Contents

Contents
Foreword 6

Executive summary 8

History and Future of Carrots & Sticks 11

What’s new in Carrots & Sticks 2023 14

• Figure 1. Example policy page from Carrots & Sticks 16

Introduction 17

• Figure 2. Growth of C&S coverage: 2006–2023 18

� Figure 3. Number of policies per country  19

How has policy coverage Increased over time? 20

� Figure 4. Growth of ESG & Sustainability Policy over time 20

� Figure 5. Growth of ESG & sustainability policy across world regions 21

Who issues ESG & sustainability policies? 22

� Figure 6. Leading issuers of ESG & sustainability policy type 23

� Figure 7. Issuer type by world region 24

What’s in the ESG & sustainability policies? 25

Mandatory versus voluntary policy 26

� Figure 8. Comparing mandatory and voluntary policies 26

� Table 2. Change in mandatory and voluntary policies over time 27

Policy restrictiveness and restrictions on business 27

� Table 3. Sample dictionary terms 27

� Table 4. Measuring restrictiveness and restrictions on business 28

� Figure 9. Policy Restrictiveness 29

� Figure 10. Restrictions on business 30

Focus on Sustainable Development Goals 30

� Figure 11. Proportion of ESG & sustainability policies mentioning the SDGs: 2015–2022 31

� Figure 12. Focus on Sustainable Development Goals 32

� Figure 13. Top 3 SDG priorities by world region 33

� Figure 14. SDG focus over time 33

Focus on business sectors 34

� Figure 15. Business activities targeted by ESG & sustainability policy 34

� Figure 16. Top five targeted business sectors (%) over time 1990-2022 35
 Focus on Environmental, Social, Governance 36

� Figure 17. E, S and G focus over time: 1990–2022 36

� Figure 18. Top five ESG topics over time 1990–2022 37

Focus on the GRI Standards 38

� Figure 19. GRI mentions in ESG & sustainability policy over time 38

� Figure 20. GRI mentions in ESG & sustainability policy over time by region 39

� GRI’s modular system of standards 40

� Table 5. GRI Standards 40

� Table 6. GRI – ESRS Topic Mapping 41

� Figure 21. Relative focus on GRI Standards 43

� Figure 22. Top five GRI Standards over time 44

� Figure 23. GRI Standards by the top seven targeted business sectors 45

Conclusion 46

About the Project Partners 48

� Global Reporting Initiative 48

� King’s College London  48

� University of Edinburgh 48

� University of Stellenbosch Business School 48

Disclaimer 50

Authors and Acknowledgements 52

� Lead authors 53

� Acknowledgements 53

� How to cite this report 53

Appendix 54

� Table A1. Country-level policies by world region 55

� Table A2. Policies by international organizations 57

� Table 3A. Policies by regional organizations 59

� Measuring policy “restrictiveness” 59

� Figure 1A. Distribution and coding of ‘restrictiveness’ 60

� Figure 2A. Distribution and coding of ‘restrictions on business’ 60

� Table 4A. List of NAICS business sectors 61

Foreword
Foreword Covid-19, climate change, and ongoing conflicts have
continued to put corporate transparency and supply
chain impacts at centre stage. There are growing
demands for transparency on impacts of companies
as well as for accountability for negative impacts on
the economy, the environment and people.

Governments wanting to drive a positive agenda This update has come at a critical time as we are only
towards a more just and sustainable society have seven years away from reaching the 2030 Agenda for
used legislative tools to change corporate behaviour Sustainable Development and unfortunately progress
and market conditions. The last few years have seen is not keeping pace with the original ambitions. The
significant developments in the regulatory landscape, broadened scope of the database brings a wider picture
with the human rights impacts of climate change and of the current policy landscape, highlighting both growth
environmental degradation gaining recognition at and gaps.
the international, regional and national level, as well
as growing demands for transparent information on We truly hope that the expanded C&S will act as a source
companies’ tax payments and practices. of inspiration for policy makers and private sector actors
around the world. As GRI we will continue to support
That is why we believe that the continuing expansion quality sustainability policy and disclosure standards to
of Carrots & Sticks (C&S) makes a useful contribution support those policies.
to the efforts of governments, companies, investors,
researchers, and other stakeholders. However, the Peter Paul van de Wijs
increasing number and variety of policies can also pose Chief Policy Officer, Global Reporting Initiative (GRI)
challenges for organizations and other stakeholders.
Alignment and harmonization must be a key goal for
governments, market regulators, stock exchanges,
industry associations, standard setters and all those
responsible for developing reporting instruments and
sustainability policies. The 2021 update to GRI’s Universal
Standards embed human rights due diligence reporting,
and reflect the expectations for sustainability impacts set
out in authoritative international instruments, such as
the United Nations Guiding Principles on Business and
Human Rights (UNGPs) and the OECD Guidelines for
Multi National Enterprises.

In April 2023, the partners of C&S expanded to include

the University of Edinburgh and King’s College London
as part of the development of the database, joining the
Global Reporting Initiative (GRI), Stellenbosch University,
and the UN Environment Programme (UNEP). These
updates include an online repository with the original
policies available in PDF and Word formats, with English
translation also available.

We are therefore excited by the updated database and

the publication of this new edition. This update would
not have been possible without our new C&S partners:
King’s College London and the University of Edinburgh.
We also thank our existing project partners, Stellenbosch
University Business School and UNEP. GRI would like
to thank the Government of Sweden for their financial
support to this work.

7
Executive
Summary
Executive Summary The 2023 edition of the Carrots & Sticks (C&S)
annual report presents a comprehensive assessment
of environmental, social and governance (ESG) &
sustainability policy worldwide.

