KPMG: The State of Sustainability at the World’s Top Firms

KPMG’s Survey of Sustainability Reporting 2024 has found that companies worldwide are preparing well for the arrival of mandatory reporting on sustainability.

But, although 95% of G250 companies publish carbon targets (up 15% since 2022), only 56% of the same cohort have a sustainability leader.

Adam Elman, Sustainability Director at Google, pointed out on LinkedIn that the report is very much “good news, bad news”.

He wrote: “Good news: a new report from KPMG highlights that 95% of the world's top 250 companies now publish carbon targets, 96% report on sustainability and 56% have a sustainability leader.

“Bad news: That means 5% don't have carbon targets, 4% don't report on sustainability and 44% don't have a sustainability leader.”

‘We can do it’

Despite the worrying elements of the report, overall the picture is positive, says John McCalla-Leacy, Head of Global ESG, KPMG International.

In the report’s introduction, he says: “With more sustainability leaders at the boardroom table than ever before, we continue to roll up our sleeves and confront our global commitments head-on.

“We are making noticeable progress with ESG reporting in a way that supports short-term and long-term business objectives.”

John adds that KPMG appreciates how a “robust sustainability reporting ecosystem helps businesses not only measure progress on executing their ESG strategy, but also drive value while mobilizing capital markets to help support the development of ever-increasing, much-needed solutions to the many societal issues we face”.

He concludes: “We can do it. We are doing it. Let’s keep going.”

Six major trends

The report highlights six major trends as companies come to terms with the looming arrival of mandatory ESG reporting in many parts of the world.

These are:

1 - Reporting on sustainability and setting carbon targets has become part of business as usual

Sustainability reporting and carbon targets have been adopted by almost all of the G250 global group of companies and four-fifths of the N100 groups

2 - Some companies have already changed practices in advance of the move to mandatory reporting on sustainability under the EU’s CSRD

The Corporate Sustainability Reporting Directive applies to an initial group of companies for reports on financial years ending from 31 December 2024, with some having until 2029 to publish their first compliant reports. However some companies, mainly European-headquartered or with activities in Europe, are already preparing for CSRD such as by reporting material topics in accordance with the ESRS

3 - Double materiality, required under CSRD, is now used by half of the largest companies

Nearly four-fifths of the G250 and N100 groups use materiality assessments. The larger G250 companies are more likely to use double materiality processes that assess impacts on society and the environment and how this affects their financial performance.

4 - Despite moves toward mandatory reporting, voluntary guidelines and standards remain widely used

Global Reporting Initiative remains the most popular standard, with three-quarters of G250 companies using it. While voluntary guidelines and standards remain widely-used during this transitional period, this could change as mandatory reporting expands over the next few years

5 - Reporting on biodiversity continues to increase

Around half of both the G250 and N100 groups now report on biodiversity, up from around one-quarter four years ago, although growth has been slower in the last two years

6 - Adoption of Task Force on Climate-related Financial Disclosures (TCFD) recommendations has continued to increase, with IFRS S2 ready to rise.

About the survey

The Survey of Sustainability Reporting 2024 is based on detailed research by KPMG professionals representing 58 member firms.

For each country, territory or jurisdiction, they have reviewed annual financial, integrated and ESG/sustainability reports published by the largest 100 companies.

With data from 5,800 companies, this report is jointly the most comprehensive in the series, which has run since 1993.

Jan-Hendrik Gnändiger, Global ESG Reporting Lead, KPMG International, said: “While next year will see many large companies meeting mandatory sustainability reporting requirements, our research shows that many others are commencing or increasing their work in this area ahead of time.

“There are excellent reasons to do so, whether to prepare for regulatory compliance or to offer better information to investors, customers, employees, regulators or other stakeholders.

“KPMG member firms are ready to support an activity that has the potential for significant environmental, societal and economic benefits.”

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