ESG investment and reporting: Reframing sustainability

Oxford Analytica partnered with EY to publish EY’s in-depth report, The emerging sustainability information ecosystem, which explores the answers to existential questions now facing environmental, social and governance (ESG) investing and reporting.

The challenge

Data shows that ESG is the fastest-growing segment of the asset management industry, with assets in ESG funds growing 53% year-on-year to $2.7 trillion in 2021/22.

More recent developments, however, have threatened the continued growth of the ESG movement. These include evolving priorities of policymakers and investors in response to new economic and geopolitical challenges (e.g., inflation, the Russian invasion of Ukraine, and growing US-China tensions). But it is also the result of growing allegations of greenwashing, which has become a major challenge to ESG’s credibility and success.

Questions are being asked: What does ESG really mean? And are ESG investors being effectively served by the broader sustainability information ecosystem? These considerations are relevant both to investors that are focused on financial risk as well as those who are focused on social impact.

Report purpose and insights

In response to critical questions, experts from across EY and Oxford Analytica came together to author the report, The emerging sustainability information ecosystem, which incorporates additional insights from 40 thought leaders across the sustainability information ecosystem.

It examines some of the key dynamics shaping the emerging sustainability information ecosystem and provides insights into how both decision usefulness and trust in sustainability information can be strengthened. The report aims to:

  • Highlight the differences between the financial and sustainability information ecosystems — illustrating the complexities that should be acknowledged and addressed in the latter.
  • Articulate the need to deepen stakeholder engagement across the multitude of ecosystem actors.
  • Identify key areas of focus to address some of the current challenges faced by stakeholders.

The report argues that there has been a lack of agreement on what ESG should include, how to apply agreed metrics and how best to use available data. To build greater trust in ESG, The emerging sustainability information ecosystem goes on to provide recommendations, outlining five core areas that must be addressed:

  1. Increased transparency over ESG ratings.
  2. Increased understanding of the varying uses of sustainability information.
  3. Independent assurance alongside enhanced reporting standards and rigour, similar to financial reporting.
  4. The development of agreed sustainable finance taxonomies to help eliminate confusion on what is considered sustainable and what is not.
  5. Lower barriers to entry for those from emerging economies.

The report’s recommendations are a starting point in the effort to truly reframe sustainability and they are a reflection that building alliances and forging collaboration is everybody’s business. By addressing the challenges and finding ways to build trust in the system, the report aims to support the many players who must shape the sustainability ecosystem to ensure ESG is seen by stakeholders as on a par with the more established ecosystem of financial reporting.

While recognising the increasing connections between sustainability reporting and financial reporting, The emerging sustainability information ecosystem identifies the additional voices and perspectives that shape the sustainability information ecosystem, including civil society and employees. It calls for greater engagement among these groups to develop reporting and disclosure standards, sustainable finance taxonomies and ESG ratings that serve all investors.


The report was published in July 2022 at a make-or-break moment in the continuing evolution of the ESG movement. In recommending the work that must be done to encourage open collaboration and trust-building among those who shape the industry, the report helps to lay the groundwork to build a sustainability information ecosystem that is globally consistent, trusted and responsive.