Sustainability and Financial Accounting: a Critical Review on the ESG Dynamics.

This study gives a depiction of what are the general directions taken by international institutions so to tackle the current health emergency and the most pressing environmental issues, such as climate change and COVID-19 (Schaltegger, 2020; Adebayo et al., 2021).The role of companies is crucial under disruptive events, such as a crisis or, more in line with the present time, a pandemic, and the pursue of the shareholder value cannot be the essence and the only objective in doing business anymore, since also ESG (i.e., environmental, social, and governance) dynamics have to be taken in due consideration. Moreover, an adequate and effective corporate governance should lead to higher disclosure quality, which subsequently should help protect the entire planet and ecosystems as well. In this context, the principal role of accounting and corporate reporting activities should be oriented towards making emerge what is and what is not done by companies in their business operations, and the disclosure of financial information is currently deemed inappropriate for pursuing a sustainable growth in the medium and long run (Schaltegger, J Account Org Change 16:613-619, 2020; Kirikkaleli & Adebayo, Sustain Dev 29:583-594, 2020; Tettamanzi, Venturini & Murgolo Wider corporate reporting: La possibile evoluzione della Relazione sulla Gestione Bilancio e Revisione, IPSOA - Wolters Kluwer, Philadelphia, 2021). Thus, the objective of this study is to investigate what international and European institutions have planned to do in order to align corporate objectives with environmental and societal needs in the coming years (Biondi et al., Meditari Account Res 28:889-914, 2020; Songini L et al. Integrated reporting quality and BoD characteristics: an empirical analysis. J Manag Govern, 2021).As of today, our analysis finds that IFRS Foundation (at global level) and EFRAG (at European one) have been taking steps toward the aforementioned issues so to propose disclosure standards more in line with sustainability and environmental needed improvements. In fact, we tried to give a depiction of what are the actual and future strategies that both these institutions are going to put in place: this snapshot will give scientists, engineers, lawyers, and business people an overview of what should be like the corporate world of the near future, from a corporate reporting/accounting perspective (so to better understand what will be expected from companies of all the industries worldwide).
(© 2022. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.)