Only 29% of companies ‘feel ready to have ESG data assured’

A survey of companies has found that just 29% feel ready to have their environmental, social and governance (ESG) data independently assured.

This is “despite looming regulatory deadlines” facing companies globally, warms KPMG, which has carried out the research.

The latest findings from its ESG Assurance Maturity Index also show that lack of readiness for the deadlines “is virtually unchanged” from nine months ago when the Index reported its initial findings.

All firms anticipate they will be required to provide ESG disclosures over the next one to two years through standards including the IFRS Foundation’s International Sustainability Standards Board (ISSB) standards, the EU’s Corporate Sustainability Reporting Directive (CSRD) and the U.S. SEC’s climate rules.

The survey was conducted among 1,000 senior executives and board members at firms across a raft of industries, global regions and revenue sizes.

Among respondents 29% are classified as leaders who are ready to meet ESG reporting requirements, 46% are at an advanced stage and 26% are labelled beginners, who are at a less advanced stage.

‘Concerted action is needed’

KPMG warns of an emerging gap ESG reporting between leaders and beginners.

While ESG reporting readiness scores among leaders and ‘advancers’ have increased, they have fallen among beginners, who are “reaching the point where concerted action is needed”.

KPMG global head of audit Larry Bradley said: “Getting ready for ESG assurance is a journey – and companies are finding that, the further they get in that journey, the more there is to do and learn.

“The goal-line is continually evolving. That is why progress may appear slow, even though many companies have truly been taking significant steps.

“This effort will pay off – boards are increasing their focus on it and leaders are reporting a growing range of benefits as the discipline involved in getting ready for ESG assurance permeates across systems, processes, controls and governance.”

Among other findings are that the higher the company’s revenue the more likely it is to be at an advanced stage in its ESG assurance. France firms are the readiest, with Germany in second place and Japan in third.

Increased market share, falling costs and new business models are seen as the biggest benefits of robust ESG reporting, the survey also found.

Meanwhile, a survey by PwC has found that 63% of firms surveyed feel “very or extremely confident” to meet the EU’s CRSD. The first set of companies are due to report by the end of the year,

Data availability and staff capacity are among obstacles to implementing the requirements, said respondents.

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