Twenty-five years after the OECD Anti-Bribery Convention came into force, companies are facing an increasingly complex regulatory landscape, not only on anti-corruption but also sustainability.

In this blog, Vanessa Hans sheds light on recent corporate disclosure regulations and how companies can better meet stakeholders’ reporting expectations.

ESG regulations tighten: time to break down siloes

Most countries have had laws prohibiting bribery for over two decades. Many have introduced corporate criminal liability for corruption. Environmental and social corporate responsibility, however, has largely been addressed through soft-law instruments.

Now the regulatory landscape for sustainability topics is shifting away from soft law towards mandatory regulations. Companies need to establish a governance structure that adequately addresses anti-corruption compliance and broader environmental, social and governance (ESG) topics, including human rights issues.

That is a challenge for most businesses. A siloed approach still prevails, with limited exchanges of information between a company’s anti-corruption compliance function and its ESG function.

There are synergies between the environmental and social agenda and anti-corruption compliance – and breaking down silos is critical. Nonetheless, they remain distinct topics that require specific subject-matter expertise.

In our ethics and compliance work, we see how companies benefit from internal coordination on ESG and anti-corruption compliance within their broader risk management frameworks. The key is to leverage complementary aspects while treating the topics discretely when necessary.

A similar approach is helpful to leverage synergies between anti-corruption compliance and business and human rights.

Three ways to better meet stakeholder expectations on corporate disclosure

One thing that companies are grappling with is new disclosure requirements. The European Union’s Corporate Sustainability Reporting Directive, for example, requires companies to report according to the European Sustainability Reporting Standards (ESRS), which also cover topics relating to corruption and bribery.

Disclosure of anti-corruption efforts is not a new issue. Increased transparency through disclosure can be useful to build trust with external stakeholders, mitigate reputational risks and identify best practices.

Three innovative approaches to corporate disclosure for anti-corruption compliance can help provide inspiration for wider ESG-related reporting: effectiveness indicators, corporate culture and engagement in anti-corruption Collective Action.

1. Reporting on effectiveness

The Basel Institute has facilitated the co-development of a set of indicators that companies may wish to consider when reporting on the effectiveness of their anti-corruption efforts to external stakeholders. While these indicators were developed with health care companies, they are not sector specific and could prove valuable for companies working in other fields.

The guidance note was developed in collaboration with Norges Bank Investment Management (NBIM) and responds to NBIM’s publication of expectations of companies on anti-corruption. These expectations emphasise among others that companies should report on their anti-corruption programme, including disclosing how they measure its effectiveness. The expectations are based on internationally recognised principles such as the UN Global Compact and the OECD Guidelines for Multinational Enterprises.

The effectiveness indicators are grouped into five themes based on their relevance to the prevention of corruption:

• Culture
• Risk management
• Third parties
• Compliance function
• Oversight

The indicators use a combination of qualitative and quantitative metrics. Some are goal oriented and need descriptive answers. For others, a yes or no suffices.

2. Measuring corporate culture

It is worth taking a closer look at the first theme of the Basel Institute/NBIM effectiveness indicators – culture. An organisation’s culture impacts both employees’ behaviour and the effective implementation of anti-corruption and other ESG programmes. A real commitment to corruption prevention and sustainability requires a strong corporate culture focusing on integrity.

The focus on disclosures relating to corporate culture has attracted attention in recent months. The U.S. Department of Justice’s latest guidance document on the Evaluation of Corporate Compliance Programs (updated in September 2024), for example, highlights the importance of fostering an organisational culture “that encourages ethical conduct and a commitment to compliance with the law” – beyond having check-box compliance structure and policies in place.

Five of the indicators developed by the Basel Institute and NBIM relate to culture (paraphrased here). They can be a helpful resource for companies to define how they measure corporate culture and how it evolves over time:

1. A baseline to identify perceptions of the culture of integrity and a methodology to measure changes in the culture over time are established.
2. Frequency of references to ethics and compliance by C-level executives and managers.
3. Performance management framework incorporates how ethics and integrity objectives are achieved.
4. Ethics and integrity are integral components in leadership decisions.
5. The company actively engages in anti-corruption Collective Action.

Measuring an organisation’s corporate culture remains challenging. But the list of indicators can provide a starting point for companies wishing to not only shape a culture of integrity in their organisation but to report externally on the success of their efforts.

3. Multi-stakeholder engagement through Collective Action

Now it’s time to zoom in on the fifth culture-related indicator above: anti-corruption Collective Action.

Active and sustained engagement with peers and stakeholders from civil society and in some cases government through Collective Action can indicate a company’s commitment to integrity and a continuously improving ethical culture.

Collective Action has gained significant momentum in recent years. The Organisation for Economic Co-Operation and Development (OECD) in its revised Anti-Bribery Recommendation has formally endorsed the use of Collective Action to address corruption. The concept is also supported by development banks, including the World Bank. Most recently, the B20 Integrity and Compliance Task Force under the Brazilian presidency of the G20 has included fostering Collective Action initiatives as one of three policy recommendations. Looking at corporate disclosure, the Global Reporting Initiative’s standards for sustainability impacts (GRI Standards) also integrate Collective Action in their recommended anti-corruption disclosure.

Companies across different industries and sectors continue to face challenges when it comes to addressing the increasing jigsaw of varying international and national standards. Collaborative approaches such as Collective Action are an impactful way for companies to address these challenges jointly and also meet expectations of their stakeholders, be it on corruption prevention, human rights or other ESG topics.

Read more

• For details on all themes and effectiveness indicators for company reporting, see the Basel Institute/NBIM guidance note.
• For more information about Collective Action, visit our B20 Collective Action Hub.