies. As such, investor led engagement initiatives targeting high emitters, such as Climate Action 100+, may need to be complemented by new initiatives that also consider investment allocation and stewardship efforts towards highly innovative companies.
5. The board of directors
Principle VI.C of the G20/OECD Principles recommends that “the corporate governance framework should ensure that boards adequately consider material sustainability risks and opportunities when fulfilling their key functions.” Importantly, such considerations should be pursued in the best interest of the company and its shareholders, taking into account the interests of stakeholders, as set out in Principle V.A. Assessing whether boards are fulfilling these responsibilities necessarily requires a case-by-case evaluation. In 2024, companies representing 70% of global market capitalisation reported that their board of directors oversees climate-related issues (Figure 2.27, Panel A). This is an increase from 53% in 2022 and surpasses the share of companies – representing 65% of market capitalisation – for which climate change is considered a financially material risk (Figure 2.17). This is a notable development, underscoring the growing recognition by boards of directors of climate change as a core financial and strategic matter.
6. The interests of stakeholders and shareholder engagement
Globally, more than 9 600 companies – representing 86% of market capitalisation – disclosed policies on shareholder engagement in 2024 (Figure 2.30). These typically set out how shareholders can question the board or management, or table proposals at shareholder meetings. This is 1 000 more companies than in 2022. While the disclosure of such policies does not by itself guarantee effective engagement, it signals a willingness by companies to facilitate dialogue with shareholders – particularly where disclosure is not mandated by regulation. This trend is therefore a positive indicator of progress towards the implementation of Principle VI.B of the G20/OECD Principles, which encourages “dialogue between a company, its shareholders and stakeholders to exchange views on sustainability matters as relevant for the company’s business strategy.”
Principle VI.D of the G20/OECD Principles further recommends that “the corporate governance framework should consider the rights, roles and interests of stakeholders.” To promote value-creating co-operation with employees in particular, companies may establish mechanisms for participation, such as workers’ councils or employee representation on boards. These mechanisms between companies and their employees may be particularly relevant for the two-thirds of employees of listed companies who are neither represented in trade unions nor covered by collective bargaining agreements (Figure 2.32). In 2024, companies representing 11% of global market capitalisation had employee representatives on their board of directors (Figure 2.31). Regional differences are significant: 59% of market capitalisation in China, 39% in Europe, and 9% in Latin America, compared with negligible levels in other regions. Relative to 2022, board-level employee representation has remained stable in Europe (10%) and Latin America (below 1%), but increased in China, rising from 26% to 28%.
Corporate disclosure on employee turnover may serve as a useful proxy for assessing employee satisfaction and the extent to which companies may be willing to invest in company-specific human capital. In 2024, more than 8 400 companies – representing 60% of global market capitalisation – reported employee turnover data (Figure 2.33). This was complemented by disclosures from more than 7 350 companies, representing 57% of market capitalisation, on the average number of hours of employee training per year (Figure 2.34). The prevalence of these disclosures likely reflects the fact that 68% of global market capitalisation is concentrated in companies for which human capital risks are considered financially material (Figure 2.17).
7. Disclosure of human rights information
Disclosure of human rights information lags significantly behind overall disclosure of sustainability information. For instance, companies representing 26% of global market capitalisation report on salient human rights impacts identified in their operations and supply chains, much lower than the 91% that disclosed sustainability-related information in 2024. The most widely disclosed human rights-related information is the existence of corporate policies and commitments on human rights (81% of market capitalisation) and key human rights issues such as child and forced labour (approximately 85% of market capitalisation). The disclosure of human rights information is strongly and positively correlated with companies’ market capitalisation, as reflected in disclosure rates being about ten times higher when measured by market capitalisation compared to the number of companies across all indicators. Disclosure is also significantly higher in certain regions, including in Europe and the United States.
The perception that human rights is not widely considered a financially material risk can in part explain such findings. As identified in Figure 2.18, human rights-related issues are considered material financial risks by companies representing 13% of market capitalisation and rank as a material topic in only 6 out of 77 industries (compared with 50% and 33 industries respectively for energy management). At the same time, the lack of quantitative indicators and frameworks to measure human rights performance can hinder companies’ ability to meaningfully report on their human rights practices.
The comparatively lower level of financial materiality for human rights risks implies that legislation is an important driver of companies’ human rights practices. Reporting the existence of policies on forced and child labour, for instance, is highly prevalent in geographies that have adopted forced labour legislation. In the United States and Europe where such laws exist, between 89-95% of listed companies (by market capitalisation) report having a forced or child labour policy or commitment.
