Sustainability plays an increasingly important role in society and the political debate. In
addition to environmental factors, sustainability also includes social factors and good
corporate governance, such as human rights and the prevention of corruption and bribery.
In the Paris Agreement of 2015, most countries agreed to limit global warming well below 2
degrees in this century. As a result, the EU developed the European Green Deal in 2019 to
make Europe the first climate-neutral continent.
Companies have to make a significant contribution to the EU`s sustainability goals. Part of the
EUs strategy is to increase companies transparency. The reasoning behind this is that
increased transparency should lead to a change in corporate behavior. This effect can be
triggered, among other things, by pressure from the capital and product markets. In recent
years, the EU has developed many transparency rules for companies. Currently, the EU
develops even stricter rules and works on European standards for sustainability reporting.
Unfortunately, there is currently little theoretical foundation for sustainability reporting.
However, the current legal initiatives can only be crowned with success if the regulation
developed is smart. Since there are few empirical studies because sustainability reporting has
only recently become mandatory for companies, a theoretical foundation is of utmost
importance.
This research project aims to close this gap. Based on mathematical and game -theoretical
modeling, we aim to develop a better understanding of the economic mechanisms and also
possible unintentional effects. On the one hand, our results will help predict the economic
effects of future regulation. On the other hand, the results may serve politicians and standard
setters.