In the past few years, there has been a strong increase in ESG reporting requirements around the world. ESG stands for Environmental, Social, and Governance. They are a set of standards for a company's operations that have become a popular way to indicate a firm’s sustainability performance. There are various issues reported by companies under each of the three pillars, comprising a variety of metrics. The environmental criterion considers how companies manage their environmental impact and use resources. Some of the factors include greenhouse gas emissions, water use, land-use, biodiversity, pollution management, and climate change adaptation. Social criteria focus on how the company fosters its people and engages with the wider society. Examples of social criteria include workforce diversity and inclusion, community engagement, customer satisfaction, and human rights. Governance considers the company’s internal system of practices and policies. Factors include business ethics and code of conduct, risk governance, supply chain management, and tax strategy.

Understanding the contribution of corporations to the climate crisis is essential to implementing measures to reduce greenhouse gas emissions.

This article introduces the Financial Mechanism established in the UNFCCC treaty, which aims to establish instruments and channels for developed country Parties to assist developing country Parties to be able to mitigate and adapt to the climate crisis.