Environmental, Social, and Governance (ESG) reporting and proper measurement of greenhouse gas emissions are becoming increasingly important for industries with substantial environmental impact. This research aims to assess the current state of ESG reporting practices and highlight areas for improvement across the automotive, construction and energy industries operating in the Central Eastern European (CEE) region. To achieve this aim, a multi-industry sustainability disclosure database was created and analyzed through a Python-based text-mining methodology, using term frequency-inverse document frequency and keyword-in-context analysis. The process involved extracting and preprocessing text from 60 sustainability reports for the year 2021, followed by constructing a custom dictionary of key ESG terms aligned with the European Sustainability Reporting Standards. The findings reveal considerable variance in the focus of qualitative disclosures across industries, particularly regarding climate change and biodiversity. The investigation underscores the need for enhanced transparency, consistent metrics, and rigorous validation in ESG reporting. The study also provides new insights into the technical possibilities of automated text analysis for sustainability reporting in the CEE region, and highlights key areas where improvement appears necessary.

Background: Development of objective, quantitative sustainability reporting scores for international companies has to be based on legal, regulatory, and public policy standards as well as focused exclusively on environmental, social, and governance (ESG) issues. The key performance indicators (KPIs) developed here differ from traditional agencies’ rating schemes in that they are equally applicable across industrial sectors. They measure performance in terms of several environmental Global Reporting Initiative (GRI) indicators. The KPIs quantify performance by systematically linking corporate revenues with sustainability metrics, thereby yielding readily comparable, numerical scores. Methods: This report illustrates their utility with data on carbon dioxide (CO2) emissions from leading companies within the S&P Global ESG ranking for 2023. Results: The findings reveal significant gaps in managing Scope 3 emissions, which dominate the value chain and present the greatest challenge for corporate sustainability. These disparities highlight the need for improved data transparency and harmonized reporting standards to ensure consistent and actionable sustainability assessments. Conclusions: By bridging these gaps, the KPIs enable more equitable comparisons across industries and encourage better alignment of corporate strategies with global climate objectives. The additional transparency and insights in turn afford investors, managers, policy makers, and other stakeholders’ better information for their decision making.

This study provides a comparative analysis of Environmental, Social, and Governance (ESG) ratings methodologies and explores the potential of eXtensible Business Reporting Language (XBRL) to enhance transparency and comparability in ESG reporting. Evaluating ratings from different agencies, the research identifies significant methodological inconsistencies that lead to conflicting information for investors and stakeholders. Statistical tests and adjusted rating scales confirm substantial divergence in ESG scores, primarily due to differing data categories and indicators used by rating firms. Using a sample of 265 European companies, the study demonstrates that individual ESG agencies report markedly different ratings for the same firms, which can mislead stakeholders. It proposes that XBRL based reporting can mitigate these inconsistencies by providing a standardized framework for data collection and reporting. XBRL enables accurate and efficient data collection, reducing human error and enhancing the transparency of ESG reports. The findings advocate for integrating XBRL in ESG reporting to achieve higher levels of comparability and reliability. The study calls for greater regulatory oversight and the adoption of standardized taxonomies in ESG reporting to ensure consistent and comparable data across sectors and jurisdictions. Despite challenges like the lack of a standardized taxonomy and inconsistent adoption, the research contends that XBRL can significantly improve the reliability of ESG ratings. In conclusion, this study suggests that standardizing ESG data through XBRL could provide a viable solution to the unreliability of current ESG rating scales, supporting sustainable business practices and informed decision making by investors.

In this research, SDG standards are mapped to the environmental, social, and governance (ESG) pillars through Triple-Bottom Line (TBL) groupings based on the Global Reporting Initiative (GRI) guidelines and accounting items, which allow SDG standards to be harmonised with the ESG pillars. Two methodologies developed in the literature for classifying SDG standards into TBL groupings were also used to create a ranking scheme. This scheme can help companies determine which SDG standards are most important for their sustainability reporting. Companies report on the steps they have taken towards sustainability and the sustainability aspects of their operations in their ESG sustainability reports. In many cases, their reporting includes information on SDGs, which, like ESG reporting, does not have a standard disclosure methodology, so announcements are made with different information, in different formats, by different companies. To make SDG reporting more consistent, harmonisation with existing ESG reporting methodologies could be identified as a forward step in this field because it would help to produce more informed, consistent SDG reporting. In addition to integrating SDGs into ESG reporting methodologies, SDGs also could be integrated into ESG scoring methodologies, which would be more relevant to stakeholders and the stock market. The paper will review ESG reporting and scoring methodologies, with a particular focus on which methodology is most appropriate for harmonisation. By defining the integration methodology, the study contributes to the public policy discussion about sustainable reporting.