Where ESG Reporting Is Mandatory, Who Must Report and How the Global Landscape Is Changing

Environmental, Social and Governance (ESG) disclosure is rapidly moving from voluntary corporate communication to regulated reporting.

For multinational companies, investors, auditors, finance professionals and supply-chain leaders, one of the most important questions is no longer simply “Should we report ESG?”

The more important questions are:

Where is ESG disclosure mandatory?

Which companies are covered?

What information must be disclosed?

When does the requirement begin?

Is the framework based on ISSB, climate-only reporting or a broader ESG model?

The global picture is developing quickly. The IFRS Foundation’s jurisdictional work shows significant movement toward adoption or other use of the ISSB Standards, with jurisdictions taking different approaches to scope, timing, transition reliefs and additional local requirements.

This article provides a practical country-level overview.

1. What Is Mandatory ESG Disclosure?

Mandatory ESG disclosure means that a company or other reporting entity is legally or regulatorily required to provide specified sustainability-related information.

The requirement may arise through:

• Company law
• Securities regulations
• Stock-exchange rules
• Sustainability-reporting legislation
• Climate-disclosure regulations
• Financial-sector regulation
• Corporate-governance requirements

Mandatory disclosure does not necessarily mean that every company in a country must publish a complete ESG report.

Most regimes apply only to defined categories of entities.

These may include:

• Listed companies
• Large companies
• Public-interest entities
• Banks
• Insurance companies
• Asset managers
• Large private companies
• Companies exceeding revenue or employee thresholds

2. The Global Picture at a Glance

The global regulatory landscape can broadly be divided into three groups.

Group 1 – Established Mandatory Reporting

Examples include:

• European Union
• India
• Australia
• New Zealand
• Singapore
• Malaysia
• Brazil

Group 2 – Phased or Developing Mandatory Frameworks

Examples include:

• Japan
• China
• United Kingdom
• South Korea
• Canada
• Hong Kong

Group 3 – Fragmented or Highly Decentralised Systems

The United States is the clearest example, with federal and state requirements developing separately.

This classification is only a high-level guide. Actual applicability depends on each jurisdiction’s latest legislation, regulatory rules, entity type and reporting period.

3. Why ISSB Matters

The International Sustainability Standards Board (ISSB) has become one of the most important forces behind the global convergence of sustainability disclosure.

The two principal standards are:

IFRS S1

General Requirements for Disclosure of Sustainability-related Financial Information

IFRS S2

Climate-related Disclosures

IFRS S1 requires information covering four core areas:

1. Governance
2. Strategy
3. Risk management
4. Metrics and targets

IFRS S2 focuses specifically on climate-related risks and opportunities.

However, the ISSB itself does not make the standards legally mandatory worldwide. Individual jurisdictions decide whether and how to incorporate them into their regulatory frameworks.

4. Global Country-Level ESG Disclosure Snapshot

The IFRS Foundation’s jurisdictional profiles and adoption work provide the most useful global reference point for tracking these developments.

5. European Union

The European Union has one of the world’s most comprehensive sustainability-reporting systems.

The principal framework is the:

Corporate Sustainability Reporting Directive (CSRD)

supported by the:

European Sustainability Reporting Standards (ESRS).

The EU framework also interacts with the:

• EU Taxonomy
• Sustainable Finance Disclosure Regulation
• Corporate sustainability due-diligence requirements
• Anti-greenwashing measures

However, the EU framework has undergone major simplification.

Under the revised CSRD framework, the reporting population is substantially narrower than under the original regime.

Key point

Companies cannot determine applicability simply by asking whether they operate in Europe.

They need to assess:

• Employees
• Revenue
• EU entity status
• Listing status
• Group structure
• Non-EU parent status
• Reporting period

6. United Kingdom

The UK is moving toward sustainability reporting based heavily on the ISSB framework.

