Behind the Corporate Veil: How Business Groups Arbitrage ESG Disclosure Mandates

In this episode, Tom Gosling speaks with Stefano Cascino about how large business groups respond to ESG disclosure rules. When parent companies face mandatory ESG reporting, they often improve their own scores—while quietly shifting environmentally or socially harmful activities to subsidiaries, especially those operating in countries with weaker institutions.

Tom and Stefano discuss how this “ESG arbitrage” works in practice, why subsidiaries see more incidents after mandates are introduced, and how corporate groups restructure—through reallocating resources or divesting risky units—to manage these pressures. The conversation highlights the unintended consequences of uneven global regulation and why coordinated ESG policy matters.

Host: Tom Gosling ⁠Contributor: Dr Stefano Cascino

Read Stefano Cascino's paper, co-authored with Maria Correia: Behind the Corporate Veil: How Business Groups Arbitrage ESG Disclosure Mandates

To learn more about the Initiative in Sustainable Finance (ISF), visit ISF's website (⁠⁠https://www.fmg.ac.uk/isf⁠⁠). ⁠