'The time is now,' says EY CEO Carmine Di Sibio, as the Big Four corporate accounting firms get serious about ethical governance and endorse official ESG reporting standards

• Leaders of Deloitte, PwC, EY, and KPMG announced Tuesday a new reporting framework for environmental, social, and governance standards (ESGs), The Financial Times' Gillian Tett reports.
• "The time is now for companies to broaden their engagement with stakeholders," Carmine Di Sibio, EY global chairman and CEO, told Business Insider via email.
• ESG criteria measure a company's progress on a range of issues, from the amount of greenhouse gas it produces to the diversity of its boardroom.
• In 2006, when ESG standards were first mentioned by the UN, there was $6.5 trillion in assets under management incorporating ESG issues. As of June 2019, more than $80 trillion of assets under management using ESG standards, per Forbes.

Executives of the "Big Four" accounting firms — Deloitte, PwC, EY, and KPMG — announced Tuesday a new reporting framework for environmental, social, and governance standards (ESGs), the Financial Times' Gillian Tett reports.

ESG standards are a set of criteria used to measure a company's performance on things such as how the company is impacting the environment (like its amount of toxic emissions), how it manages relationships with its employees (does it encourage employees to volunteer), and how the company runs internally (boardroom diversity).

The big four, which dominate in providing auditing and other professional services, have clients that collectively comprise the majority of all public companies.

"The time is now for companies to broaden their engagement with stakeholders," Carmine Di Sibio, EY global chairman and CEO, told Business Insider via email.

"The combined impacts of climate change, COVID-19 and economic inequality contribute to the urgency for businesses to embrace long-term, sustainable value creation and prioritize the needs of people and planet and the creation of broad-based economic prosperity," Di Sibio added.

The World Economic Forum and the International Business Council (IBC), run by Bank of America CEO Brian Moynihan, partnered with the Big Four to make the initiative happen. The move aims to encourage the large global companies in the IBC, about 130 in all, to adopt the ESG standards for their 2021 reporting, per the FT.

Bill Thomas, global chairman and CEO of KPMG International, said in a press release that ESG-focused metrics will help company leaders "make a difference where it counts.

"Reporting on ESG factors like carbon emissions and human rights and other key metrics will not only help inform investors while helping companies control their full corporate value, it has the power to realign capitalism for the benefit of broader society," Thomas said.

ESG issues were first mentioned in the United Nations' inaugural 2006 report on "Principles for Responsible Investment." At the time, there were $6.5 trillion in assets under management incorporating ESG issues. As of June 2019, more than $80 trillion in assets under management incorporate them, per Forbes.

ESG investing has seen a surge this year.

More than $19 billion has flowed into ESG ETFs in 2020, compared to $8 billion last year, Luke Oliver, head of index investing for the Americas at DWS Group, recently told CNBC.