The UK Sustainability Reporting Standards are:

• UK SRS S1
• UK SRS S2

The FCA has also developed rules for sustainability-related disclosures by in-scope listed companies.

The UK model illustrates the endorsement approach:

International standard → UK standard → regulatory requirement

This provides comparability while allowing the UK to introduce jurisdiction-specific modifications.

7. United States

The United States does not currently have one comprehensive mandatory ESG disclosure framework covering all companies.

Instead, the landscape consists of:

• Federal securities regulation
• SEC requirements and proposals
• State legislation
• Industry-specific requirements
• Investor expectations
• Contractual requirements

California is particularly significant.

Therefore, a company operating in the United States should conduct a federal + state-level ESG regulatory assessment rather than assuming that one national rule applies.

8. California

California has developed significant climate-reporting requirements through legislation including:

SB 253

Climate-related emissions reporting.

SB 261

Climate-related financial-risk reporting.

These rules are particularly relevant to large companies doing business in California.

The California model demonstrates an important principle:

A company’s ESG reporting obligations can be triggered by where it does business, not simply where it is incorporated.

9. India

India’s principal listed-company ESG reporting framework is:

Business Responsibility and Sustainability Reporting (BRSR).

BRSR became mandatory for the top 1,000 listed entities by market capitalisation from FY 2022–23.

India has also introduced:

BRSR Core

with selected ESG indicators and enhanced assurance requirements.

India’s framework is significant because it combines environmental, social and governance information rather than focusing exclusively on climate-related financial risk.

For Indian companies, ESG disclosure is therefore increasingly linked to:

• Corporate reporting
• Supply chains
• Investor expectations
• Assurance
• Board oversight
• ESG performance

10. Australia

Australia has introduced mandatory climate-related financial reporting on a phased basis.

The framework is strongly aligned with IFRS S2.

The Australian approach includes:

• Climate governance
• Climate strategy
• Risk management
• Metrics and targets
• GHG emissions
• Climate-related financial information

The reporting population is being phased according to company characteristics and size.

Australia therefore represents one of the clearest examples of a jurisdiction moving from voluntary climate reporting toward mandatory, ISSB-aligned disclosure.

11. New Zealand

New Zealand’s Climate-related Disclosures regime applies to defined Climate Reporting Entities.

The framework is based on the Aotearoa New Zealand Climate Standards and focuses on:

• Governance
• Strategy
• Risk management
• Metrics and targets

The system is primarily climate-focused rather than a comprehensive mandatory ESG regime covering every social and governance topic.

12. Singapore

Singapore has established a phased sustainability-reporting regime.

Singapore’s framework has a strong climate-first approach and is progressively expanding sustainability disclosures.

Listed companies and certain large non-listed companies are brought into the reporting framework according to applicable criteria and timelines.

The direction is toward greater alignment with:

IFRS S1 + IFRS S2

while retaining Singapore-specific implementation requirements.

13. Malaysia

Malaysia’s:

National Sustainability Reporting Framework (NSRF)

uses IFRS S1 and IFRS S2 as its baseline.

Bursa Malaysia has established phased sustainability-reporting requirements for listed entities, with the framework expanding progressively.

Malaysia is therefore an important example of an emerging-market jurisdiction using ISSB as the foundation for mandatory sustainability reporting.

14. Japan

Japan is developing mandatory sustainability disclosure through the:

Sustainability Standards Board of Japan (SSBJ).

The Japanese framework is designed to deliver outcomes broadly aligned with ISSB standards.

The approach is being phased according to the characteristics of listed companies.

Japan demonstrates that ISSB adoption does not necessarily mean simply copying IFRS S1 and S2 word-for-word.

Local regulators can introduce:

• Phase-in provisions
• Local modifications
• Scope conditions
• Transition relief

while maintaining broad interoperability.

15. China

China is developing a national sustainability disclosure system.

The country’s framework includes the:

Corporate Sustainability Disclosure Standards – Basic Standard (Trial).

