Sustainability reporting now business as usual, KPMG research reveals

Sustainability reporting has become part of business as usual for almost all of the world’s largest 250 companies, and a large majority of the top 100 companies in each country, territory or jurisdiction, according to a survey by KPMG.

The latest KPMG Survey of Sustainability Reporting looks at the reporting practices of 5,800 companies – comprised of the largest 100 companies in each of 58 countries. It finds that 79% of the world’s largest 250 companies report on sustainability, 80% publish a carbon target, and 46% have a sustainability leader. For all companies in the research, 96% report on sustainability, 95% publish a carbon target, and 56% have a sustainability leader.

KPMG says the last two years have seen significant increases in the proportion of companies publishing carbon reduction targets, and while the proportion of companies reporting on biodiversity remains lower, it has similarly increased since 2022.

The survey sees six major trends:

• 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 Corporate Sustainability Reporting Directive (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.

Dr Jan-Hendrik Gnändiger, global ESG reporting lead, KPMG International, said: “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, such as by conducting double materiality assessments and aligning voluntary reporting with its disclosure requirements.”

The survey reveals that the top countries by proportion of companies reporting on ESG and sustainability are Japan, Malaysia, Singapore, South Africa, South Korea, Thailand and the US (100%), followed by Taiwan (99%) and Australia, Sweden and the UK (98%).

“ESG innovation can help us positively modify our impacts, report on them with compliance and speed, support markets by directing capital to the most sustainable companies and deepen our well of knowledge,” said John McCalla-Leacy, head of global ESG KPMG International, adding: “We are making noticeable progress with ESG reporting in a way that supports short-term and long-term business objectives.”

According to the survey, the most popular guidelines and standards remain those run by the Global Reporting Initiative (GRI). It reveals that GRI usage has risen to 71% (up three percentage points on 2022), while among the 250 largest multinationals (the G250) GRI adoption is steady at 77%.

GRI continues to be the most widely used by companies across all regions: Asia Pacific (75%), Europe (71%), Americas (70%), and Middle East & Africa (64%). The countries with the highest GRI adoption rates by leading companies are Taiwan (100%), Singapore (97%), Spain, Japan and South Korea (all 94%).

GRI said there is growing application of ‘double materiality’ assessments, now undertaken by half of the G250, indicating an increased understanding of the need to disclose socio-environmental impacts in addition to financial risks and opportunities. GRI also noted that the survey shows there are signs of early adoption of the newly available European Sustainability Reporting Standards, and the International Sustainability Standard Board’s IFRS-S2.

Cristina Gil White, interim CEO of GRI, said: “It is hugely encouraging that a growing number of leading companies around the world – over 70% – are using the GRI Standards. Sustainability reporting is more relevant than ever. Understanding and disclosing material topics is a crucial step in developing a robust sustainability strategy, informing the wider business strategy and, of course, managing risks and unlocking value.”

She added: “It is also clear that the advent of new regulations and disclosure expectations, which the KPMG survey is starting to reflect, will further mainstream the practice of sustainability reporting. The good news for the thousands of GRI reporting companies is that they are well prepared to also apply other standards, and GRI will help them on their disclosure journey.”