The Forces that Shape Mandatory ESG Reporting

33 Pages Posted: 3 Aug 2022 Last revised: 6 Sep 2022

See all articles by Thorsten Sellhorn

Thorsten Sellhorn

Ludwig-Maximilians-Universitaet (LMU) Munich; TRR 266 Accounting for Transparency

Victor Wagner

LMU Munich School of Management

Date Written: July 30, 2022


Having been sidelined for decades, environmental, social and governance (ESG) reporting by business en-tities has now firmly entered the mainstream in corporate reporting. In this chapter, we outline the economic forces and social institutions that shape mandatory ESG reporting. We start by introducing the term, devel-opment and significance of the ESG concept and related approaches that describe corporate actions beyond shareholder value maximization as well as corporate social and environmental exposures and impacts. ESG reporting is then characterized as an emerging complementary element of the broader phenomenon of cor-porate reporting. We continue by discussing the economic forces shaping ESG reporting as reactions to a growing collective awareness that a neoliberalist economic order, with companies focused solely on profit maximization, is causing serious ecological and social problems since externalities are not sufficiently in-ternalized. Corporate reporting and transparency about firms’ ESG-related matters are then presented as a potential remedy that, however, faces its own challenges and limitations. We then describe the evolving regulatory landscape of mandatory ESG reporting along with its key players and initiatives.

Suggested Citation

Sellhorn, Thorsten and Wagner, Victor, The Forces that Shape Mandatory ESG Reporting (July 30, 2022). TRR 266 Accounting for Transparency Working Paper Series No. 96, 2022, Available at SSRN: or

Thorsten Sellhorn (Contact Author)

Ludwig-Maximilians-Universitaet (LMU) Munich ( email )

Ludwigstr. 28 RG IV
Munich, Bavaria 80539
+49(0)89-21806264 (Phone)
+49(0)89-21806327 (Fax)


TRR 266 Accounting for Transparency ( email )

Warburger Straße 100
Paderborn, 33098

Victor Wagner

LMU Munich School of Management

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