China’s approach involves several regulatory institutions and is intended to establish a unified sustainability disclosure architecture.

The framework covers areas including:

• Governance
• Strategy
• Risk management
• Metrics
• Climate
• Environmental matters
• Social issues

China is therefore moving toward more standardised sustainability reporting while retaining a distinctly domestic regulatory structure.

16. South Korea

South Korea is developing its sustainability disclosure framework through the country’s financial authorities and standard-setting institutions.

The direction is toward greater alignment with international sustainability disclosure standards.

A major issue for Korean companies is determining:

• Which listed entities will be covered
• When mandatory reporting begins
• Whether requirements will be climate-first
• How Scope 3 reporting will be phased
• What assurance requirements will apply

The Korean framework should therefore be monitored closely by multinational companies operating in the country.

17. Canada

Canada has a mixed ESG regulatory structure.

There is no single ESG reporting law covering all companies.

Instead, companies may face requirements through:

• Securities regulators
• Financial-sector regulation
• Corporate governance rules
• Climate-risk guidance
• Provincial requirements

The Canadian Sustainability Standards Board has developed standards based on ISSB.

For federally regulated financial institutions, OSFI requirements are particularly important.

18. Brazil

Brazil has been an important early adopter of ISSB-based sustainability reporting.

The country’s securities regulator has introduced requirements aligned with IFRS S1 and IFRS S2.

Brazil is therefore one of the important examples of a jurisdiction moving toward:

ISSB → domestic regulation → mandatory reporting

The Brazilian model is particularly relevant to investors and multinational companies operating across Latin America.

19. Hong Kong

Hong Kong has developed sustainability-reporting requirements for listed companies through the Hong Kong Stock Exchange.

The framework is increasingly aligned with ISSB standards.

Hong Kong’s approach is particularly important because of its role as an international financial centre and its connection with mainland China and global capital markets.

20. Mexico

Mexico is developing sustainability disclosure requirements through its financial-reporting and securities framework.

The country’s sustainability standards are increasingly influenced by the global ISSB architecture.

For multinational businesses, Mexico demonstrates the wider trend in Latin America toward integrating sustainability information into corporate financial reporting.

21. Thailand

Thailand is also moving toward greater sustainability disclosure and ISSB alignment.

The direction includes stronger reporting on:

• Climate risks
• Sustainability-related financial information
• GHG emissions
• Governance
• Targets

Companies with significant operations in Thailand should monitor the country’s implementation timetable carefully.

22. Indonesia

Indonesia is developing an ISSB-aligned sustainability disclosure framework.

The country’s approach is particularly relevant for:

• Listed companies
• Banks
• Mining companies
• Energy businesses
• Plantation companies
• Large exporters

The importance of climate and natural-resource risks makes sustainability disclosure particularly relevant to Indonesian businesses.

23. Pakistan

Pakistan is among the jurisdictions moving toward the adoption or other use of ISSB Standards.

The direction is toward greater integration of:

• Sustainability risks
• Climate risks
• Governance
• Metrics
• Targets

The implementation timeline and scope should be monitored as the domestic regulatory framework develops.

24. Bangladesh

Bangladesh is also moving toward the incorporation of IFRS Sustainability Disclosure Standards into its reporting ecosystem.

For companies involved in:

• Textiles
• Manufacturing
• Export
• Banking
• Infrastructure

ESG data is likely to become increasingly relevant because international customers and investors are demanding sustainability information from their supply chains.

25. Africa: A Growing ESG Disclosure Market

ESG disclosure is also expanding across Africa.

Countries including:

• Ghana
• Kenya
• Nigeria
• Tanzania
• Uganda
• Zambia
• Zimbabwe

have announced or are developing approaches involving ISSB Standards or related sustainability disclosure requirements.

The IFRS Foundation’s jurisdictional information shows that African markets are increasingly becoming part of the global sustainability-reporting architecture.