This report highlights the expanding nature of ESG & to which ESG & sustainability policies shape the
sustainability policies since 2020, underscoring their actions and behaviours of those actors targeted
increasing importance to a growing number and range by these policies. Notably, a small fraction (less
of actors, including national governments, business than 20%) of policies exhibits high or very high
and industry bodies, financial regulators, international levels of restrictiveness or restrictions on business.
organizations, NGOs, regional organizations, research Most policies (approximately 75%) fall into the low
institutes and stock exchanges. This report provides restrictiveness category, which suggests limited
valuable insights into the landscape of ESG & power of enforcement. However, when comparing
sustainability policymaking through its analysis of over disclosure requirements to other ESG & sustainability
2,463 policies from 132 countries, 76 international and policies, disclosure policies consistently show a two
regional organizations, in 38 languages, from 1897 to the to three times higher likelihood of being classified
present day. as high or very high in terms of restrictiveness or
restrictions on business. This suggests that disclosure
Headline results policies are most likely to compel action. Comparing
these findings to those outlined above, we can
conclude that even when policies are mandatory,
Using state-of-the-art advancements in natural language they tend to provide few specific (or granular) details
processing (NLP) and machine learning (ML), the C&S regarding which actions and behaviours are required,
2023 annual report employs data-driven approaches permitted or prohibited.
to effectively convert policy documents into precise,
measurable, and data-enriched outputs. Through these • We see an increasing number of policies invoking
techniques, we extracted valuable information from each the SDGs. However, this is most prominent at the
policy in the database. Our analysis covers different policy level of the goals, as specific mentions of one or
attributes, including mandatory versus voluntary policies, more of the 17 SDGs remain scarce. When specific
policy restrictiveness, thematic analyses focusing on the SDGs are mentioned, a few tend to dominate: SDG 8:
Sustainable Development Goals (SDGs), the ESG focus of Decent work and economic growth receives the most
policies, targeted business activities, and the use of the explicit mentions, followed by SDG 12: Responsible
GRI Standards. Several findings stand out. consumption and production and SDG 3: Good health
and well-being. As expected in the 2020 report, the
• A central interest regarding ESG & sustainability rise in prominence of SDG 3 may be linked to the
policy is to what extent these policies have teeth Covid-19 pandemic. Conversely, SDG 9: Industry
(e.g., an ability to compel action). Consistent with innovation and infrastructure has the fewest explicit
previous versions of our report, C&S 2023 continues references in the analysed policies.
to code each policy in terms of it being ‘mandatory’ • Which types of businesses operating in which
or ‘voluntary’. We find that the majority of ESG & sectors are targeted by ESG & sustainability policies?
sustainability policies are voluntary, constituting According to our analysis of policy content in terms
55.2% of all policies, while mandatory policies make of the North American Industry Classification
up the remaining 44.8%. However, 2015, with System (NAICS), we find that the most targeted
the introduction of the SDGs, marks an inflection business sector is ‘management of companies’, with
point for ESG & sustainability policy. Prior to 2015, 2,165 policies addressing this area. ‘Management of
most policies were mandatory (52%) and 48% were companies’ encompasses a wide range of activities
voluntary. However, after 2015, there was a reversal related to the governance and oversight of companies,
in this trend, with 36% mandatory policies and 63% including strategic planning, decision-making, and
voluntary. holding securities. NAICS considers management of
• Assessing policy restrictiveness and restrictions companies—which we conceive of as a horizontal
on business is crucial for understanding the extent rather than vertical sector type—a sector in its own

9
 right. Our reading is that the extent to which this business strategy, ethics, integrity, governance,
horizontal category is most targeted may be capturing management approach, reporting practices and
firm size and multinational activities. With respect to stakeholder engagement. This is followed by two
firm size, policies often target firms above a certain environment-related standards, namely GRI 305:
size. In the UK, for instance, the Companies Act Emissions (13.5%), which includes references to
2006 targets large and medium-sized companies, key issues regarding greenhouse gases and ozone-
and the UK Corporate Governance Code 2018 depleting substances, and GRI 303: Water and
applies to premium listed companies. The next most Effluents (8.1%)’, which includes issues regarding water
targeted sector is ‘finance and insurance,’ with 1,979 supplies, water costs, and water discharge impacts.
policies focusing on banking, fund management,
insurance, and the financial market infrastructure. The Collectively, this report reveals the dominance of
prevalence of ‘finance and insurance’ in policies can government entities as policy issuers, the prevalence
be attributed to the high number of stock exchanges, of voluntary (over mandatory) policies, punctuated by
financial regulators, and ministries of finance among a steep rise in voluntary policies since the SDGs were
the top policy issuers in the C&S database. launched in 2015, and the generally low restrictiveness
and restrictions on business activities in most policies
• Our analysis of the relative focus of policies in terms
(suggesting a lack of granularity in policymaking). By
of environmental (‘E’), social (‘S’), and governance
delving into the focus on SDGs, business sectors, ESG
(‘G’) themes reveals a clear dominance of E focus over
focus, and the adoption of GRI Standards, this report
time, followed by an S focus and then a G focus. At a
offers valuable insights for stakeholders seeking to
more granular level, E-focused policies tend to refer
understand how the evolving ESG & sustainability policy
to issues regarding climate change, energy, waste
environment affects their businesses and policymaking
and water. G-focused policies refer to audit, internal
activities.
control, and risk management, whereas S-focused
policies centre largely on one term, ‘compensation’.
If additional analysis and features of C&S would be of
• A new feature of C&S 2023 is our analysis of interest to you and your organization, please do get in
references to the GRI Standards. Our results show touch with the team. Our aim is for this database, and the
a strong upward trend over time, especially in the annual reports, to be a valuable resource.
last decade, of ESG & sustainability policymaking
references to GRI Standards. Despite some variability, Dr Adam William Chalmers, University of Edinburgh
this same trend can be observed across six major
Dr Robyn Klingler-Vidra, King’s College London
world regions. Our analysis also looks at specific GRI
Standards. Here we find that the most dominant
standard is GRI 2: General Disclosures (40.2%), which
covers the organizational profile of businesses,

10
History and
Future of Carrots
and Sticks
History and Future of Over the last two decades, the notion of carrots and
sticks has made for good debate. For example, the pros
Carrots & Sticks and cons of voluntary versus mandatory approaches,
following a comprehensive or selective menu of
disclosure items, the evolution of the ESG agenda and
finding improved ways of getting from words to action.

But what really determines the growth in reporting to being mainstreamed and of high interest to business
requirements? What drives the broader increase in management. As issues mature and more organizations
corporate sustainability initiatives as captured in experiment with ways of managing them, the regulator
our expanded database? In the past, commentators steps in and decides there is sufficient public consensus
speculated about suggested waves of awareness that for the matter to be regulated. New regulation can also
appeared to peak around, among other things, key UN be crucial for establishing new markets, including the
earth summits of the last five decades. Looking at the disclosure of reliable information.
impressive overview of our latest report, the following five
factors can be identified:
Scientific evidence.
Historical events. The first Intergovernmental Panel on Climate Change
(IPCC) report of 1990 predicted that we would reach
Think of the impact of major disaster or crisis events. An global warming of 1.1 degrees Celsius above pre-industrial
example is the Exxon Valdez disaster of 1989, when an oil levels before 2030. The latest assessment report from the
tanker ran aground off the coast of Alaska and spilled 11 IPCC in 2023 signalled that we have reached that level.
million gallons of oil. One result of this was the creation The climate debate has illustrated the complexities of
of the Valdez Principles, led by a responsible investor consensus around a systemic issue reaching action at the
group called Ceres. With the principles came the idea pace required. On a smaller scale, the Covid experience of
that participant companies produce annual environmental 2020–2022 illustrated the same. A new consensus about
reports. In the following decade, Ceres became a founding what is relevant and timely is emerging. One consequence
member of GRI, which has a multi-stakeholder process to of Covid has been a new understanding of work and
develop standards for sustainability impact reporting. employee well-being, which again translates into new
expectations today for reporting on human capital.
Consumer-citizen awareness.
Technological developments.
Mention has often been made of waves of consumer
awareness of a sustainability agenda. In the 1980s, Consider technological and related professional
images of a hole in the ozone layer made a significant development. The disclosure debate has grown from
contribution to consumer environmental awareness, issues-based reporting to comprehensive sustainability
especially in those countries most exposed to its reporting and experimental forms of integration. Today,
effects. The arrival of the internet economy only new capabilities of the data revolution have taken
expanded the ability of consumer-citizens to ask critical the scale of information processed and integrated in
questions and raise their views on the social impacts of innovative ways to a scale never seen before. While
developments, such as regional or global financial crises. some debate the merits of an expanded annual report
New generations have new expectations with regards to with sustainability-related financial disclosures, others
transparency, while struggling with information overload. believe the idea of a ‘report’ loses relevance in the digital
world. New possibilities of data analytics and quantifying
Evolution of issues. qualitative information open new expectations about
what, how and where to report.
Materiality analyses over the years have shown how C&S 2023 is an illustration of applying new technological
issues emerge as new, often poorly understood, and capabilities, including NLP. The report provides an
complex. Think artificial intelligence or cryptocurrencies. impressive overview of an evolving sustainability
Over time, such issues move across materiality agenda, including its link with country-level SDGs. Our
matrices, from being of high interest to stakeholders new technological assessment capabilities offer many

