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A New Approach to Sustainability Reporting

Author

Listed:
  • Garen Markarian
  • Hugo Salerno

Abstract

Does more information about sustainability lead to more sustainable outcomes, or does it lead to more greenwashing? We hold the latter view. European Sustainability Reporting Standards are insufficiently ‘green’ such that the process can be described as one of political ‘capture.’ It seems an impossible task to summarize the ESG footprint of diverse firms with any acceptable level of decision-usefulness. We advocate replacing ESG reporting standards with an ‘over-the-fence’ regulatory model inspired by the U.S. Environmental Protection Agency (EPA). This model emphasizes clear, enforceable, science-based environmental standards with binary compliance outcomes (pass/fail), monitored by well-funded public authorities. Unlike current ESG regimes, this approach would reduce information overload, improve accountability, and better align corporate behavior with societal goals. Such an EPA-style system offers a more effective and credible path forward for ESG governance, rather than delegating ESG to beauty contests involving consultants, bankers, lawyers, and rating agencies as self-interested judges.

Suggested Citation

  • Garen Markarian & Hugo Salerno, 2026. "A New Approach to Sustainability Reporting," Accounting in Europe, Taylor & Francis Journals, vol. 23(1), pages 20-31, January.
    • Handle: RePEc:taf:acceur:v:23:y:2026:i:1:p:20-31
    DOI: 10.1080/17449480.2025.2552669
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