The Application of ESG in the Public Sector - Measuring the Sustainability of the Public Administration Sector

Besenyei, Mónika (2024) The Application of ESG in the Public Sector - Measuring the Sustainability of the Public Administration Sector. JOG ÁLLAM POLITIKA: JOG- ÉS POLITIKATUDOMÁNYI FOLYÓIRAT, 16 (1). pp. 181-210. ISSN 2060-4580

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Abstract

In the current global context, Environmental, Social és Governance (ESG) could undoubtedly be a revolutionary tool if it is coupled with the constraints that force not only the issuance of audited non-financial reports but also emphasize the significant impact that the indicators contained therein have on the market position of organizations. Although public administration permeates the economy as a whole and should play a crucial role in achieving sustainable development goals in the modern state, it is still the classic “polluting” industries that are at the centre of recent sustainability initiatives. The involvement of public administrations would be vital, given that their economic weight remains significant, even when compared to other actors in terms of carbon emissions. The indirect impact of public administrations and the example they set should not be neglected. It would have been worthwhile to make it compulsory for public companies to issue non-financial statements concurrently with their financial statements. At the same time, a framework could be developed within which each specialized public body could work. Unlike market actors, in the case of public institutions, the decision to introduce ESG reporting could lead to a faster start-up due to centralization. At the same time, it is important to bear in mind that data collection may pose the first major obstacle for many public institutions. However, the integration of operational and management data into an information system could yield benefits beyond ESG considerations, such as identifying cost-saving opportunities.

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