26. How Many Countries Are Moving Toward ISSB?

The global movement is substantial.

An IFRS Foundation survey of 49 responding jurisdictions found that all 49 had introduced or planned to introduce sustainability-related disclosure requirements, while 47 had adopted, or planned to adopt or otherwise use, ISSB Standards.

This does not mean that ESG reporting is already mandatory for every company in those countries.

It means that the regulatory direction is increasingly toward structured sustainability disclosure.

27. Mandatory Does Not Mean the Same Thing Everywhere

One of the biggest mistakes in global ESG analysis is treating all mandatory reporting regimes as equivalent.

There can be major differences in:

Scope

Which companies must report?

Content

What information must be disclosed?

Timing

When does reporting begin?

Assurance

Does the information require external assurance?

Scope 3

Is value-chain emissions reporting mandatory?

Location

Must the disclosure appear in the annual report?

Transition Relief

Are certain disclosures temporarily exempt?

These differences can have significant compliance implications.

28. What Information Is Increasingly Becoming Mandatory?

Across jurisdictions, recurring disclosure areas include:

Governance

• Board oversight
• Management responsibility
• Controls
• Policies

Strategy

• Sustainability risks
• Climate opportunities
• Business strategy
• Resilience

Risk Management

• Risk identification
• Assessment
• Monitoring
• Mitigation

Metrics and Targets

• GHG emissions
• Energy
• Water
• Waste
• Other ESG indicators
• Progress against targets

These four areas closely correspond with the core content of IFRS S1.

29. Scope 1, Scope 2 and Scope 3

GHG emissions are becoming one of the most common components of ESG disclosure.

Scope 1

Direct emissions from sources owned or controlled by the company.

Scope 2

Indirect emissions associated with purchased electricity, steam, heat or cooling.

Scope 3

Other indirect value-chain emissions.

However, mandatory Scope 3 reporting is not uniform globally.

Some jurisdictions require it immediately for certain entities, some phase it in, and others provide exemptions or relief.

Therefore, companies should never assume:

“If Scope 3 is required in Country A, it must be required in Country B.”

30. Is ESG Assurance Becoming Mandatory?

Increasingly, yes.

Several jurisdictions are introducing assurance requirements or moving toward them.

The exact approach differs.

It may involve:

• Limited assurance
• Reasonable assurance
• Specific emissions assurance
• BRSR Core assurance
• Climate-data assurance

The ISSB itself does not mandate assurance; assurance requirements are determined by jurisdictional authorities.

31. What Does This Mean for Multinational Companies?

A multinational company should create a global ESG regulatory matrix.

A simple structure could be:

The matrix should be reviewed at least annually because regulatory requirements can change rapidly.

32. What Should CFOs Do?

CFOs should treat ESG disclosure as a reporting-control issue rather than merely a sustainability issue.

They should establish:

• ESG data ownership
• Reporting controls
• Documentation
• Calculation methodologies
• Management review
• Internal audit procedures
• Assurance readiness

The goal should be to make ESG information:

Accurate + Complete + Consistent + Traceable + Verifiable

33. What Should CA and CMA Professionals Do?

The expansion of mandatory ESG disclosure creates significant opportunities for finance professionals.

CA and CMA professionals can develop expertise in:

• ESG reporting
• BRSR
• ISSB
• ESRS
• Carbon accounting
• ESG assurance
• Sustainability costing
• Climate-risk analysis
• ESG internal controls
• ESG dashboards
• Sustainable finance

For management accountants, ESG can also be linked to:

• Cost reduction
• Energy efficiency
• Carbon costing
• Resource productivity
• Capital budgeting
• Performance measurement

34. What Should Indian Companies With Global Operations Do?

An Indian company may be subject to more than Indian ESG requirements if it:

• Has an EU subsidiary
• Is listed overseas
• Operates in the UK
• Has significant Australian operations
• Does business in California
• Supplies multinational customers
• Receives sustainability-linked financing

Therefore, Indian companies should create a global ESG applicability assessment.