12
opportunities, including trends in materiality, reference to
topics included in the GRI Standards, industries covered,
and governmental or non-governmental institutions
taking the lead. Whether it is carrots or sticks, we will be
paying close attention.

Dr Cornis Van der Lugt

Senior Lecturer Extraordinaire
Stellenbosch University Business School

13
What’s new in
Carrots & Sticks
2023
What’s new in Carrots C&S has undergone a significant overhaul since the
2020 edition. This transformation has been fuelled by
& Sticks 2023 the addition of two new academic partners: Dr Adam
William Chalmers (University of Edinburgh) and Dr
Robyn Klingler-Vidra (King’s College London).

The thrust of our efforts has been to expand the breadth of ESG &
sustainability policies included in the database and to maintain high
standards of methodological rigour underscoring the conceptualization
Explanation
and coding of ESG & sustainability policies. The C&S 2023 annual A disclosure requirement is a legal or
report introduces several new features that enhance the database’s regulatory obligation for a company to
offerings. provide information about its environmental
and social performance. This information
First, we expanded the coverage of the C&S database by taking a can include data on the company’s
broader approach to conceptualizing ESG & sustainability policy. ESG environmental impact, its labour practices,
its charitable giving, and its commitment to
& sustainability policy refers to a set of rules and regulations created
diversity and inclusion.
by governments, regulators, international bodies, multi-stakeholder
initiatives, professional bodies, or industry associations to encourage As before, the domain of coverage pertains
or require companies to adopt sustainable and ethical business to ‘corporate responsibility’, ‘corporate
practices. Importantly, this includes disclosure requirements¹, and C&S social responsibility’, ‘ESG’, ‘materiality’
will remain the pre-eminent global database for disclosure-focused (financial and double), ‘shared value’, ‘social
policies. In addition, C&S now also includes the broader suite of ESG & value’, and ‘sustainability’. C&S continues
sustainability policy initiatives, including guidelines and legislation.² to exclude traditional, core notions of
corporate governance. The thematic
distinction between ESG & sustainability
Second, C&S has new documentation and analysis features. The
policy and wider corporate governance
collection of documents for each policy now offers users the ability is consistent with the emphasis on ESG
to access and download the actual (PDF and Word) documents & sustainability underpinning the GRI
pertaining to each policy included in the database. What is more, all Standards. The practices and principles
policy documents are available in their original language as well as in of corporate governance often constitute
an English translation. This provides a reliable resource for individuals arenas of overlap with ESG & sustainability,
seeking geographically and linguistically comprehensive information on but not all control and operations issues
ESG & sustainability policies. Notable in C&S 2023 is the remarkable are necessarily about ESG & sustainability.
diversity of languages covered. C&S now has ESG & sustainability Similarly, ESG & sustainability may also
have more externally oriented attributes
policies in no fewer than 38 distinct languages, ranging from Arabic to
than what can be internally-focused core
Kirghiz, and from Korean to Ukrainian.³ Figure 1, shows a typical policy corporate governance mechanisms. The
page from the C&S website. This is a good example of how C&S now distinction between disclosure policy and
includes information in the original policy language as well as high- other forms of ESG & sustainability policy
quality English translations. is maintained throughout this report and
facilitates analysis and comparison. The C&S
Third, new tools and methodologies allow users to analyse the website enables filtering by the two policy
contents and characteristics of policies in the C&S database. types to the same end.
Leveraging advancements in artificial intelligence and computer
For topic modelling we use a variation of
science, NLP and ML methods are used to convert the text within
Latent Dirichlet Allocation (LDA), a statistical
policy documents into data. This data-driven approach to text analysis model used to discover topics within a
enables us to extract novel insights from each policy document with a collection of documents. It assumes that
high level of accuracy and nuance. For example, we use topic modelling⁴ each document is a mixture of various
to accurately categorise policies according to their focus on specific topics, and each topic is a distribution
SDGs. We use the same method to ascertain which industries are of words. LDA helps identify themes in
targeted in each policy. Another example of the new analysis tools is text data, making it easier to analyse and
the scoring of the relative restrictiveness of each policy. This offers a categorise documents.
new layer of understanding of the difference between mandatory and
voluntary policies, or those that are required by law versus those that 3 Please see the Appendix for a complete list of
merely encourage businesses to adopt sustainability practices. languages.

15
16
Introduction
Introduction
The first C&S report, published in 2006, analysed trends based on a data set comprising 60 5 These disclosures
policies (the only reporting policies at the time) from 19 different countries. Each subsequent policies come from
C&S report saw a marked increase in the size of the database. The analysis underpinning this a smaller number
C&S 2023 report is based on the data set’s 2,463 policies from 133 countries, 44 international of unique issuers:
62 countries,
and 17 regional organizations. Among the policy documents, 1,225 (or 49.7%) are disclosure
eight international
policies.⁵ Figure 2 illustrates these trends and includes the latest figures. organizations and four
regional organizations.

In terms of coverage, the C&S 2023 database marks a four-fold increase in the number of
policies since the last C&S report in 2020 and a 41-fold increase in the number of policies
included in 2006. This growth is driven by the wider conceptualization of ESG & sustainability
policies, beyond the primarily disclosure-focused policies. It also represents much expanded
geographic coverage, to the tune of a seven-fold increase in the number of countries where
policies are included in the database. While previous versions of C&S saw their own impressive
increases in the size and scope of the database, the increase in coverage in 2023 is the most
comprehensive yet.

