Rushing Headlong Into Creating an Integrated ESG Reporting System: Is it Harmless or Harmful to Society?

The creation of an integrated ESG reporting system is rapidly progressing, with many agencies aiming to establish a universal summary metric to rank companies on their ESG performance. However, the legitimacy and expertise of these agencies are questioned. The diverse stakeholder needs and contradictory objectives make it difficult to create a meaningful and universally applicable metric. Additionally, accountants lack specialized knowledge in ESG issues, and there are concerns about greenwashing, gaming, and the potential inefficiency of such a system in capital allocation. A more effective approach would involve specialized agencies and grassroots efforts.