U.S. companies are increasingly disclosing environmental and social data, reflecting the mounting importance of environmental, social, and governance (ESG) issues to investors and regulators. According to data by DiversIQ and HIP Investor, large-cap firms disclosing greenhouse gas emissions grew from 54% to 85% from 2019 to 2023. Analysts say the disclosures show companies are responding to pressure from activist investors, public pension officials, and new regulations, such as the EU’s Corporate Sustainability Reporting Directive.
Despite some high-profile withdrawals from ESG initiatives, many companies have made long-term commitments to climate and pay equity that are less affected by political shifts. While ESG critics argue that disclosures could be manipulated by activists to pressure companies into unnecessary changes, others emphasize that ESG issues are business-relevant risks often highlighted in corporate risk disclosures. With over 1,400 companies participating in ESG surveys, proponents argue that increased transparency aligns with consumer and employee demands.
