Mark Segal, ESGToday.com, October 30, 2024
A majority of company finance leaders globally say that they are concerned about perceived greenwashing risks from sustainability reporting in their industries, and most do not believe that their organizations will hit their major sustainability ambitions, as nearly all report problems with the integrity of their nonfinancial data, according to a new survey released by global professional services firm EY.
For the report, EY’s 2024 Global Corporate Reporting Survey, EY surveyed 2,000 finance leaders including CFOs and financial controllers across 30 countries globally, in addition to 815 institutional investors.
The report comes as companies are facing increasing pressure to provide high-quality sustainability reporting, both from regulators, as well as from investors, with the survey finding that more than two-thirds (69%) of finance leaders reporting that investors are asking more questions over the past two years about nonfinancial value drivers, with sustainability as the most prominent area of focus.
Investors agree that they are gearing up to increase focus on sustainability issues, with 43% now reporting that they employ full-time sustainability analysts, and 25% anticipating that the number of sustainability analysts in their organizations will be “increasing a lot” over the next 2 years.
As pressure to provide sustainability-related information to investors builds, however, the survey found that finance leaders appear to lack confidence in their organizations’ sustainability reporting capabilities, with 96% reporting some problems with the nonfinancial data that they receive for reporting, and 55% believing that their industries’ sustainability reporting lacks credibility and risks being perceived as including elements of greenwashing.
The top nonfinancial data problems reported by finance leaders include varying data formats, cited by 39%, data inconsistencies (35%), incomplete data (34%) and unclear data definitions (33%). Other challenges included incorrect and out-of-date data, with only 4% reporting not encountering any of these problems.
Additionally, less than half of finance leaders reported that they believe that their organizations are very likely to hit their major sustainability priorities and targets, such as net zero.
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