KPMG survey: saving the world in the hands of financiers?

By: Trademagazin Date: 2024. 04. 01. 11:30

According to KPMG’s survey, even companies that have been on the path to sustainability for years are struggling with how to raise the tasks related to sustainability reporting to the decision-making level, properly integrating it into the operation of the organization. The research allows us to conclude that the qualitative reports are increasingly becoming quantitative, as a result of which the relevant tasks are inevitably falling on the people in charge of the financial and controlling areas.

KPMG conducted more than 50 interviews with sustainability leaders and professionals to understand how sustainability-focused organizations operate in general, and ESG reporting disciplines in particular. They examined how these units are currently structured, what makes them successful, and above all, how they plan to develop themselves in the future.

Even the most advanced companies must adapt to increasing ESG reporting requirements, such as the European Union’s Corporate Sustainability Reporting Directive (CSRD).

In more than half of the surveyed companies, the sustainability department is solely responsible for ESG reports. A quarter of companies distribute ESG reports among other departments: in most cases, both the sustainability unit and finance are involved, and some also involve the communications department. In the other companies participating in the research, finance and accounting are solely responsible for ESG reports. At the same time, the majority of those surveyed expect this to remain the trend, as the number of undertakings, the ratios according to the EU Taxonomy, and the externalities to be eroded are increasing.

In almost half of the companies participating in the research, the level of executive compensation (between 16 and 25 percent of it) depends on the fulfillment of sustainability commitments.

The companies that participated in the research usually have relatively small teams working on non-financial reports. More than half of the companies participating in the research employ three or fewer full-time employees in the area of non-financial reporting. According to more than half of them, this number is expected to increase.

The decarbonization of business models and the reduction of carbon dioxide emissions are the topics that are most often included in ESG strategies, according to almost all respondents, they are present to some extent in their thinking.

The next most common ESG topics are equality, inclusion and human rights in the value chain. Although not very common in the strategy, some respondents also recognized the increasing relevance of nature and biodiversity. Regarding ESG business strategy topics not included in the list, eight respondents mentioned health, safety and the environment, four mentioned cyber security and data protection, three mentioned employee well-being, and two mentioned pollution. Topics mentioned once include water conservation, traffic safety, homelessness, and financial awareness.