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  • Daniel Goelzer

Companies are Preparing for Required ESG Disclosure, But Many Have a Lot Left to Do

On March 14, Deloitte released the results of ESG executive survey: Preparing for high-quality disclosures, a survey conducted of 300 senior finance, legal and sustainability executives concerning their companies’ readiness to provide environmental, social, and governance (ESG) disclosures. The survey findings provide insight into the ability of companies to meet the demands of new ESG disclosure requirements and are especially significant in light of the SEC’s climate change disclosure proposals (see SEC Unveils its Climate Change Disclosure Proposals in this Update). According to Deloitte’s press release, “Finance professionals will look to focus their efforts on improving data quality, governance, and technology resources. However, the finance leaders polled said they are unsure how to do so in a consistent way.”


Key findings of the Deloitte survey include:

  • Data preparedness. Thirty-two percent of survey respondents said that ESG data availability was their greatest challenge, while 25 percent cited data quality. Eighty-nine percent of respondents reported that their organization was likely to enhance its ESG control environment, while 92 percent believed that their organization needed to invest more in technology to address demand for consistent and reliable ESG measurement, reporting and disclosure.

  • Disclosure readiness by ESG topic, including GHG emissions. The topics as to which respondents were “most confident” about their company’s ability to make disclosure were human capital management (30 percent), climate change (24 percent), board diversity (24 percent), and cyber risk governance (22 percent). As discussed in this Update, the SEC has proposed both cybersecurity and climate-related disclosures, and the latter would include greenhouse gas (GHG) emissions. Fifty-eight percent of respondents said that their company was currently prepared to disclose Scope 1 GHG emissions, while 47 percent are prepared to disclose Scope 2 emissions. However, only 31 percent are prepared to disclose Scope 3 emissions.

  • Cross-functional ESG strategy. Only 21 percent of respondents said their company had a cross-functional ESG council or working group to drive ESG strategic attention; however, 57 percent are actively working to establish such a group, while another 19 percent are “making plans” to do so. Only 3 percent said their company had no such committee and no plans to create one.

  • ESG governance oversight. Fifty-four percent of respondents said the executive leadership team was responsible of ESG governance oversight. Various board-level bodies were also identified as having oversight responsibility: ESG/sustainability committee (41 percent), audit committee (39 percent), nominating and governance committee (39 percent), and full board (37 percent).

  • Staffing adequacy. Only 17 percent of respondents were “completely confident” that their organization is properly staffed to meet the demands of ESG disclosure; another 45 percent were “mostly confident”. The remaining respondents ranged from “somewhat confident” to “not at all confident.” Concerns about staff resources are higher among those closest to the frontline. Ninety-one percent of non-C-suite executives were not completely confident regarding staff resources, compared to 77 percent of executives in C-suite positions.

  • Assurance over ESG disclosures. A total of 299 companies represented in the survey currently disclose ESG performance, and 298 obtain assurance over some of these disclosures. The top three areas as to which companies obtain assurance are diversity, equity, and inclusion (53 percent), greenhouse gas emissions (49 percent), and health and safety metrics (44 percent). Among those that obtain assurance, 41 percent use their financial statement auditor, 38 percent use another CPA or chartered accountant, and 21 percent use a non-CPA/chartered accountant provider. (For more information on current ESG assurance practices, see The S&P 500 Are (Almost) All in on ESG Disclosure, August 2021 Update.)

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