18
Table 1 details the year-on-year increase in the number of countries and policies now in the 6 This entailed input
C&S database. A full breakdown of the number of policies by countries, international and from numerous
regional organizations can be found in the Appendix. research assistants
who helped by hand-
coding and using
The increase in the number of policies in the C&S database in 2023 is the result of a few
web-scraping methods
significant factors. First, rather than including primarily national government policy, coverage to gather information
now makes a more systematic effort to include policies at multiple levels of governance. C&S from other relevant
now includes policies issued by international actors, such as the United Nations and GRI, and platforms, including
regional organisations, such as the European Union, alongside national governments. Second, European Corporate
the coverage increase was boosted as part of a concerted data collection effort to add more Governance Institute
policies from a larger number of countries and over a longer time period.⁶ C&S now covers (ECGI), Principles for
policies implemented by countries located in every major world region. The distribution of Responsible Investment
policies by country is illustrated in Figure 3 below. (PRI), and Sustainable
Stock Exchange
Initiative (SSE), the
Reporting Exchange
and the Green Policy
Platform.

19
How has policy coverage first century of our data set (1897–1990)
constitute a mere 5% of the total policies
7 Importantly, 41
policies have multiple
increased over time? recorded. This small number of policies makes issuers. These are
also accounted for in
comparison over time difficult and may skew
our database and our
The expanded C&S database enables further statistical results. Second, the early 1990s act
analysis.
analysis of policy trends over time. Figure as a natural starting point for analysis, as it
4 visually depicts the annual creation of roughly corresponds with several major world 8 Business and industry
new policies (based on year of publication), events, including the establishment of the bodies are multi-
distinguishing between disclosure policies United Nations Environmental Programme stakeholder groups
and other ESG & sustainability policies Finance Initiative (UNEP FI) (1992), the Rio that include public
(represented by blue and green bars, Earth Summit (1992), the United Nations authorities.
respectively). The figure also represents the Framework Convention on Climate Change
cumulative growth of policies published (UNFCCC) international environmental treaty,
over time (see green trend line). While the adopted at the Rio Earth Summit (1994), and
C&S database goes back to 1897, we only the Inaugural Global Roundtable on the topic
graphed policies starting in 1990. We do so of greening financial markets (1994). There
here, and elsewhere in this report, for two was a surge in disclosure and other ESG &
reasons. First, policies issued during the sustainability policies issued starting around

20
2000, reaching a peak in 2018 and then (62 policies, 2.5%) and Africa (148 policies,
slowly declining thereafter. 6%) are relative laggards. North America
(180 policies, 7.3%) and South America (234
How does this growth in ESG & sustainability policies, 9.5%) show relatively slower policy
policy vary globally? Do we see differences growth trends. What is consistent across all
across major world regions? The results are world regions is the observation that ESG
illustrated in Figure 5 below. The most active & sustainability policy growth is a relatively
policy issuers are located in Europe (776 recent phenomenon of the last two decades,
policies, 31.5%), followed by Asia Pacific (556 starting in the 1990s for most regions, or the
policies, 22.5%). Countries in the Middle East mid-2000s for the Middle East.

21
Who issues ESG
& sustainability
policies?
Who issues ESG & sustainability policies? 7 Importantly, 41
policies have multiple
issuers. These are
ESG & sustainability policies are issued by myriad types of governance actors. Building also accounted for in
on previous versions of C&S, we hand coded each policy issuer according to one of the our database and our
following nine categories: (1) central bank, (2) financial regulator, (3) government, (4) business analysis.
and industry body, (5) international organization, (6) NGO, (7) regional organization, (8)
research institute and (9) stock exchange. The results are presented in Figure 6.7 The most 8 Business and industry
prevalent issuer type, by a sizeable margin, is government (47%), which includes, for example, bodies are multi-
stakeholder groups
government agencies, authorities, executives, legislative bodies, and ministries. This is followed
that include public
by international organizations at 17%, business and industry bodies at 11%,⁸ stock exchanges authorities.
at 9%, financial regulators at 7%, regional organizations at 3%, central banks at 2%, and NGOs
and research institutions both with less than 2%.

This finding that governments are the most active issuers of ESG & sustainability policy
appears to be a universal one, as each of the world’s major regions has government as the most
active issuer. This is visualized in Figure 7 on the following page. The most significant presence
of ‘business and industry bodies’ – the second most active issuer type – is in North America.
Stock exchanges play a particularly active role in Asia Pacific and the Middle East.

Importantly, there is rich variation encompassed within these nine ‘issuer’ type categories. The
governmental category alone includes cabinet offices, consultative committees, ministries of
energy, environment, business, finance and regulatory agencies, and other authorities. This
multitude of organisation types contributes to the diverse landscape of ESG & sustainability
policy.

23
24
What’s in
the ESG &
sustainability
policies?
What’s in the ESG Analysis of the content and characteristics of ESG
policies includes a consideration of (1) mandatory
& sustainability versus voluntary policies and (2) policy restrictiveness
policies? and restrictions on business activities.

We also present thematic analyses regarding (1) policies’ policy voluntary (as in the case of many blueprints, codes
focus on the SDGs, (2) their ESG focus, (3) which and guidelines)? Continuing the approach developed by
business activities and industries are targeted in ESG earlier C&S reports, each policy has been hand coded in
and sustainability policy and (4) references to the GRI terms of it being either mandatory (i.e., businesses are
Standards. required to abide by some set of prescribed activities,
actions or behaviours) or voluntary (i.e., businesses are
Mandatory versus voluntary policy not required to abide by some set of activities, actions
or behaviours). Figure 8 below compares mandatory and
voluntary policies over time, distinguishing between
A central interest regarding ESG & sustainability policy disclosure policies and other ESG & sustainability policies.
is to what extent it has teeth. In other words, are Across all policies and years covered in C&S (from 1897 to
businesses legally required to comply with the policy 2022), there are slightly more voluntary policies (55.2%)
(as is the case with many laws and regulations) or is the than mandatory policies (44.8%). This is different from

26
the 2020 version of C&S report which indicated more (1) restrictiveness and (2) restrictions on business. These
mandatory policies compared to voluntary policies. This two measures are related but different. Both analyse the
difference is mainly a function of our expanded data language of the text in each policy.
collection efforts and, albeit to a much smaller extent,
the inclusion of both disclosure and other ESG and 1. ‘Restrictiveness’ looks at the language of ‘enforcement’
sustainability policies. and ‘deterrence’ (i.e., mandatory policy) versus
‘recommendation’ and ‘suggestion’ (voluntary policy).
However, there appears to be an important inflection This granular analysis of the language used offers
point around 2015 with the introduction of the UN SDGs. a precise picture of the extent to which a policy is
As shown in Table 2, in the pre-2015 period, 52% of all legally binding.
ESG & sustainability policies were mandatory, while 48% 2. ‘Restrictions on business’ looks at how this same
were voluntary. In the post-2015 period, this change language of restrictiveness applies directly to
was such that only 36% were mandatory and 63% were businesses and business actors.

In both methods, we employed a dictionary

approach using a bespoke dictionary of
restriction terms and then measured the
relative prevalence of these terms in each
policy document. These bespoke dictionaries
contain hundreds of related words, with
nuanced permutations and cognate terms.
For example, for ‘restrictions on business’, the
term ‘business must’ is also measured using
‘companies must’, ‘firms must’, ‘corporations
must’, ‘enterprises must’, ‘employers must’,
‘directors must’ and ‘managers must’, to give
just a few examples. While the complete
dictionary is available on the C&S website,
Table 3 gives a small sample of these terms to
help clarify the methodology.

