Do ESG Disclosures Capture Systemic Sustainability Risks? Integrating Life Cycle Sustainability Assessment into ESRS-Based Sustainability Accounting

This study examines whether ESRS-based ESG disclosures capture a life cycle perspective and whether they provide sufficiently risk-relevant information for sustainable finance decision-making. Drawing on Life Cycle Sustainability Assessment (LCSA), the paper analyzes the extent to which sustainability reports of major European non-financial enterprises reflect upstream, operational, downstream, and end-of-life impacts. The study applies qualitative comparative content analysis to the 2024 sustainability disclosures of Enel, Unilever, and Siemens AG. The findings indicate that ESG reporting remains predominantly entity-centered, indicator-based, and dimensionally segmented. Although value chain impacts and circular economy initiatives are increasingly disclosed, comprehensive cradle-to-grave integration remains limited. Environmental life cycle elements are more visible than social and economic dimensions, while cross-dimensional integration across life cycle stages is weak. These limitations may reduce the ability of ESG disclosures to capture systemic sustainability risks, including transition risks, supply chain vulnerabilities, and long-term value chain externalities. In response, the study proposes an LCSA–ESRS Operationalization Model based on boundary reconfiguration, stage-based indicator mapping, dimensional harmonization, and an accounting translation layer. The paper contributes to sustainability accounting and sustainable finance by showing how life cycle thinking can enhance the decision-usefulness, risk transparency, and systemic coherence of ESRS-based reporting.