Deloitte Survey: Public Firms Worldwide Make Major Progress in Sustainability Reporting

July 18, 2024 - In a rapidly evolving landscape of corporate responsibility, the 2024 Sustainability Action Report has unveiled significant insights into the state of Environmental, Social, and Governance (ESG) reporting. Conducted by Deloitte, the survey gathered responses from 300 executives at publicly owned companies, highlighting the growing importance of sustainability in business strategy.

Main Takeaways from the 2024 Report

The report emphasizes that ESG reporting has become a strategic priority for organizations, with an impressive 98% of respondents reporting progress toward their sustainability goals. A notable trend is the establishment of cross-functional ESG councils, which facilitate collaboration across departments. Additionally, the appointment of Chief Sustainability Officers (CSOs) has surged, reflecting a commitment to overseeing and enhancing ESG initiatives.

Executives identified several expected outcomes from improved ESG reporting. The top anticipated benefits include reduced risk (53%), increased efficiencies and return on investment (ROI) (52%), and enhanced talent attraction and brand reputation (51%). These findings underscore the dual internal and external advantages of robust ESG practices, as companies recognize the potential for improved operational efficiencies and strengthened stakeholder trust.

Moreover, the report highlights the influence of regulatory frameworks on sustainability reporting. With clearer guidelines emerging from the Corporate Sustainability Reporting Directive (CSRD) and the Securities and Exchange Commission (SEC), organizations are urged to adapt swiftly to meet these requirements. Companies that have proactively engaged in sustainability reporting are already reaping significant benefits, showcasing the importance of early action in this domain.

Changes in Sustainability Reporting Since December 2022

Since the previous survey published in December 2022, the state of sustainability reporting has undergone a remarkable transformation. Organizations now possess greater clarity regarding the expectations for reporting on climate-related risks, driven by evolving regulations and standard-setting initiatives. The introduction of frameworks such as the International Sustainability Standards Board (ISSB) standards and the Taskforce on Nature-related Financial Disclosures (TNFD) has expanded the scope of reporting beyond climate to include biodiversity and other critical areas.

The report indicates that many companies have moved away from a "wait and see" approach, with over half of respondents reporting the creation of cross-functional ESG working groups—up significantly from just 21% in March 2022. This shift reflects a growing recognition of the need for integrated sustainability strategies and the importance of accountability at the board level, with 44% of organizations now reporting board oversight of ESG initiatives.

Full 2024 Sustainability Action Report is available at https://www2.deloitte.com/us/en/pages/audit/articles/esg-survey.html.