Using these bespoke lists of terms, we

calculated exact restrictiveness and restrictions
voluntary. This marks a 16% reduction in the number on business scores for each policy in the C&S database.
of ESG & sustainability policies that are mandatory and In basic terms, the higher the score, the greater the
a concurrent 20% increase in the number of voluntary level of restrictiveness (e.g., the more teeth). To make
policies. our results more intuitive, we recoded these scores into
several categories. We took the average (i.e., mean)
Policy restrictiveness and score as a starting point and then used the standard
deviation to measure equal increments from the mean.
restrictions on business There are fewer increments for restrictions on business
and hence there are only four categories compared to the
In addition to hand coding policies according to the five categories for restrictiveness. A detailed overview is
mandatory and voluntary categories, we use two new provided in the Appendix.
methods (NLP and ML) to examine the ‘teeth’ of policies:

27
Table 4 provides an overview of these scores and related A few results stand out. First, a small share of policies can
categories. be coded high or very high in terms of restrictiveness or
restrictions on business. These constitute less than 20%
Trends in restrictiveness and restrictions on business over of the total data set. It is far more common for policies to
time are presented in Figures 9 and 10. The stacked bars be coded in the low category. They constitute about 75%
show a count of the total number of policies issued each of the entire data set. At the same time, there is a rather
year that fall into the various restrictiveness categories. significant difference when comparing disclosure policies
The grey line shows the average restrictiveness score per to all other ESG & sustainability policies.
year for that policy year. The left side of the figures shows
results for disclosure policies, and, on the right side, we Restrictiveness or restrictions on business disclosure policies
see results for all other ESG & sustainability policies. are two to three times more likely to be coded as high or
very high compared to all other policies.

How can we make sense of these findings considering In 2018, there was a noticeable increase in the occurrence
mandatory versus voluntary policy trends discussed in of ‘very high’ levels of restrictions on business. This spike
the previous section? While there are, especially after can be attributed primarily to the publication of a series of
2015, more voluntary policies issued than mandatory Sustainability Accounting Standards Board (SASB) policies
ones, there is still a sizeable portion of mandatory policies during that year. Many of these policies consistently
(36%) issued since 2015. Is there a relationship between received high scores in terms of their expression of
mandatory policies and more restrictiveness or, equally, restrictions on business activities and actors. These
voluntary policies and less restrictiveness? Empirically, policy documents are structured around long lists
there is a moderate correlation between restrictiveness about what entities ‘must’ and ‘shall’ disclose, calculate,
and mandatory policy (r =.53) and a weak correlation include, perform, or otherwise undertake. However, it is
between restrictions on business and mandatory policy important to note that the results are not solely driven
(r =.25). In bald terms, mandatory policies are not by SASB standards. Several government-issued policies
necessarily more restrictive. What this means is that even written in the same year also stand out for their stringent
when policies are mandatory, they tend to provide few restrictions on business. Notable examples include the
specific details (i.e., granularity) regarding which actions corporate governance codes of Bahrain and Bangladesh
and behaviours are required, permitted, or prohibited. and China’s ‘Corporate Sustainability Compact for the
There is ‘tough talk’ in mandatory policies, but it is not Textile and Apparel Industry’. These codes are among the
specific to companies’ actions. top 2% of the entire dataset in terms of restrictions on
business.

28
29
Focus on Sustainable Development mentioning the terms ‘SDG’ or ‘Sustainable Development
Goals’, but not specific SDGs, like SDG 1: No poverty or
Goals SDG 1) from 2015 to 2022. Nearly 13% of policies issued
in 2015 mentioned the SDGs. By 2021, this proportion
Since their inception in 2015 the Sustainable increased by a factor of four, where nearly 52% (over half)
Development Goals (SDGs) have shaped the ESG & of all policies issued in that year mentioned the SDGs.
sustainability policy space. As illustrated in Figure 11,
we see a steady increase in policy engagement with the Figure 11 shows that the SDGs are an important
SDGs over time. More specifically, Figure 11 shows the reference point in ESG & sustainability policy. Which
proportion of policies mentioning the SDGs (i.e., policies specific SDGs are the main point of focus and how has

30
this changed over time? Importantly, only 13.3% (or 151 Finally, we examine the changing trends in how ESG &
policies) of all the policies in our database issued since sustainability policies focus on specific SDGs over time.
2015 explicitly mention a specific SDG by name. Of these, Figure 14 plots these results. In this case, we include the
11% are counted as mandatory policies, whereas 89% are top five SDGs for each year between 2015 and 2022.
voluntary. Figure 12 compares the SDGs for all policies in Each bar represents the total proportion (%) of policies
our database, disaggregating disclosure requirements and each year mentioning that specific SDG. Goals at the
all other policies. The most frequently mentioned SDG is top of the chart have a greater proportion than those
SDG 8: Decent work and economic growth. This is followed at the bottom. A few trends stand out. First, SDG 13:
by SDG 12: Responsible consumption and production and Climate action has risen in prominence, moving from just
then SDG 3: Good health and well-being. In contrast, SDG 7% in 2015 to nearly 14% in 2022, taking on the mantle
9: Industry innovation and infrastructure has the fewest as the most prominent SDG in the database. Next, we
explicit mentions. can see that two SDGs, namely SDG 8: Decent work and
economic growth and SDG 12: Responsible consumption and
We next examine the SDG focus across the six major production have remained consistently prominent over
world regions. There is a striking degree of variability in this eight-year period. Finally, SDG 17: Partnerships for the
these findings (see Figure 13). SDGs 8, 12 and 3 are still goals only appears in the top five once, in 2017, with 6%.
prominent. SDG 8: Decent work and economic growth is the Despite increasing calls for international cooperation from
most prominent SDG in three of the six world regions: the likes of COP and other multi-stakeholder initiatives
Asia Pacific, Europe and South America. In the Middle and gatherings, it seems that the partnership-focused goal
East, SDG 5: Gender equality is the most prioritised SDG. has gained little purchase in ESG & sustainability policies.
In North America, the most prioritised SDG is SDG 2:
Zero hunger.

