KPMG: How the World's Top Firms Embrace Sustainability

Businesses around the world are gearing up as mandatory sustainability reporting looms.

The latest findings from KPMG's Survey of Sustainability Reporting 2024 highlights how major corporations are aligning with burgeoning ecological mandates.

Impressively, 95% of the G250 — the 250 largest companies worldwide by revenue — now publish their carbon targets, a 15% increase from 2022 alone.

However, there is still room for concern: only 56% have installed a sustainability leader at the helm.

Adam Elman, Sustainability Director at Google, says the report is very much “good news, bad news”.

He says: “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 dual nature of the news, the overarching narrative remains hopeful. 

John McCalla-Leacy, Head of Global ESG at KPMG International 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 mobilising 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.”

What are the six major trends outlined by KPMG?

The arrival of mandatory ESG reporting across various global regions heralds significant changes, with the KPMG report outlining six major trends that are shaping corporate behaviours:

1. Nearly all G250 and many N100 companies, the top 100 companies in numerous countries, are integrating sustainability reporting and carbon target setting into their usual business operations
2. A noteworthy trend is the preparation for the Corporate Sustainability Reporting Directive (CSRD), which requires firms from December 2024 to publish reports if their financial year ends on that date. Some businesses are already aligning themselves with its mandates, like reporting material topics in accordance with the ESRS
3. Double materiality, a critical part of CSRD, is being employed by half of the largest companies to evaluate both societal and environmental impacts and their effect on financial performance
4. Despite the move towards mandatory reporting, many companies are still adhering to voluntary guidelines and standards; the Global Reporting Initiative remains particularly popular among three-quarters of G250 companies
5. The focus on biodiversity has seen a significant uptick, with approximately half of both G250 and N100 companies now incorporating it in their reports, reflecting an increase from one quarter about four years ago
6. The adoption of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations continues to rise, setting the stage for future compliance under new regulatory frameworks like IFRS S2.

A motion towards broader, more impactful sustainability and environmental reporting is evidently in play across major industries worldwide, catalysed by both impending legislation and a collective commitment towards a more sustainable future.

Behind KPMG's survey

The Survey of Sustainability Reporting 2024 is founded on thorough research conducted by KPMG professionals from 58 member firms.

They have examined annual financial, integrated, and ESG/sustainability reports published by the top 100 companies in each country, territory and jurisdiction.

With data collected from 5,800 companies, this report is among the most comprehensive in the series, which has been published since 1993.

Jan-Hendrik Gnändiger, Global ESG Reporting Lead, KPMG International, says: “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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