Corporate ESG Reporting Roadmap: Practices and Outlook from eBay's Chief Sustainability Officer

Environmental, Social, and Governance (ESG) policies are increasingly becoming a core focus for companies. Faced with pressure from investors, regulators, customers, and other stakeholders to disclose climate impacts and the risks their operations pose to society and the environment, companies are forced to accelerate their actions.

Despite the growing demand for transparency, collecting and reporting ESG data still faces many challenges, such as the need to explain to management and subject matter experts the necessity and methods of disclosing these metrics. At eBay, we have established a cross-functional ESG Council aimed at helping global leaders better understand how ESG disclosures are deeply connected to many aspects of business operations.

As Chief Sustainability Officer, I am well aware of the opportunities and challenges faced by business leaders committed to responsible and sustainable development. Looking ahead to 2024, companies need to prepare for the following three major ESG trends.

Disclose, Disclose, and Disclose Again

One of the most significant trends in ESG operations is the continuously increasing disclosure requirements from various regulatory bodies. For example,California passed two climate risk disclosure bills last year, requiring companies to disclose their greenhouse gas emissions. These bills are separate from the upcomingU.S. Securities and Exchange Commission (SEC) climate disclosure rules, which would require companies to disclose Scope 1 and Scope 2 emissions, as well as Scope 3 emissions—ainclusion that has drawn widespread criticism. In the European Union,the Corporate Sustainability Reporting Directive (CSRD)proposes to require all large and listed companies to conduct ESG reporting, using common standards developed by the European Financial Reporting Advisory Group.

These initiatives aim to improve the transparency, comparability, and reliability of ESG information, and to establish accountability mechanisms by providing useful data to government stakeholders. However, new reporting requirements may pose challenges for companies—they must figure out how to collect and report different types of data, how to comply with multiple sometimes conflicting requirements, and ensure the quality and accuracy of the data.

As an e-commerce company, one of the challenges eBay faces is collecting accurate data for Scope 3 emissions disclosure, because eBay, as a sales platform, does not manufacture any products itself. For eBay, most of its Scope 3 emissions come from emissions generated during the downstream transportation of products sold by sellers and purchased by buyers—this depends entirely on the transportation fleets of different carriers. Although eBay has limited control over these emissions, the responsibility to address this issue is urgent, which is why internal and external cooperation and collaboration are crucial. For example, we recentlypartnered with Etsy and Drawdown Labsto commend the U.S. Postal Service's decision to purchase only electric vehicles starting in 2026.

To stay well-prepared, companies need to adopt a proactive disclosure strategy, identifying the ESG issues most relevant and important to their industry and stakeholders, and investing in systems that support reporting processes and data—such as carbon accounting software. At eBay, this includes issues like recommerce (secondhand goods trading) and sustainable consumption, data privacy and security, greenhouse gas emissions, and supporting entrepreneurs and small businesses.

Beyond meeting reporting requirements, the collection and availability of this data should be viewed as a business advantage—it can provide insights into operations, help identify and avoid potential risks, and uncover hidden opportunities. By deeply analyzing non-financial data, companies can identify potential risks raised by stakeholders in materiality assessments (such as water scarcity or potential supply chain impacts), or gain opportunities through increased disclosure, such as being included in impact investment funds, thereby building relationships with this growing group of investors.

Investors Play a Key Role in Driving ESG Policies

Investors' influence on ESG issues is growing, and this trend will continue to deepen. As eBay's Chief Sustainability Officer, I am part of the Investor Relations team, which allows me to stay closely connected with investors and clearly understand their needs. Investors are increasingly incorporating sustainable business practices into their investment decisions, as they recognize that climate adaptation and preparedness have a material impact on the long-term value and performance of their portfolios.

eBay's investors and shareholders value sustainable and responsible business practices. During my tenure at eBay, there has been a significant shift in the demand for transparency and disclosure. For example:

• Compared to the previous year, the number of investor calls involving corporate governance and sustainability metrics has increased—a trend that has been particularly pronounced over the past 5 years.
• Conversations with investors are two-way, serving both as an opportunity to provide additional context and as a channel to learn about developments in the ESG space from investors.
• Transparency and disclosure of ESG metrics are prerequisites for eligibility for certain impact funds, and are increasingly becoming a regulatory-driven "basic threshold."

According toa survey by the Global Sustainable Investment Alliance, sustainable investment assets reached $35.3 trillion in 2020, accounting for 36% of total managed assets in the five major markets of the United States, Europe, Canada, Australia, and Japan.

Investors are also becoming more outspoken when engaging with companies on climate and social issues, expressing their positions through dialogues, votes, and resolutions. For example, in 2021, shareholders of ExxonMobil, Chevron, and Shell successfully pushedthese oil giants to take more aggressive climate actionand strengthen accountability—a series of landmark votes marking a shift in investor sentiment and efforts.

These investor actions reflect a growing demand for corporate responsibility disclosures, especially on climate-related issues. Climate risks, targets, and progress are often the most common subjects of scrutiny, though in recent years, attention to the "S" (social) part of ESG has increased,including gender equality, pay equity, diversity, representation, and more。

Companies should plan to strengthen ESG reporting, even before the mandatory disclosure requirements mentioned above come into effect, to meet evolving investor preferences. There are alreadymany useful existing frameworks, such as the Task Force on Climate-related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), and the Global Reporting Initiative (GRI), which can provide clear guidance for executing responsible business strategies, performance, and impact. Companies should also proactively engage with investors on sustainability, social, and governance issues, initiating discussions and soliciting feedback during corporate governance calls.

Companies that proactively address these issues rather than ignore them will win investor trust and confidence, thereby gaining support for long-term business goals.

Consumers Care About Sustainability

Companies committed to sustainability are preparing themselves for a changing climate—not just the physical climate, but also the social climate where consumers want to support responsible companies. Recent research shows thatconsumers tend to support sustainable products with their spending, andeBay's latest recommerce reportfound that 93% of sellers said sustainability is "very" or "somewhat" important to them when selling secondhand items. Modern shoppers feel satisfaction from reducing waste and lowering their carbon footprint, but they believe sustainability is not just the consumer's responsibility.

Nine out of ten consumers believe thatit is important for companies to act in a socially and environmentally responsible manner. Although a minority oppose considering sustainability in business, the vast majority of consumers support companies committed to responsible business practices.

Sustainability reporting provides companies with an opportunity to demonstrate their commitment to positive practices that will drive the future development of the business and lay a solid foundation for long-term success. Through reporting, companies can confidently showcase the impact of their sustainability efforts, while keeping in mind the many benefits of ESG reporting and programs that the data shows: improved reputation, promoted innovation, increased efficiency, enhanced resilience, and profitability.