31
32
33
Focus on business sectors and least, in policies. The results compare disclosure
requirements with other ESG & sustainability policies.
A chief purpose of many ESG & sustainability policies is Critically, single policies can target more than one
to shape or in some way inform the activities of business business sector. One of the main advantages of our topic
and business actors. Which specific business sectors modelling approach is that we can assess the degree to
are targeted by these policies and how has this changed which individual policies target multiple business sectors.
over time? While there are various ways to classify
business sectors, we use the North American Industry Turning to our results, we can see that ‘management
Classification System (NAICS). This is a widely used of companies’, which is targeted in 18% policies (9.5%
classification system and corresponds with other existing for disclosure requirements and 8.7% for other ESG &
systems, such as the United Nation’s ISIC typology, the sustainability policies) is the most targeted business
European Union’s Nomenclature of Economic Activities sector. ‘Management of companies’ has a cross-sector
(NACE) typology, and the Global Industry Classification rather than an industry vertical flavour, as it includes
Standards (GICS) (see the Appendix for the 18 general holding companies and subsidiaries. Our reading is that
NAICS business sector categories and their descriptions). this may be capturing firm size and multinational activities
like supply chain management and other cross-national
Employing topic modelling techniques, we use operations – such as policies that target firms above a
descriptions of NAICS business sectors to generate a certain size. The second most prominent sector is finance
bespoke dictionary of keywords for each business sector. and insurance, which is targeted in 16.5% of policies.
This provided prompts that we use in the automated The NAICS ‘finance and insurance’ category includes the
classification of each policy in our database. Figure activities of banks, fund management activities, insurance
15 below shows the results for which NAICS sectors and reinsurance, as well as the broader range of firms
(i.e., specific business activities) are targeted the most, operating as part of the financial market infrastructure.

34
In this case, the relative prevalence of finance reflects the most targeted business sector for the period 1990–1995
sheer number of stock exchanges and financial regulators, but dropped to third and even fourth place in later time
not to mention ministries of finance, which count among periods. ‘Mining, quarrying, oil and gas extraction’ ranked
the top issuers in the C&S database (see Figure 6). as the third most targeted business sector overall in the
2001–2005 period. The other sectors breaking into the
Next, we assess how ESG & sustainability policy targets top five at some point between 1990 and 2022 include
different business sectors over time. In this case, we ‘professional, scientific & technical services’, coming to
report the top five most prevalent business sectors prominence in the 2006–2010 period, ‘transportation
(calculated as the overall proportion of each sector) for the & warehousing’, taking fourth place in 1990–1995 and
years 1990 to 2022, looking at five-year time increments. 1996–2000 but then falling out of the top five, and ‘public
The results, presented in Figure 16, underscore our earlier administration’, which was in fifth place in the 2001–2005
results, showing the prevalence over time of ‘management time period.
of companies’ and ‘finance and insurance’. Given that there
are 18 unique sectors, there is a good deal of stability
in those sectors targeted by ESG & sustainability policy
over time. In addition to ‘management of companies’
and ‘finance and insurance’, ‘manufacturing’ and ‘mining,
quarrying, oil and gas extraction’ remain in the top five
SDGs over all five time periods. ‘Manufacturing’ was the

35
Focus on Environmental, Social, or Governance
We next turn to an analysis that disaggregates ESG into its constituent parts. Using topic
modelling, we can categorize policies by their relative environmental (‘E’), social (‘S’),
and governance (‘G’) focus. Importantly, a single policy can focus on E, S and G priorities
simultaneously, and, in practice, most policies do (only 421 or 17% of the policies in our
database do not have an E, S or G focus). Our analysis measures the proportion of E, S or G
focus per policy and, Figure 17, presents these trends over time. A complete list of the ESG
terms used in this analysis can be found on the C&S website.

Our analysis shows the relative dominance of E-focused policies from 1990 to 2022. At its
high point, E-focused policies comprised more than 80% in the mid-1990s. Its low point, by
contrast, occurred between 2003 and 2009 when the E focus declined to as low as 37%.
Comparing S focus and G focus, we can see that there is a greater relative G focus from 1990
to 2022, reaching a high of 41% in 2003. G focused policies include many broadly applicable
activities and themes, like business strategy and stakeholder engagement, as well as ethics and
integrity. The sizeable increase in G focus may be understood as a policy response to both the
Enron scandal of 2001 and the WorldCom scandal in the following year. While C&S captures
policies that can be seen as direct legislation responses to these scandals (most significantly
the Sarbanes-Oxley Act of 2002), it is also likely that it captures a large number of new policies
focused on re-evaluating corporate governance practices and improved whistle-blower
protections in the mid-2000s.

36
E, S and G are broad categories comprising a large number of more specific topics. To drill
down into ESG categories, we examine the most prominent ESG topics for the years 1990 to
2022, looking at five-year time increments. Figure 18 presents the results. For each period, we
calculate the overall proportion of each ESG term.

Overall, there are four E terms in the top five (climate change, energy, environment, waste
and water), three G terms (audit, internal control and risk management), and only one S term
(compensation). Only ‘environment’ is ranked in the top five across all time periods. Other
consistently highly ranked terms include ‘audit’, ‘water’, ‘risk management’, and ‘compensation’,
these four terms appear in four of six time periods. It is noteworthy that ‘climate change’
appears in just one time period, 2016–2022.

37
Focus on the GRI Standards
The GRI Standards enable any organization – large or references to GRI Standards, we see a strong upward
small, private or public – to understand and report on trend over time, especially in the last decade. Disclosure
their impacts on the economy, environment and people policies tend to mention GRI Standards more frequently
in a comparable and credible way, thereby increasing than other ESG & sustainability policies. This trend is
transparency on their contribution to sustainable consistent across the period.
development. The standards are developed through
an inclusive international multi-stakeholder process, We next examine general GRI mentions across six major
delivering an inclusive picture of an organization’s material world regions. The results are presented in Figure 20.
topics, their related impacts, and how they are managed. Europe (1,230 mentions across 89 policies) and Asia
By employing the GRI Standards, companies can facilitate Pacific (1,207 mentions across 85 policies) stand out as
performance comparisons with peers and enable investors having the most mentions. It is also in these world regions
and other stakeholders to make well-informed decisions. that we see the earliest mentions of GRI. The other
This harmonized approach promotes transparency, world regions have fewer policies and fewer mentions
accountability and benchmarking across diverse industries of GRI. Africa has 575 mentions across 24 policies;
and regions. South America has 506 mentions across 32 policies; the
Middle East has 307 mentions across 14 policies; and
We start by examining the number of policies mentioning North America has 306 mentions across 15 policies.
the GRI Standards over time (from 1996 to 2022). The Concurrently, we see a major increase in policies and
results are presented in Figure 19. In terms of general mentions in Africa and the Americas in the past 5 years.

38
39
GRI’s modular system of
Standards
The GRI Standards are designed as a modular
system of interconnected standards. They are
designed to be used together to provide a
comprehensive overview of an organization’s
impacts on the economy, environment,
and people. Essentially, the GRI Standards
focus on the impact perspective of double
materiality.

GRI Standards consist of three series of

Standards: Universal Standards, Sector
Standards, and Topic Standards

1. The three Universal Standards need to

be used by all organizations and they
contain requirements and disclosures
that any organization must comply with,
when reporting in accordance with the
GRI Standards.

2. The Sector Standards9 are a new

addition to the system and have been
introduced to help increase the quality,
completeness, and consistency of
reporting by organizations in a sector.
The Sector Standards list the likely
material topics for organizations in a
sector, and they also list the disclosures
that are relevant for reporting on each
of those likely material topics. An
organization is required to use the Sector
Standard or Standards that apply to them.