35. What Should MSMEs Do?

An MSME may not be directly subject to mandatory ESG reporting.

However, it can still face ESG requirements indirectly through customers.

For example, a multinational buyer may ask an MSME supplier for:

• Carbon emissions
• Energy data
• Labour information
• Safety information
• Human-rights policies
• Environmental compliance

This creates a supply-chain transmission effect.

Mandatory ESG reporting by large companies can therefore generate ESG data requirements for smaller suppliers.

36. The Emerging Global ESG Data Chain

The future ESG reporting ecosystem can be represented as:

Regulator

↓

Listed / Large Company

↓

Supplier

↓

MSME

↓

Raw Material Provider

This means ESG disclosure is increasingly moving beyond the reporting company and into the value chain.

37. How Companies Should Prepare

A practical five-step strategy is:

Step 1 – Map

Identify every jurisdiction where the group operates.

Step 2 – Determine

Identify applicable ESG reporting thresholds.

Step 3 – Standardise

Create a common ESG data dictionary.

Step 4 – Control

Establish internal controls and evidence trails.

Step 5 – Report

Generate jurisdiction-specific disclosures from a common data architecture.

This approach reduces duplication and improves consistency.

38. Global ESG Reporting: The Direction of Travel

The global trend can be summarised as:

Voluntary ESG Reporting

↓

Standardised Disclosure

↓

ISSB-Based National Standards

↓

Mandatory Reporting

↓

External Assurance

↓

Integration With Financial Reporting

The IFRS Foundation describes ISSB Standards as a global baseline that jurisdictions can mandate and combine with jurisdiction-specific requirements.

39. Important Caution When Comparing Countries

Country-level ESG data must always be interpreted carefully.

A country listed as having “mandatory ESG reporting” may have requirements applying only to:

• Large listed companies
• Banks
• Insurers
• Specific industries
• Public-interest entities
• Companies above revenue thresholds

Therefore:

Mandatory in a country ≠ mandatory for every company in that country.

This distinction is essential for accurate ESG analysis.

40. The Worldonomics Times Global ESG Disclosure Framework

For practical business use, countries can be classified into five categories:

Category A – Mandatory ESG/Sustainability Reporting

Established legal or regulatory requirements.

Category B – Mandatory Climate Reporting

Climate-focused disclosure is mandatory for defined entities.

Category C – Phased ISSB Adoption

ISSB-based requirements are being introduced progressively.

Category D – Developing Framework

Regulators have announced or are developing ESG disclosure requirements.

Category E – Fragmented / Voluntary

Requirements remain limited, fragmented or largely voluntary.

This classification should be reviewed regularly as countries update their regulatory roadmaps.

Conclusion

The global ESG disclosure landscape is moving rapidly toward greater standardisation, but it is not yet a single global system.

The ISSB has emerged as the most important global baseline for sustainability-related financial disclosure. Many jurisdictions are adopting, adapting or otherwise using IFRS S1 and IFRS S2, while others have developed broader sustainability frameworks or additional stakeholder-focused requirements.

For businesses, the key challenge is therefore not simply producing an ESG report.

It is building a reliable system that can answer four questions:

Where must we report?

What must we report?

When must we report?

Can we prove the data we report?

For CFOs, Chartered Accountants, Cost and Management Accountants, auditors, sustainability professionals and corporate boards, ESG disclosure is rapidly becoming part of mainstream corporate reporting.

The companies that build strong ESG data, governance and internal-control systems today will be better positioned to manage the increasingly complex regulatory landscape tomorrow.

The Worldonomics Times Takeaway

The future of ESG reporting is global in direction, but local in regulation.

Understanding the country-level rules—and building one reliable global ESG data system behind them—will be critical for companies operating across borders.