KPMG’s “Survey of Sustainability Reporting 2024” provides an in-depth analysis of how the world’s leading companies are integrating Environmental, Social, and Governance (ESG) factors into their operations. The report examines the sustainability reporting practices of the top 250 global companies (G250) and a broader group of 5,800 companies across 58 countries (N100), offering valuable insights into current trends and areas for improvement.
Key Findings
- Widespread Adoption of Sustainability ReportingThe survey reveals that 96% of G250 companies now publish sustainability reports, indicating that such reporting has become standard practice among the world’s largest corporations. This widespread adoption reflects a growing recognition of the importance of transparency in ESG matters.
- Prevalence of Carbon Target SettingAn encouraging 95% of G250 companies have established carbon reduction targets, up 15% since 2022. This trend demonstrates a heightened commitment to addressing climate change and aligns with global efforts to reduce greenhouse gas emissions.
- Leadership in SustainabilityDespite the progress in reporting and target setting, only 56% of G250 companies have appointed dedicated sustainability leaders. This gap suggests that while sustainability is on the corporate agenda, there is room for strengthening leadership to drive comprehensive ESG strategies.
Major Trends Identified
- Integration of Double Materiality AssessmentsApproximately 50% of G250 companies employ double materiality assessments, evaluating both the impact of ESG factors on financial performance and the company’s impact on society and the environment. This approach is essential for comprehensive sustainability reporting and is a requirement under the European Union’s Corporate Sustainability Reporting Directive (CSRD).
- Adoption of Voluntary Reporting StandardsThe Global Reporting Initiative (GRI) remains the most widely used standard, with 75% of G250 companies adhering to its guidelines. The continued reliance on voluntary standards highlights the need for harmonization as mandatory reporting requirements become more prevalent.
- Increased Focus on BiodiversityReporting on biodiversity has risen, with about half of both G250 and N100 companies addressing this critical issue, up from one-quarter four years ago. This increase reflects a growing awareness of the importance of biodiversity in sustainability agendas.
- Implementation of TCFD RecommendationsThe adoption of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations has continued to grow, preparing companies for forthcoming standards like the International Financial Reporting Standards (IFRS) S2. This progression underscores the importance of transparent climate-related financial reporting.
Implications for Businesses
The survey indicates that sustainability reporting is becoming “business as usual” for major corporations. However, the absence of dedicated sustainability leadership in a significant portion of companies suggests that integrating ESG considerations into core business strategies remains a work in progress.
As regulatory frameworks like the EU’s CSRD come into effect, companies must enhance their reporting practices to comply with mandatory requirements. The shift towards double materiality assessments and the adoption of comprehensive reporting standards are critical steps in this transition.
Conclusion
KPMG’s 2024 survey highlights significant advancements in sustainability reporting among the world’s top firms. While the integration of ESG factors into corporate strategies has improved, the need for dedicated leadership and standardized reporting practices persists. As global regulations evolve, companies must continue to adapt, ensuring that sustainability remains at the forefront of their business agendas.