The time has come: KPMG Survey of Sustainability Reporting 2020
The KPMG Survey of Sustainability Reporting 2020
In the 11th edition of the KPMG Survey of Sustainability Reporting, KPMG professionals reviewed sustainability reporting from 5,200 companies in 52 countries and jurisdictions, in the most extensive survey in the series to date. The companies surveyed also included the top 100 companies by revenue in each of the 52 countries and jurisdictions researched.
The survey examined global trends in sustainability reporting, offering insights for business leaders, company boards, sustainability professionals, investors, asset managers and ratings agencies. Based on several months of research by KPMG sustainability professionals who analysed thousands of corporate reports and websites, the survey focused on three key aspects of sustainability reporting:
- Reporting on the risks of biodiversity loss
- Reporting on climate-related risk and carbon reduction
- Reporting on the UN Sustainable Development Goals (SDGs)
Key global trends in sustainability reporting the survey highlighted:
- 80% of companies globally now report on sustainability: This underlying global sustainability reporting rate has risen by 5% since the last KPMG survey in 2017, from 75 to 80 percent.
- Third-party assurance of sustainability information has become a majority business practice: The number of companies investing in independent third-party assurance of their sustainability information exceeds 50%, for the first time since the KPMG survey began in 1993.
- Americas lead in sustainability reporting: The sustainability reporting rate in the Americas, comprising North America and Latin America, has increased by 7% since 2017 to an impressive 90 percent of companies reporting.
- GRI remains the dominant global standard for sustainability reporting: GRI remains the most commonly used sustainability reporting standard, used by approximately two-thirds of the 5,200 companies surveyed and around three-quarters of the world’s 250 largest companies.
- Almost all industry sectors exceed 70 percent reporting rate: In 2020, at least 70 percent of the 5,200 companies surveyed reported on sustainability in all industries, except for the retail sector which also lagged in 2017.
As regards the survey’s three focus areas, the findings were as follows:
- Reporting on the risks of biodiversity loss:
- Few companies currently disclose risks from biodiversity loss: Only around one-quarter of companies surveyed at high or medium risk from biodiversity loss currently disclose that risk in their corporate reporting.
- Mining leads in disclosure of biodiversity risk: The mining sector currently stands alone as the only at-risk sector in which a majority of companies report on the risks they face from biodiversity loss.
- Latin America leads while North America lags in biodiversity risk reporting: Almost one-third of Latin American companies surveyed reported risks from the loss of biodiversity. By contrast, North American companies had the lowest rates of biodiversity risk reporting.
- Reporting on climate-related risk and carbon reduction:
- More companies acknowledge the financial risks of climate change: The number of companies acknowledging the risk of climate change in their financial reporting has increased significantly since KPMG’s last survey in 2017, to around 40%.
- North American companies lead in acknowledging climate risks in financial reporting: Regionally, North American companies were the most likely to acknowledge climate risk in their financial reporting – the only region where a majority of companies did so.
- One in five companies reports in line with TCFD (Task Force on Climate-related Financial Disclosures) recommendations: Almost one in five of the 5,200 companies surveyed (18 percent) and over one-third of the world’s 250 largest companies (37 percent) reported in line with the recommendations. North America and Europe lead for reporting in line with TCFD.
- The majority of companies globally have carbon targets in place: The survey revealed a notable increase since 2017 in the number of companies disclosing carbon reduction targets, with two-thirds of the 5,200 companies surveyed and three-quarters of the world’s 250 largest companies now doing this. There is also a growing trend to link corporate carbon targets to global climate goals.
- Reporting on the UN Sustainable Development Goals (SDGs):
- The SDGs have a strong and growing profile in sustainability reporting: A significant majority of companies – over two-thirds (69 per cent) of the 5,200 companies surveyed and almost three-quarters (72 percent) of the world’s 250 largest companies – now connect their business activities to the SDGs in their corporate reporting.
- SDG reporting is mostly unbalanced and often disconnected from business goals: Corporate reporting on the SDGs focused almost exclusively on companies’ positive contributions towards achieving the goals, lacking transparency of their negative impacts.
- Companies focus on economic growth and climate SDGs but largely ignore biodiversity: The survey showed wide disparity and no clear pattern in the number of SDGs that companies prioritised as a focus for their businesses, with few companies prioritising the two SDGs that focus on biodiversity: SDG 14 and SDG15.
78% of the world’s 250 largest companies report in accordance with the GRI Standards
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References:
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