Nearly all of the world’s largest companies are now engaging in corporate sustainability reporting and setting ambitious carbon reduction targets, according to KPMG’s 2024 Survey of Sustainability Reporting.
The analysis reviewed sustainability reports from 5,800 companies across 58 countries, highlighting that business sustainability reporting has become standard practice, particularly among the G250 (the 250 largest companies globally by revenue). Additionally, four-fifths of the N100 (the top 100 companies in various countries) are now disclosing ESG data.
Preparing for the CSRD
This trend coincides with increasing regulatory requirements, particularly the EU’s Corporate Sustainability Reporting Directive, which will mandate detailed, standardised ESG disclosures. The Directive will first apply to large companies in 2024, followed by medium-sized businesses through 2026, with some firms having until 2029 to submit their first compliant reports.
The report highlights that many European businesses are leading the way in CSRD preparation. Companies are already aligning their reporting with the European Sustainability Reporting Standards (ESRS), which require ESG data to be embedded in annual reports. Furthermore, nearly half of European companies surveyed have begun reporting in line with the EU Taxonomy, which identifies environmentally sustainable activities.
The rise of double materiality
A significant trend emerging from the survey is the adoption of double materiality. This approach considers both a company’s impact on the environment and society, as well as how external factors could affect the company’s financial performance.
The survey reveals that 50 percent of G250 companies are now conducting double materiality assessments; a notable increase from previous years. This trend is closely tied to CSRD requirements, which mandate double materiality assessments for all companies within the Directive’s scope.
Voluntary ESG standards remain prominent
While regulatory frameworks tighten, voluntary ESG reporting standards remain widely adopted. The Global Reporting Initiative (GRI) is the most popular, with three-quarters of G250 companies adhering to GRI standards. Other frameworks, such as the Sustainability Accounting Standards Board (SASB) guidelines and local stock exchange reporting requirements, have also gained traction.
For instance, SASB standards are particularly favoured in the US, while in Saudi Arabia, all surveyed companies follow local stock exchange guidelines. This flexibility allows companies to tailor their reporting frameworks to their regional contexts and specific needs.
The KPMG survey also highlights the growing uptake of Task Force on Climate-related Financial Disclosures (TCFD) recommendations, which focus on improving climate-related financial transparency and investor engagement. Nearly three-quarters of G250 companies now disclose climate-related risks in line with TCFD guidelines, responding to increasing pressure from investors, regulators, and consumers.
Despite strong progress in sustainability reporting, KPMG’s findings reveal ongoing challenges regarding reporting quality. Companies often focus on showcasing positive achievements, such as carbon reduction successes, while underreporting negative environmental or social impacts.
Conclusion
The findings of KPMG’s new research highlight the rapid progress businesses are making toward comprehensive sustainability disclosures. As the CSRD takes effect, it marks a transformative moment for sustainability reporting, particularly in Europe. The growing adoption of double materiality, alongside frameworks like ESRS, GRI, and TCFD, signals a clear shift towards greater transparency and accountability.
However, challenges remain, particularly in ensuring the quality and balance of ESG disclosures. To meet these demands and stay ahead of the curve, businesses must act now to refine their sustainability strategies and reporting practices. Our comprehensive CSRD training equips your team with the essential tools, knowledge, and expertise. From double materiality assessments to actionable reporting frameworks, get prepared to lead in sustainability reporting.Â
