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Reporting and Resource Allocation
Reporting and Resource Allocation
With reporting emerging as the focal point for most businesses in 2024, edie’s survey uncovered a sense of frustration at the lack of resources available to help sustainability professionals disclose and report. So, are corporates planning to invest in reporting and teams in 2025?
Analysis found that environmental, social and governance (ESG) regulations globally have increased by 155% in the past decade, with 1,255 ESG regulations introduced worldwide since 2011. Indeed, the alphabet soup is on the verge of overflowing, with big-ticket pieces like CSRD adding to the reporting pile for sustainability professionals. Nearly 50,000 companies fall within the scope of the CSRD mandate. It covers all listed companies based in the EU, provided they are large enough in terms of net annual turnover, assets or employee numbers.
A new KPMG report found that four-fifths of the N100, which includes the top 100 companies in various countries, are also now disclosing ESG data. Overall, around 80% of businesses are disclosing ESG data in some capacity.
Much of the frustration comes from the time and complexity of complying with reports, but developments are shaping up to ease the process and improve standardisation. Voluntary disclosure platform CDP, for example, has pledged to make its questionnaires more closely aligned with the mandatory corporate sustainability reporting standards developed by the European Financial Reporting Advisory Group (EFRAG), which then ties into CSRD reporting alongside the European Sustainability Reporting Standards’ (ESRS) climate standard.
It’s a complex jigsaw, but at its heart its about improve data quality and transparency to help investors and stakeholders make informed decisions. As the scrutiny on corporate green claims and data increases, so too does the reporting, but does that mean budgets and teams do as well?
Businesses are focusing on different reporting aspects. From CSRD to nature disclosure through to long-term transition plans, there’s a lot to map and develop, as the table below shows
Q. How much of a priority is your organisation currently placing on each of the following areas of decarbonisation?
With a previous edie Business Tracker finding that the average sustainability team consists of around four members, many are either outsourcing reporting, treating it as compliance rather than value creation, or trying to tackle the data mountain themselves.
A little under half (49%) of respondents to edie’s Business Tracker spent up to 25% of their time in 2024 on reporting and disclosure, with a further 32% spending between 26-50%. A total of 16% spent between 51-75% on reporting and 3% had at least three quarters of the calendar year dedicated to reporting.
Despite the teething pains that comes with new reporting frameworks, legislation is placing a mandate on sustainability for many businesses. Now, directors and the board are coming to the sustainability team asking about things such as CSRD, which has helped create more internal buy-in. This value, however, is not yet being realised as a vehicle for businesses to enhance their own reputations and competitive positioning.
When asked to rank the reasons for disclosing and reporting, 57% stated it was just to comply with regulation. The second choice was that of reputational benefits, followed by appeasing stakeholder demands.
It is clear that expanded teams will not only help deliver on reporting and disclosure requests but create more time and agency to deliver on ambitious net-zero goals. However, 41% of businesses are NOT planning to expand their sustainability team, compared to 32% that are. The remaining 26% of respondents could not disclosure whether they were able to expand their teams.
Even if sustainability teams feel under-valued and under-resourced, reporting is ultimately seen as a benefit. When asked whether reporting and disclosure is helping or hindering the goal of driving climate action, an overwhelming 78% stated YES.
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