Magic with ESG key figures – Prof. Dr. Jannis Bischof in the FAZ

Prof. Dr. Jannis Bischof, holder of the Chair of Business Administration and Accounting, in Frankfurter Allgemeine Zeitung newspaper about new obligations for companies in the area of sustainability reporting.

Reporting obligations for companies should enable politicians and civil society to demand accountability from companies. It also offers firms an incentive to implement business models adapted to sustainability goals. However, studies show that companies with a high level of activity in the area of ESG (environmental, social and governance) also have a higher proportion of accounting policies. Similar to financial key figures, green key figures also allow a great deal of leeway, depending on the measurement model and assumptions about the use of products. In principle, business administration research shows that internal company measurements often serve the company's own interests. Additionally, compared to financial reporting, the safeguards against this information policy are less developed in the area of sustainability reporting, which influences the credibility of the information.

The introduction of the ESRS model, which companies must use to estimate their greenhouse gas emissions, is intended to provide a method for standardizing and expanding sustainability reporting. However, many companies are critical of the introduction due to the bureaucratic burden and lack of expertise. Prof. Bischof explains that the blanket regulation will not be equally effective everywhere and that there are incentives to distort the reports within the legal framework.

Read the full article here. [Only available in German]