3. The 31 Topic Standards detailed in Table

5 cover a wide range of topics, from
Emissions to Occupational Health and
Safety or Tax and contain disclosures
to report on each of those topics.
Organizations only use those Topic
Standards that are relevant based on the
material topics they have identified.

In recognition of the interrelated nature

of the various topics covered under the
Topic Standards, during the 2021 revision
of the GRI Standards, GRI has dropped
the classification of the topic standards
into Environmental, Social, and Economic
categories. However, with the global
debate around transparency and reporting
using the ESG (Environmental, Social and
Governance) classification for standards, we

40
41
have (see Table 6) mapped the GRI Standards practices and stakeholder engagement. This 9 Since the first sector
against this classification to help the ease of finding underscores the significant emphasis standard was only
understanding. For reference we used the that regulators put on transparency in how published in 2021,
categorization used by the European Union companies manage their business. This is not these have not been
included in this report.
in the delegated act which provides the surprising given that transparency is deemed
European Sustainability Reporting Standards as essential to enabling accountability and is 10 There is currently
(ESRS) standards.¹⁰ in and of itself essential to good governance. no equivalent ESRS
This is followed by two environment-related to GRI 205: Anti-
We proceed by examining the relative Standards, namely GRI 305: Emissions (13.5%), Competitive Behaviour
focus of policies on the GRI Standards. To which includes references to key issues 2016, therefore that
do this, we use a topic modelling approach regarding greenhouse gases and ozone- topic Standard is not
and a dictionary of terms related to GRI’s depleting substances, and GRI 303: Water included in the table
Universal and Topic Standards. As such, we and Effluents (8.1%), which includes issues above.
are not assessing specific mentions of the regarding water supplies, water costs, and
GRI Standards (e.g., GRI 1: Foundation), but water discharge impacts. GRI 412: Human
rather the broader themes upon which these Rights Assessment constitutes 5.4% of the
Standards are built. An overview of our GRI C&S database and includes things like
dictionary is available on the C&S website. human rights reviews, clauses, training, and
The results are presented in Figure 21. The screening. The remaining GRI Standards all
most dominant Standard by a considerable constitute less than 5% of the C&S database.
margin is GRI 2: General Disclosures (40.2%); There is a surprising concentration among just
this covers the organizational profile of a few core GRI Standards, with the remaining
businesses, business strategy, ethics, integrity, Standards being less prioritized in ESG &
governance, management approach, reporting sustainability policies.

42
43
How has the focus on specific GRI Standards changed Finally, we examine GRI Standards in terms of focus on
over time? Figure 22 maps out the top five GRI standards specific business sectors, considering both horizontal (e.g.,
across six time periods. GRI 2: General Disclosures stands management) and vertical (e.g., finance) understanding of
out not only because it is the top-ranked standard across sectors. Here, we look exclusively at the top seven (i.e.,
all time periods, but also because it constitutes a relatively those included in Figure 16) business sectors previously
sizeable share of the policy focus, ranging from about 36% identified: ‘finance and insurance’, ‘management of
to over 52%. This is followed by GRI 305: Emissions, taking companies’, ‘mining, quarrying, oil and gas extraction’,
the number two spot from 1996 to 2022, and then GRI ‘manufacturing’, ‘professional, scientific and technical
303: Water and Effluents, taking the number three spot for services’, ‘public administration’ and ‘transportation &
the same period. There is a good amount of consistency warehousing’. Specifically, we measure the degree to
across these six time periods, and we do not see major which policies that target these sectors also focus on GRI
fluctuations in the relative share of policies: GRI 404: Standards.
Training and Education, is among the top five between
1990 and 2010; GRI 412: Human Rights Assessment is in The results are presented in Figure 23. First, we see
the top five from 1996 to 2000 and then again from 2006 that policies that target ‘finance and insurance’ show a
to 2022; and GRI 302: Energy is at the number five spot preponderance of focus on GRI 2: General Disclosures,
from 2011 to 2022. GRI 207: Tax and GRI 3: Material Topics, all at 16%.

44
Those policies that target ‘management of companies’ Economic Performance (19%). For ‘professional, scientific
include a significant focus on GRI 410: Security Practices and technical services’, the focus is GRI 207: Tax (20%).
(20%). Next, for ‘manufacturing’, we can see that these Policies that target the ‘public administration’ sector also
policies also tend to focus on GRI 306: Waste and GRI focus on GRI 415: Public Policy (26%), and GRI 409: Forced
417: Marketing and Labelling, both at 19%. Those policies or Compulsory Labor (25%). Finally, for policies that target
targeting ‘mining, quarrying, oil and gas extraction’ also ‘Transportation & warehousing’, the main focus is GRI 306:
focus on GRI 303: Water and Effluents (21%) and GRI 201: Waste and GRI 305: Emissions, both at 20%.

45
Conclusion
Conclusion The 2023 C&S report presents an expanded and
comprehensive assessment of ESG & sustainability
policy worldwide. The report offers increased
analysis in terms of temporal, spatial and linguistic
dimensions.

This expanded conceptualization of policy includes a The advance of regional and international sustainability
broader range of policy types moving beyond a focus reporting requirements bodes well for future progress.
on disclosure to encompass codes, guidance and The aim of ESG & sustainability policy is to improve
questionnaires, guidelines, laws and regulations, self- corporate accountability and transparency. This is a
regulation and standards, as well as implementation tools means to an end. The range of environmental and societal
such as assurance standards. Furthermore, the report aims of the SDGs is clear. However, the time frame for
reveals the increasing prominence of voluntary policies achieving the goals is closing and there are increasing
since the implementation of the SDGs in 2015. This trend concerns that they are unachievable. We argue that it
signifies a shift towards more proactive and voluntary is now more imperative than ever to understand how
approaches to addressing ESG & sustainability issues, policies can drive the necessary results – around net zero
complementing the mandatory policy landscape. Our targets, poverty, equality and inclusion, and more.
reading of this is that, over time, these voluntary policies
have helped expand and update agendas. Looking ahead, in 2024 we will expand C&S’s analysis
features. This means including new metrics and website
We note that ESG & sustainability policies have filters, a functionality that allows users to directly
proliferated in the last 30 years, especially since the compare policies, and an AI interface through which users
1992 Rio Earth Summit. In line with our observation that can employ natural language prompts to obtain real-time
Europe is an especially active policymaking region, we information (e.g., Is a policy currently in force? and What
note that while preparing this 2023 annual report, the are the penalties for non-compliance?).
European Union’s Corporate Sustainability Reporting
Directive (CSRD) came into force. The CSRD was Our hope is that tools like C&S serve as a resource for
developed based on public consultation and technical academics, policymakers and stakeholders interested
advice from the European Financial Reporting Advisory in understanding the trajectory of ESG & sustainability
Group. From the 2025 financial year, reports need to policy. The expanded coverage, diverse policy types,
be published in compliance with CSRD rules for large and temporal analysis, we hope, enhance our collective
companies, as well as listed SMEs, across Europe. This understanding of the policy landscape’s complexity. We
applies to approximately 50,000 companies, whereas hope that C&S offers policy makers usable insights into
its preceding directive – the Non-Financial Reporting which policies, and which attributes, deliver results. For
Directive (NFRD) – only applied to approximately 11,700 industry leaders, our aim is for C&S to serve as a vital
large companies and groups. The European Sustainability resource for informed decision-making for corporate
Reporting Standards mandate specific disclosures for strategy and reporting practice. Ultimately, we hope C&S
companies reporting in compliance with the CSRD. can help inform better ESG & sustainability policymaking
– policies that are widely used and capable of ushering in
At the international level, in June 2023, the International positive change.
Sustainability Standards Board issued its first two
disclosure standards aimed specifically at the financial
information needs of investors: International Financial
Reporting Standards (IFRS) S1: ‘General Requirements for
Disclosure of Sustainability-related Financial Information’
and IFRS S2: ‘Climate-related Disclosures’. The IFRS S2
requires companies to report on climate-related risks
and opportunities from the 2024 financial year. IFRS S2
distinguishes physical risks (e.g., event-driven shocks)
and transition risks (e.g., those associated with shifting
towards a lower-carbon economy).

