A history of Carrots & Sticks

The Carrots & Sticks 2020 report is the fifth in a series of regular stocktakes of sustainability disclosure requirements world-wide. Carrots & Sticks was first published in 2006 to provide an overview of trends in standards for sustainability reporting. Launched by the UN Environment Programme with KPMG International, it built on the regular global survey of corporate sustainability reporting by KPMG. The initiative was subsequently joined by the GRI and USB.

The first edition in 2006 covered standards in 19 countries, largely members of the Organization for Economic Cooperation and Development (OECD). By 2016, the 10th anniversary edition covered 71 countries and territories, including the 50 biggest economies (by GDP) in the world. By 2020 the latest edition reached 84 countries. Analysis and interpretation of the data can be found in the Carrots & Sticks 2020 report.

In 2019 Carrots & Sticks and the Reporting Exchange announced a new partnership and alignment of their taxonomies for documenting and categorizing non-financial reporting provisions. It was agreed that Carrots & Sticks supports the policy community, while the Reporting Exchange targets the business community. Through ongoing research collaboration, the two initiatives will further converge their data and content.

How the research is conducted:

For the 2020 edition the project partners conducted a review of the policy and regulatory landscapes in over 80 countries and territories. These were the top 60 economies by GDP – including most OECD countries – plus additional countries which were either included in previous editions of Carrots & Sticks or where relevant reporting provisions were known to be in place (see countries GDP listing by World Bank at: http://data.worldbank.org/data-catalog/GDP-ranking-table)

The research identified key reporting provisions that either require, encourage and/or support organizations to report on or disclose information related to their sustainability performance. The initial research was based on the content of Carrots & Sticks 2016 and more recent information contained in the GRI’s own database of sustainability reporting instruments. This was reviewed and expanded with support from GRI Regional Hubs and the other project partners. The Reporting Exchange was also consulted.

The results in this database are for over 80 countries in which our researchers were able to identify recognised sustainability reporting provisions. While the content of this database covers a core selection of over 600 reporting requirements and reporting resources, a broader range of reporting provisions including management resources can be found on the Reporting Exchange.

If you would like to inform us of significant and/or new sustainability reporting or disclosure provisions that are currently missing from the Carrots & Sticks database, please do so using the form here.

A note on terminology:

By ‘reporting provisions` we mean any instrument, mandatory or voluntary, that requires, encourages and/or supports organizations to report on their non-financial or sustainability performance.

We have considered a wide range of reporting provisions for the reporting or disclosure of sustainability-related information, including “non-financial” or “pre-financial” and “integrated” information. These provisions drive public reporting in many forms, for example in annual financial, integrated or sustainability reports, on websites, in documents submitted to stock exchanges for listing purposes, and in data published in response to questionnaires and specific regulations.

To help policy and business actors get the most out of the Carrots & Sticks and Reporting Exchange databases, the two initiatives have aligned their taxonomy and terminology so content is consistently categorized and easier to access. The alignment is reflected in the Carrots & Sticks 2020 report and the online Carrots & Sticks database.

We cover Reporting Provisions, which have the three categories of Reporting Requirements, Reporting Resources, and Management Resources. While Carrots & Sticks with its public policy orientation covers only Reporting Requirements and Reporting Resources, the Reporting Exchange also covers Management Resources. Our databases break down these provisions into aligned subcategories, including subjects, sectors, issuer and organisation types. The ESGE subject areas cover Environmental, Social, Governance as well as Economic & General as thematic domains.

The Reporting Requirements covered by Carrots & Sticks are:
  • Public laws and regulations,
  • Self-regulation (for example issued by stock exchanges or industry bodies),
  • Codes, guidance and questionnaires,
  • Guidelines and standards for non-financial reporting, as well as
  • Index questionnaires (for preparing ratings).

The Reporting Resources covered are tools for reporting, such as guides, standards (e.g. on assurance), and other materials for implementation.