The landscape around ESG-related disclosures and compliance is evolving. Regulators are accelerating efforts over mandatory disclosure requirements and taking action against ESG-related misconduct, in a bid to boost the transparency and accountability of companies. ESG-related fraud is also on the rise, referring to misrepresentations of ESG practices or performance to improve ESG ratings or attract stakeholders.
The landscape around ESG -related disclosures and compliance is evolving. Regulators are accelerating efforts over mandatory disclosure requirements and taking action against ESG -related misconduct, in a bid to boost the transparency and accountability of companies. For instance, the Singapore Exchange (SGX) has introduced mandatory climate reporting on a “comply or explain” basis commencing financial year 2023.
While there has not been any enforcement action taken in Singapore, the SGX could soon take other countries’ lead in doing so. Against this backdrop, it is no surprise that ESG-related fraud is also on the rise. ESG-related fraud refers to misrepresentations of ESG practices or performance to improve ESG ratings, demonstrate compliance with ESG-related disclosures or to attract stakeholders (e.g., greenwashing). ESG-related fraud is not new, as it shares many characteristics with financial fraud and misstatement
ESG Fraud Disclosure Compliance Regulators Transparency Accountability Singapore Exchange Climate Reporting Greenwashing