Nine in 10 ESG professionals believe reporting and data boost competitiveness
Nine in 10 ESG practitioners believe that strong reporting and data collection will give their organisation a competitive advantage over the coming years as new regulations begin to pile up.
According to the 2023 Global ESG Practitioner Survey, commissioned by Workiva, published on Tuesday (22 August), a growing number of ESG professionals believe that reporting will play a prominent role in driving competitiveness for their organisation.
The survey, which polled more than 900 professionals across the globe, found that 90% believe that having a strong ESG reporting programme will give their organisations a competitive advantage in the next two years.
The survey found that the longer a company has been publishing ESG reports, metrics and data, the more likely they are to have generated cost savings and improved brand awareness and reputation. This was evident for companies that have been reporting for more than five years compared to corporates that have been reporting on ESG issues for less than two years.
Businesses are now adding dedicated roles to help with ESG reporting. Almost three-quarters (71%) of respondents said that three or more internal teams help deliver ESG reports, while 74% claim that at least one employee has been appointed to oversee ESG metrics – a 6% increase on last year.
“It’s no secret ESG is receiving heightened attention in boardrooms or that increasingly complex frameworks, standards and regulations are presenting new challenges in ESG reporting,” London Business School’s professor of finance Alex Edmans said.
“What struck me from the survey results is the dichotomy between practitioners of all levels agreeing they find value in ESG reporting while managers in the trenches are saying their companies are not applying the same diligence to ESG reporting as they do to financial reporting.”
Edmans noted that there is a perception gap based on ESG performance depending on who within the business was polled.
While 62% of C-suite executives “strongly agree” that their companies apply the same level of diligence to ESG reporting as they do to financial reporting, this number drops to 32% for senior managers and management.
Additionally, 87% of executives state that someone has been appointed to an ESG-specific role, compared to 68% of managers. Workiva warns that this could suggest a “significant disconnect” between senior leadership and staff, which could impact corporate abilities to comply with emerging regulations.
Indeed, 74% of organisations expect to have to comply with two or more global regulations moving forward, while 47% expect to comply with more than three.
These range from the ASX Corporate Governance Council in Australia to the UK Corporate Governance Code as well as the US Securities Exchange Commission and the Corporate Sustainability Reporting Directive (CSRD).
Research has found that global ESG regulations have increased by 155% in the last 10 years as nations get serious about climate legislation.
Sustainability data and technology company ESG Book analysed the World Business Council for Sustainable Development’s (WBCSD), Reporting Exchange platform, which covers more than 2,400 ESG regulations covering more than 80 jurisdictions worldwide, all of which are updated in real-time.
The analysis found that ESG regulations globally have increased by 155% in the past decade, with 1,255 ESG regulations introduced worldwide since 2011. In comparison, 493 regulations were published between 2001 and 2010.
Additionally, 95% of respondents believe that having “adequate” technology is crucial to the ESG reporting process – which is a 19% increase compared to last year’s survey – while 97% agree that data plays an essential role in helping corporates advance their ESG strategies.