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The move to mandatory reporting: KPMG Survey of Sustainability Reporting 2024
- Carbon targets adoption surges: 95% of the G250 companies now publish carbon reduction targets (up from 80% in 2022).
- Sustainability leadership grows: 56% of the G250 companies now have a sustainability leader in place (2022: 45%).
- Executive pay linked to sustainability: 30% of the top 100 companies consider sustainability in leadership pay (2022: 24%).
With mandatory sustainability reporting on the horizon, KPMG’s latest survey reveals a remarkable surge in global businesses integrating ESG practices into their operations. Carbon reduction targets, sustainability leadership roles, and biodiversity reporting are becoming mainstream practices among the world’s largest companies.
Six major trends from the report
- Reporting on sustainability and setting carbon targets has become part of business as usual.
- Some companies have already changed practices in advance of the move to mandatory reporting on sustainability under the EU’s CSRD.
- Double materiality, required under CSRD, is now used by half of the largest companies.
- Despite moves toward mandatory reporting, voluntary guidelines and standards remain widely-used.
- Reporting on biodiversity continues to increase.
- Adoption of Task Force on Climate-related Financial Disclosures (TCFD) recommendations has continued to increase with IFRS S2 ready to rise.
Sustainability and Carbon Targets
The 2024 KPMG survey highlights that sustainability reporting is now “business as usual” for the majority of large corporations. Among the G250:
- Nearly 95% report carbon reduction targets.
- More than 80% perform materiality assessments, with half using double materiality frameworks, as required under the EU’s Corporate Sustainability Reporting Directive (CSRD).
Preparing for Mandatory Reporting
European-headquartered companies are leading the way in aligning with upcoming regulations. Nearly half already disclose material topics following the EU Taxonomy, with many adopting the ESRS standards.
Standards and Guidelines
Despite the rise of regulatory mandates, voluntary frameworks remain popular:
- GRI: Utilized by 75% of G250 companies.
- TCFD: Nearly three-quarters of G250 companies disclose climate risks under these recommendations.
- Adoption of SASB standards and regional stock exchange guidelines continues to grow.
Biodiversity Reporting
Biodiversity reporting has doubled over the past four years, with adoption narrowing regional disparities. Around 50% of G250 and N100 companies now report on biodiversity.
The Road Ahead
As the world grapples with climate, social, and governance challenges, transparency and proactive ESG reporting are becoming essential. KPMG’s analysis suggests that companies integrating sustainability into their business models are better positioned to create long-term value while addressing global issues.
Expert Insight
John McCalla-Leacy, Head of Global ESG at KPMG International, emphasized:
“We are making noticeable progress with ESG reporting in a way that supports short-term and long-term business objectives… We can do it. We are doing it. Let’s keep going.”
Jan-Hendrik Gnändiger, Head of Global ESG Advisory, added:
“Mandatory sustainability reporting is nearly upon us. The EU is phasing in its CSRD over several years but 2024’s KPMG Survey of Sustainability Reporting suggests that many companies are adopting its measures before they are required to do so.”
Conclusion
The KPMG 2024 Survey of Sustainability Reporting underscores the rapid adoption of ESG reporting practices among the world’s largest companies. While significant progress has been made, particularly in carbon and climate-related reporting, challenges remain in achieving balanced, impactful disclosures across environmental, social, and governance pillars.
Read the full KPMG Survey of Sustainability Reporting 2024 here
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