47
About the
project partners
About the project
partners

Global Reporting Initiative University of Edinburgh

GRI is an independent international organization that Established in 1582, the University of Edinburgh in
has pioneered sustainability reporting since 1997. GRI Scotland is a distinguished institution renowned for its
helps businesses and governments worldwide understand academic excellence and rich history. As a member of the
and communicate their impacts on critical sustainability prestigious Russell Group, an association of 24 leading
issues such as climate change, human rights, governance research-intensive universities in the United Kingdom,
and social well-being. This enables real action to create the university upholds a commitment to excellence that
social, environmental and economic benefits for everyone. is evident in its consistent placement within the top 20
The GRI Standards, the world’s most widely used for universities worldwide. Its strong performance in global
sustainability reporting, are developed with multi- rankings further highlights its dedication to providing
stakeholder contributions and are rooted in the public world-class education and conducting impactful research.
interest.

King’s College London Stellenbosch Business School

Established in 1829, King’s College London is a renowned Established in 1964, Stellenbosch Business School at
institution with a legacy of academic excellence and Stellenbosch University in South Africa was the first
innovation. As a proud member of the prestigious school from an African university to hold all three
Russell Group, a distinguished association of 24 leading international accreditations: AACSB, EQUIS and AMBA.
research-intensive universities in the United Kingdom, Stellenbosch Business School’s mission is to develop
King’s College London upholds the highest standards of responsible leaders who can help to create value for
education and research. The university’s commitment to a better world. The school’s areas of expertise include
excellence is evident in its consistent presence among the Responsible Leadership, Futures Studies and Foresight,
top-ranking institutions globally. King’s Business School is Finance and Growth, Equality and Diversity, Conflict
triple crown accredited (AACSB, EQUIS, and AMBA) and a and Collaboration. Leadership Coaching, Corporate
thought leader in sustainable and responsible business. Governance, Entrepreneurship and Innovation.

49
Disclaimer
Disclaimer

This report does not claim to be an in-depth scientific study or

analysis. It also does not aim to provide complete and consistent
coverage of mandatory and voluntary reporting provisions. The
report does not include an assessment of the impact of the reporting
provisions identified. This document does not constitute legal
advice – it is a general research report prepared for the purpose of
informing discussion. The report is based largely on desk research
and may contain inaccuracies. Although we endeavour to provide
accurate and timely information, there can be no guarantee that
such information is accurate as of the date it is received or that it
will continue to be accurate in the future. No individual or any other
entity, including governments or governmental representatives, should
initiate actions based solely on the contents of this report. Readers
are encouraged to inform the project partners about any inaccuracies
or to provide additional information for future editions. The views
expressed in this publication reflect those of the individual authors
and not necessarily those of the University of Stellenbosch Business
School, Stellenbosch University, King’s College London, University of
Edinburgh or GRI. While the GRI Board of Directors encourages the
use of GRI publications by all organizations, the views expressed do
not necessarily represent the decisions or the stated policy of GRI,
nor does citing of trade names or commercial processes constitute
an endorsement. Neither the GRI Board of Directors nor the project
funders can assume responsibility for any consequences or damages
resulting, directly or indirectly, from the use of GRI publications. This
work has been funded by the Government of Sweden. Responsibility
for the content lies entirely with the creator. The Government
of Sweden does not necessarily share the expressed views and
interpretations.

51
Authors and
Acknowledgements
Authors and
Acknowledgements

Lead authors
Adam William Chalmers, Senior Lecturer (Associate Professor), Politics
and International Relations, University of Edinburgh, UK.

Robyn Klingler-Vidra, Associate Professor in Entrepreneurship &

Sustainability, King’s Business School, King’s College London, UK.

Peter Paul van de Wijs, Chief External Affairs Officer, Global Reporting
Initiative.

Cornis van der Lugt, Senior Lecturer Extraordinaire, University of

Stellenbosch Business School, South Africa.

Tabitha Bailey, Senior Policy Coordinator, Global Reporting Initiative.

We would also like to thank the following

people for their contribution to the C&S
2023 database.
Julie Eriksen, Sixtine Gaudry, Anais Julin, Gaurav Kathuria, Leonie
Laubmann, Andrea Pedersen, Karissa Shah, Lucie Skopkova.

This report should be cited as:

Chalmers, Adam William, Robyn Klingler-Vidra, Cornis T. Van der Lugt,
Peter Paul van de Wijs & Tabitha Bailey (2023). Carrots & Sticks: Beyond
Disclosure in ESG and Sustainability Policy. Annual Report. University of
Edinburgh, King’s College London, Global Reporting Initiative (GRI) and
the University of Stellenbosch Business School (USB).

GRI would like to thank the Government of Sweden for their financial
support to this project.

53
Appendix
55
56
57
58
 Measuring policy 'restrictiveness'
Restrictiveness is measured as a proportion of the Restrictions on business is measured as a proportion
number of ‘restrictiveness’ ngrams located in each of the number of ‘restrictions on business’ ngrams
policy. These ngrams were taken from the Loughran- located in each policy. These ngrams were taken
McDonald Master Dictionary w/ Sentiment Word List. from the Restrictions on business Ngram Dictionary.
Values are re-coded into one of five categories: very In this instance, values are re-coded into one of
low, low, moderate, high, and very high. Categories are four categories: low, moderate, high, and very high.
determined based on standard deviations (0.34) from Categories are once again determined based on
the mean (0.569) of all restrictiveness scores in the standard deviations (0.17) from the mean (0.08) of
corpus. This makes our categories comparable across all scores in the corpus. This makes our categories
the entire dataset. comparable across the entire dataset.

59
60
61
62