8. The energy sector’s climate-related disclosure
The energy sector – encompassing the oil, gas, coal and electric power industries – is both a pivotal driver of clean energy deployment and the single largest source of greenhouse gas emissions, accounting for almost a third of total emissions disclosed by listed companies (Figure 3.1, Panel A). For capital markets to function efficiently, investors need a clear understanding of individual energy companies’ preparedness for alternative pathways towards a low-carbon economy. Significantly, the energy sector has the highest sustainability-related disclosure rate of any industry, with companies representing 94% of market capitalisation reporting sustainability information in 2024 (Figure 2.2).
Disclosure of scope 1 and 2 GHG emissions is relatively high in the energy sector, covering 90% of market capitalisation. However, scope 3 disclosure remains limited, particularly in Emerging Asia and the Middle East and Africa, where fewer than half of companies by market capitalisation report such data (Figure 3.2). Where scope 3 emissions are reported, disclosure is concentrated among large companies, which only rarely set reduction targets for this scope – and, when they do, interim targets are often limited (Figure 3.6).
This raises an important policy question for capital market regulators, environmental and energy authorities, and investors: should energy companies be further incentivised or required to disclose comprehensive scope 3 information and adopt targets covering these emissions? The issue is particularly relevant given that state-owned enterprises (SOEs) account for 32% of the sector’s disclosed emissions, yet appear to underreport scope 3 emissions compared to other companies (Figure 3.4).
Energy companies have greater control over their scope 1 and 2 emissions, which arise from direct operations and purchased energy. By contrast, setting targets for scope 3 emissions – largely linked to the use of products sold – has proven challenging. Such targets may have limited direct impact on demand or global emissions if only adopted by listed companies. This helps explain why many companies in the sector have placed greater emphasis on the disclosure of scope 1 and 2 emissions. Still, scope 3 emissions dwarf the operational footprint of energy companies and may therefore be too significant to be overlooked.
9. The energy sector’s impact
One area where energy companies’ commitment to addressing GHG emissions can be tested is lobbying. Sub-principle VI.C.1 of the G20/OECD Principles of Corporate Governance recommends that “boards should ensure that companies’ lobbying activities are coherent with their sustainability-related goals and targets”. Globally, 7% of listed energy companies disclose their climate policy positions and 15% report their business association memberships, with large companies disclosing average lobbying expenditures of USD 3.5 million (Figure 3.9). These figures reveal shareholders’ limited accessibility to relevant information to hold boards accountable for overseeing lobbying activities. However, regional practices vary widely: Europe and the United States lead among advanced economies, and Latin America among emerging markets, while other regions have more room for improvement.
Disclosure of environmental R&D and CapEx remains limited. Globally, only 2.5% of listed energy companies report environmental R&D, with regional figures ranging from 7.3% in Latin America to just 1.3% in the Developed Asia-Pacific excl. US (Figure 3.11). Similarly, only 7% of energy companies disclose environmental CapEx (Figure 3.13). Where large companies do report, their allocation of 43% of CapEx to low‑carbon assets may suggest expectations of a gradual transition to a low-carbon economy. However, these disclosures are not aligned with a harmonised classification system, such as a taxonomy for sustainable activities, but rely instead on company-specific definitions, limiting comparability.
Another challenge lies in the capacity and willingness of energy companies to sustain CapEx and R&D – green or otherwise – given competing priorities. Between 2015 and 2024, the net cash flow of listed energy companies from operating activities increased by 32%, enabling them to triple dividend payments and share repurchases, while net cash used in investing activities grew by less than 5% (Figure 3.15). Total R&D expenses quadrupled from 2015 to 2023, signalling efforts to innovate, but declined in 2024, falling by 14% compared to 2023.
Findings from the analysis of 42 double materiality assessments undertaken by energy companies under the first reporting cycle of the EU’s Corporate Sustainability Reporting Directive (CSRD) highlight consistent gaps between the assessment of material negative impacts and material financial risks across most sustainability topics. For instance, 86% of companies identified material impacts related to biodiversity and ecosystems, while only 36% associated the topic with material financial risks to the company. Similar gaps were found for water, pollution and social issues associated with workers in the value chain. This may suggest that companies in the sector often lack financial incentives to mitigate some significant sustainability impacts, particularly for key environmental and social topics.
Policymakers may consider market-based or policy approaches that effectively price and assess the cost of adverse impacts and thereby strengthen incentives for corporate action. Additional research across other sectors would be critical to assess whether similar patterns persist across sectors and geographies, and to design effective policy responses that account for any such differences.