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  • Daniel Goelzer

Many Companies Plan to Invest in ESG Reporting During 2023

Deloitte has released Sustainability action report: Survey findings on ESG disclosure and preparedness, a report on the results of a survey and interviews conducted in August and September 2022 of senior finance, accounting, sustainability, and legal executives at companies with at least $500 million in annual revenue concerning their companies’ environmental, social, and governance (ESG) strategy and disclosures. This report updates a similar survey conducted in 2021. See Companies are Preparing for Required ESG Disclosure, But Many Have a Lot Left to Do, March 2022 Update.


The 2022 survey found considerable progress on disclosure readiness, along with plans to make further investments in ESG disclosure technology. Sixty-two percent of those surveyed believe their company is “already prepared or currently undertaking extensive preparations” for the expected adoption of SEC climate change disclosure requirements. Nearly all of the companies represented in the survey (99 percent) anticipate investing in new technologies and tools in order to meet stakeholder ESG expectations and future regulatory requirements. About half of respondents (47 percent) said their companies are “very likely” to make such investments in the next 12 months, while 52 percent are “somewhat likely” to invest in the coming year.


Other findings of the 2022 Deloitte survey include:

  • Cross-functional ESG strategy councils are becoming standard practice. Fifty-five percent of respondents said their company had a cross-functional ESG council or working group to drive ESG strategic attention, almost triple the 21 percent that had such a group last year. An additional 42 percent are taking steps to establish an ESG group, while the remaining 3 percent are “making plans” to do so. No respondent said their company had no such committee and no plans to create one. Consumer Products and Life Sciences and Health Care are the industries in which cross-functional ESG councils are most common.

  • Readiness to disclose greenhouse gas (GHG) emissions is increasing, but Scope 3 remains a major challenge. Sixty-one percent of companies reported being prepared to disclose Scope 1 GHG emissions (i.e., direct emissions from the company’s operations), up slightly from 58 percent last year, while 76 percent are prepared to disclose Scope 2 GHG emissions (i.e., emissions from the generation of purchased power), an increase from 47 percent in 2021. However, only 37 percent of respondents are currently prepared to disclose Scope 3 emissions (i.e., emissions from the company’s supply chain and from product usage), a modest increase from 31 percent in 2021. The majority of companies (86 percent) reported challenges measuring Scope 3 GHG emissions, with the main challenges being lack of confidence in data received from vendors (51 percent) and lack of data availability (41 percent). The Life Sciences and Health Care industry is most prepared for Scope 3 GHG emissions disclosure.

  • TCFD and SASB are the most popular ESG reporting frameworks, but most companies use more than one. The recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) (56 percent) and the standards of the Sustainability Accounting Standards Board (SASB) (55 percent) are the most frequently used ESG disclosure frameworks, followed closely by the Greenhouse Gas Protocol (50 percent), the principles of the International Integrated Reporting Council (48 percent), and the Global Reporting Initiative (47 percent).

  • Chief sustainability officers and board ESG committees are becoming more common. A plurality of respondents, 43 percent, said that ESG disclosure management responsibility was lodged with a chief sustainability officer. CFOs came in second at 38 percent. (Respondents could identify more than one person as having ESG disclosure management responsibility.) In contrast, last year 54 percent said that the executive leadership team as a whole was responsible for ESG disclosure management; that percentage declined to 30 percent in 2022. Various board-level bodies were identified as having ESG oversight responsibility: ESG/sustainability committee (55 percent, up from 41 percent in 2021), audit committee (30 percent, down from 39 percent in 2021), nominating and governance committee (37 percent, down from 39 percent in 2021), and full board (30 percent, down from 37 percent in 2021).

  • External assurance over ESG disclosure is becoming the norm. Nearly all (96 percent) of survey respondents said that their company plans to seek – or continue to obtain -- external assurance over ESG disclosures for the next reporting cycle. Sixty-one percent have previously obtained external assurance and will continue to do so, while 35 percent will seek external assurance for the first time. The remaining four percent plan to attain external assurance readiness. (Unlike last year’s survey, the 2022 survey apparently did not address what ESG disclosures are or will be subject to assurance nor what types of professionals are being utilized to provide assurance.)

  • The accuracy of ESG data is a significant concern. Thirty-five percent of survey respondents cited the accuracy and completeness of sustainability data as the top disclosure challenge, up from 25 percent in 2021. Another 25 percent cited access to data as the greatest challenge, a slight decrease from 32 percent in 2021. Companies that are obtaining external assurance over ESG disclosures are more likely to see challenges with data quality than companies that will obtain external assurance for the first time this year (40 percent v. 27 percent). Thirty-seven percent of respondents are starting to apply the COSO internal control framework to their ESG reporting process.

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