Directors and Senior Managers See Both ESG Reporting Challenges and Benefits
Reporting solutions provider Workiva has released the results of a survey of the “challenges, potential opportunities, and the positives” of ESG reporting. ESG Reporting Global Insights 2022 is based on an online survey of 1,300 senior managers, executives, and directors at companies in 13 countries representing eleven industry sectors. Among other things, Workiva concludes that, “w]hile challenges around communicating ESG corporate value to stakeholders still exist, the findings show clear positive outcomes for businesses who prioritize this reporting.”
Some of the key Workiva findings include:
Most organizations (75 percent) report ESG, climate and sustainability, or corporate social responsibility data. A third of organizations (34 percent) align with the Sustainability Accounting Standards Board framework, 30 percent with CDP, and 29 percent with the Task Force on Climate-Related Financial Disclosures. (As to the use of frameworks among U.S. companies, see The S&P 500 Are (Almost) All in on ESG Disclosure, August 2021 Update.)
More than two thirds (68 percent) of organizations have specific roles assigned to oversee ESG reporting and initiatives. In 38 percent of organizations, ESG reporting is driven by sustainability/ESG and operations/facilities.
About two-thirds of survey respondents (63 percent worldwide, 68 percent in the U.S.) feel unprepared to meet their ESG goals and government and regulatory reporting mandates. The top challenges are “Calculating greenhouse gas protocols to measure scope 1, 2 and 3 emissions,” “Having carbon accounting level data,” and “Communicating corporate value to address investor/stakeholder needs.” (For another perspective on company readiness to report, see Companies are Preparing for Required ESG Disclosure, But Many Have a Lot Left to Do, March 2022 Update.)
While 76 percent of decision makers believe technology is important to compiling and collaborating on ESG data, only 35 percent believe they can use technology and data “very well” to make decisions on advancing ESG strategy.
ESG reporting has a positive business impact. Respondents reported increased customer retention and recruitment (72 percent), better insurance/credit engagement (72 percent), reduction in long-term risk (71 percent), positive media attention and brand awareness (71 percent), and cost savings (71 percent).