ESG considerations have become increasingly important for investment decisions by institutional investors. However, institutional investors frequently complain that the availability and quality of firm-level ESG disclosures are insufficient to make informed investment decisions.

In response to the gap between the demand for ESG information by investors and the supply of information by firms, several countries have initiated mandatory ESG disclosure regulations to properly disclose information on ESG issues in traditional financial disclosures or specialized standalone reports (e.g., in sustainability, citizenship, or CSR reports).