ESG and Education Ethics and Corruption

Ethics and Corruption

Corruption is one of the world’s greatest challenges, and it disproportionately impacts poor communities and seriously hinders sustainable development. For companies, corruption disrupts economic growth, interferes with competition, and causes grave legal and reputational risks.

Laws and regulations across the world push companies to establish robust anti-corruption measures, and the growing requirements of information transparency and accountability make companies subject to greater scrutiny. Already, companies face significant fines and enforcement actions, with adverse consequences on their balance sheet. Only in 2021, four companies suffered total fines of more than $300 million.

An increasing number of investors evaluate companies’ anti-bribery and anti-corruption efforts, as those systems reflect the overall quality of companies’ business practices and management. Corruption increases both the cost of business and the uncertainty of expected returns for investors.

5% of the global gross domestic product (GDP)

lost to corruption, equivalent to $3.6 trillion.

For companies to achieve a desired reduction in corruption-related risk, education should be a top priority. Studies have demonstrated that societies with higher levels of education have less corruption, and those with higher levels of corruption realize lower levels of learning. The lack of primary education was one of the strongest predictors of corruption in a study across 123 countries. The knowledge, skills, and behaviors that individuals acquire through education shape the future of society and business while helping them uphold public integrity and prevent corruption.

Investments in efforts to reduce corruption by business also align with the expectations of most of the major ESG reporting frameworks. Education provides companies with the means to demonstrate how they are preventing corruption systemically, as well as amongst their own employees, and how that corresponds to reduced risk for investors and stakeholders engaged with the company.

Other materiality issues linked to education


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