A recent survey by KPMG suggests only 1 in 4 companies feel highly confident in meeting ESG reporting requirements across several jurisdictions.
Businesses are increasingly expecting their strategies to enhance business and financial outcomes in diverse areas, such as M&A, product opportunities, talent retention, and customer loyalty.
Of the leaders surveyed, 43% reported a stronger alignment between their business and environmental goals than five years ago.
M&A efficacy emerged as the top area where environment, social and governance added value, with 41% of leaders saying ESG engagements brought significant financial benefits.
While last year’s KPMG survey indicated a pause in ESG efforts due to economic uncertainty, the recent data reveals 55% ramped up their ESG activities.
KPMG U.S. ESG Leader, Rob Fisher said, “These results underscore that ESG provides businesses with a clear opportunity to differentiate themselves and gain a competitive edge. We found businesses see many levers by which ESG can drive financial value, but that also drives complexity for organising a cohesive, well-understood strategy that can overcome some very real challenges businesses are facing today.”
KPMG U.S. ESG Audit Leader, Maura Hodge, commented, “For many companies, ESG reporting requirements are already here even as we await the SEC’s final rule. While convergence has begun, organisations will undoubtedly struggle to navigate the web of global requirements as we determine the interoperability of the standards. The very cautious confidence among companies on reporting underscores the urgency to align one’s reporting approach with business strategy today.”
Fisher added, “ESG’s wide-ranging impacts and levers make it an incredibly unique coordination challenge for leaders. The risk of falling behind can compound, turning today’s headache into a long-term struggle as competitors pull away. The upcoming reporting requirements should ignite urgency to align one’s reporting with strategy today.”
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