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16 Va. L. & Bus. Rev. 423 (2021-2022)
Toward Enhanced Corporate Sustainability Disclosure: Making ESG Reporting Serve Investor Needs

handle is hein.journals/valbr16 and id is 437 raw text is: VIRGINIA LAW & BUSINESS REVIEW
VOLUME 16                      SUMMER 2022                        NUMBER 3
TOWARD ENHANCED CORPORATE
SUSTAINABILITY DISCLOSURE: MAKING ESG
REPORTING SERVE INVESTOR NEEDS
Dan Estyt and Todd Corttt
ABSTRACT
Interest in metrics that track corporate sustainabiity performance has
nsen dramatically in recent years. Driven in part by sustainability-
minded investors who want to better align theirporfolios with their values
and in part by corporations that seek to show how they have folded afocus
on sustainabiity into their business models, the growth of corporate
Environmental, Social, and Governance (ESG) reporting has become a
topic offocus and concern in the finance world. Notably, in the absence of
nidey appl cable and consistent ESG  reporting requirements, those
aspiring to make sustainable investments face a dizjying array of
corporate ESG disclosures as well as sustainabiity metrics produced by
third-par y data firms. And they have come to recognize that the available
ESG data are both incomplete and inconsistent-and sometimes even
outright misleading. With the demand for firmer foundations for
sustainable investing in mind, this article maps the ESG terrain-laying
out the critical issues, highlighting the shortcomings of existing ESG
reporting, and identifying what investors want in the way of sustainabiity
data. Building on this analysis and a survey undertaken by the Yale
Initiative on Sustainable Finance, the Article concludes with a set of
recommendationsfor improved corporate ESG metrics and methodologies.
t   Hillhouse Professor of Environmental Law and Policy, Yale University; Co-Director, Yale
Initiative on Sustainable Finance.
tt Lecturer in Sustainability, Yale School of Management; Co-Director, Yale Initiative on
Sustainable Finance.
Copyright © 2022 Virginia Law & Business Review Association

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