• Companies identified between 9 and 93 material impacts, risks, and opportunities (IROs), with impacts dominating (59%).
• Climate disclosures showed significant maturity, with 86% conducting scenario analysis and 62% having net-zero targets.
• Strategic alignment and clarity on double materiality remain major challenges.

ESRS reporting has kicked off strongly in 2025, but early findings from KPMG’s “Real-time ESRS: FAST 50” report highlight significant disparities in how companies approach sustainability reporting.

Dr. Jan-Hendrik Gnändiger, KPMG Global Head of ESG Reporting, notes:

“Our early-stage findings show trends consistent with our experience as advisors and assurance providers.”

Wide variance in reporting practices

Companies varied widely in identifying material IROs—from as few as 9 to as many as 93. Impacts notably outpaced risks and opportunities, comprising 59% of all identified IROs.

Gnändiger explains the complexity:

“These factors could have contributed to companies focusing on the details rather than the company’s strategy and its critical link to material IROs.“

Climate reporting reaches maturity

Climate-related reporting demonstrated greater maturity compared to other areas:

• 86% of companies disclosed climate scenario analyses.
• 62% committed to net-zero targets, primarily aligned with Science Based Targets initiative (SBTi), aiming for 2050.

Strategic disconnect evident

Despite robust disclosures, many companies struggled to clearly link sustainability with overall business strategy.

The European Commission’s Omnibus proposals aim to streamline ESRS reporting, prioritizing quantitative data and clarifying mandatory disclosures while maintaining double materiality.

RELATED ARTICLE: KPMG Named Leader in Asia/Pacific Sustainability/ESG Program Management Services

Gnändiger emphasizes the need for simplicity:

“Our findings support the need for simplification and further guidance, particularly in assessing double materiality.“

Stakeholder engagement and AI readiness crucial

Tailored stakeholder engagement proved most beneficial when conducted via direct interviews or focus groups, contrasting less effective passive methods.

The report also highlights the importance of designing disclosures optimized for AI and human readability:

“Designing the sustainability statement with AI in mind has clear advantages,” the report concludes.

Bottom line:

Companies should reassess their approach to sustainability reporting, ensuring clear alignment with business strategy and enhanced stakeholder engagement.

Read the full report here.

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