MAY 8 — All have been told the corporate world is undergoing a moral awakening. Driven by pressure from investors, activists, and a new generation of consumers, the modern corporation has embraced the language of virtue. We see it in the glossy sustainability reports, the pledges to be “net zero” by 2050, and the earnest press releases about diversity, equity, and inclusion. This machinery of accountability is known as ESG reporting. But a review published in the Journal of Economics, Business and Commerce (Bukola et al., 2025) pulls back the curtain on this movement. The findings are sobering. What we are witnessing is not necessarily a revolution in corporate virtue, but rather the evolution of a sophisticated, often deceptive, public relations tool. Despite the proliferation of standards, we are losing the plot on corporate transparency.
We now have a dizzying array of frameworks: the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and the incoming European Union’s Corporate Sustainability Reporting Directive (CSRD). On CSRD, the convergence signals a maturation of the field. For the first time, we are moving from voluntary, to mandatory, audited data. But a critical challenge remains: the gap between form and substance. The “greenwashing” epidemic is one. When standards are complex and enforcement is weak, the smartest corporate team don’t work to make their companies greener; they work to make their reports look greener. The very proliferation of standards allows corporations to “forum shop”—choosing the framework that shows them in the best light while ignoring the ones that would expose uncomfortable truths. A company can claim to follow SASB for investors while publishing a GRI report for the public, creating two different versions of reality, both technically “compliant.”
The central paradox of the findings is more reporting does not equal more transparency. In fact, the sheer volume of data being produced is creating a “transparency trap.” Stakeholders are experiencing “disclosure fatigue.” When a company publishes a 200-page sustainability report filled with vague metrics, boilerplate language about “stakeholder engagement,” and emissions data buried in confusing appendices, they aren’t clarifying—they are obscuring. The opacity is hidden in the overload.
For the average investor, differentiating between a company genuinely transforming its business model and one merely managing its reputation is nearly impossible without forensic accounting skills. The “S” in ESG—the social component— has become a political battleground. The backlash against ESG in the United States is not merely a rejection of “woke capitalism,” as critics claim. Instead, it is a symptom of the system’s fragility. When reporting lacks standardization, it becomes easy to weaponize. Conservatives attack companies for subjective social metrics, while liberals criticize them for environmental inaction. In this crossfire, the actual impact—the carbon in the air, the wage gaps in the workforce—gets lost in the culture war.
The review implies a radical solution: we need to stop treating ESG reporting as a marketing exercise and start treating it as a financial audit. The move toward mandatory assurance is a good start, but the paper suggests it doesn’t go far enough. We need to retire the term “ESG” altogether. It has become too contaminated, too broad, and too easy to manipulate. Instead, we should bifurcate the concept. Material environmental risks—like climate vulnerability and water usage—should be treated with the same rigor as revenue recognition. They are financial risks, not ethical talking points. If a CFO can go to jail for misstating earnings, they should face similar liability for misstating carbon liabilities.
As for the social and governance aspects, we need to admit that standardized reporting has its limits. Corporate culture and ethical governance are qualitative realities that cannot be captured in a spreadsheet. The paper’s findings suggest that relying solely on quantitative ESG scores gives investors a false sense of security, allowing them to outsource their due diligence to rating agencies like MSCI or Sustainalytics, whose methodologies often conflict wildly.
ESG reporting started with noble intentions: to hold corporations accountable. But as the authors imply, the industry that has grown up around sustainability reporting—the consultants, the rating agencies, the standard-setters—has become a powerful intermediary with its own incentives. Those incentives are geared toward the production of reports, not the reduction of emissions.
If we want true corporate transparency, we must stop celebrating the volume of reporting and start punishing the evasion within it. Until regulators treat a misleading sustainability report with the same severity as a misleading financial statement, we are not moving toward a sustainable future. We are simply building a more elaborate stage for the same old play.
* Professor Datuk Dr Ahmad Ibrahim is affiliated with the Tan Sri Omar Centre for STI Policy Studies at UCSI University and is an Adjunct Professor at the Ungku Aziz Centre for Development Studies, Universiti Malaya. He can be reached at [email protected].
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
