Transformation of ESG Ecosystem and Approaches to Non-financial Reporting Regulation

Today’s complex and turbulent macroeconomic environment necessitates the revision of traditional tactics of a company’s value management in the context of social and environmental business responsibility. The emerging trend toward engaging an increasing number of actors interested in transparent and accountable ESG metrics entails the transition from heterogeneous perspectives toward shaping the sustainability ecosystem. The non-financial reporting agenda is on an upward trend, especially in the EU, demonstrating the evolving sustainable metrics reporting regulation. The research aims to describe the components of the sustainable related ecosystem, assess the effectiveness of sustainable standards as an integral part thereof, and leverage the industry-based approaches of reporting development in the oil and gas industry combating sustainable challenges. The research methodology is based on scientific generalization and statistical and comparative analysis of comprehensive reporting regulation implemented by the EU framework and reporting practices of world oil and gas companies attaining carbon neutrality. The research shows that the ESG ecosystem is becoming more dynamic, mature, and complicated due to the diversification of actors forming the architecture of ESG strategic models. Standards setters play a crucial role in forming the global baseline of non-financial reporting, which enables the assessment of companies’ strategic positioning regarding sustainable issues. The oil and gas industry exemplifies the effective integration of ESG reporting standards and recommendations. The convergence of the efforts of key sustainability actors may benefit the effective global reporting alignment.