Connecting corporate anti-corruption and sustainability - reporting and due diligence

The term environmental, social and governance (ESG) was first coined in a 2004 report by the United Nations supported by leading financial institutions calling for investors and other capital market actors to incorporate non-financial factors into their financial analysis to increase shareholder value by properly managing risks while “contributing to the sustainable development of the societies in which they operate.”

Corruption is a core sustainability concern. Unmanaged corruption risk can affect companies’ financial performance and their contribution to sustainable development. For example, companies involved in corruption scandals face the prospect of reputational harm and substantial legal fines. Corruption also amplifies the risk of environmental and human rights harm and undermines fair competition. Relatedly, opaque corporate lobbying risks undue influence on policy development and undermines trust in public institutions.

Conversely, high standards of business integrity provide the foundations for business resilience and long-term success and safeguard positive contributions to sustainable development.

In recent years, there has been a proliferation in reporting standards intended to help companies communicate relevant ESG information to their stakeholders. Corruption – including bribery, conflicts of interest and political influence – and mitigation practices – including policies, procedures, training and whistleblowing channels – as disclosure topics are included, to varying degrees, within diverse various reporting standards and ESG ratings generally within the “governance” (G) pillar.

However, reporting practices are mixed. Our 2022 research with British International Investment found that impact investors, typically private equity, are inconsistent in how they collect data from their investees during the investment lifecycle, which limits the potential for proactive risk management and risks the achievement of intended social and environmental outcomes. Our 2023 research with the International Federation of Accountants (IFAC) found that while the sustainability disclosures of 95 per cent of listed companies assessed (the 40 largest listed companies in 15 jurisdictions) report some corruption/anti-corruption information, there is wide variety in the information reported.

Businesses’ responsibility to respect human rights (set out in the UN Guiding Principles on Business and Human Rights (UNGPs)) is increasingly codified, to an extent, through legislation requiring corporate human rights and environmental due diligence, including the EU Corporate Sustainability Due Diligence Directive (CSDDD), which also highlights how “adverse human rights and environmental impacts can be intertwined with or underpinned by factors such as corruption and bribery”.

Our 2024 guidance on pre-investment due diligence for impact investors explores how aligning integrity risk and environmental & social due diligence processes enables more proactive identification of red flags in interconnected risk areas and better protects investment outcomes.

Our 2025 guidance on coordinating anti-corruption and sustainability in practice explores how setting up or updating a sustainability compliance framework is an opportunity for companies to leverage and adapt existing processes and promote cross-functional coordination for more proactive risk management.

The European Sustainability Reporting Standards (ESRS) accompanying the EU Corporate Sustainability Reporting Directive (CSRD) include specific disclosures on bribery, corruption, public policy and whistleblowing. In November 2024, the European Commission announced plans to simplify the CSRD and CSDDD as part of an Omnibus simplification proposal. 

On 31 July 2025, EFRAG released revised Exposure Drafts proposing major changes across the ESRS and opened a public consultation. Transparency International submitted a response in September 2025. You can read our response online here. 

The European Commission opened a public consultation on a draft voluntary sustainability reporting standard for SMEs, which will define the information that large companies can request from SMEs in their supply chains including on anti-corruption and governance, in May 2026. Transparency International submitted our response in June 2026. You can read our response (once published) online here.