Current development in standard setting and SDGs. Will international standards help organisations to achieve sustainability and ensure effective reporting?

This chapter discusses the role of standardization in sustainability reporting as a strategy of positively contributing to the achievement of the SDGs. These are expected to encourage organizations to refocus their strategies toward sustainable outcomes and to incorporate also societal and environmental well-being into managerial decision-making. On the one hand, with ESG becoming mainstream, the calls for harmonization and standardization of sustainability reporting have become more pronounced. Globally, there is an ongoing effort to improve the comparability, straightforwardness, and coherence of reporting formats. On the other hand, the demands for harmonization of sustainability reporting criteria still lay an excessive focus on financial materiality and investor needs. The chapter highlights the persistence of a substantial degree of variety in the quality of SDG reporting, specifically discussing the distinction between sustainability reporting and SDG reporting. The first concerns the practice of providing information on sustainability issues, whereas SDG reporting refers to disclosing how an organization approaches the SDGs. Aside from this distinction, organizations are increasingly embracing the SDGs to assess and share their progress on sustainability concerns. The SDG agenda may resolve a persistent “tension” between the overriding importance of corporate financial performance and the world’s persistent natural resource depletion and growing societal inequality.