Deloitte Survey Finds Companies Are Working Toward More Transparent ESG Plans

(Credit: Deloitte)

by | Mar 14, 2022

(Credit: Deloitte)

A Deloitte survey of 300 senior finance, legal and sustainability leaders found that companies are working toward more reliable data in ESG reporting, with investments in technology, controls design and implementation resources to meet the growing expectation for high quality ESG reporting information. 

The business landscape today has been transformed by environmental and social concerns. As understanding grows about the risk and value creation opportunities that ESG presents, the demand for ESG disclosure has accelerated. The companies that hold themselves accountable to their stakeholders by increasing transparency will be more viable — and valuable — in the long term.

While companies are setting ambitious climate and ESG goals, leaders remain cautious about their ability to deliver on rising disclosure requirements in a consistent and timely way. Companies are actively working toward enhancing governance over ESG disclosure, including oversight, controls and processes, to meet the growing need for transparency and high-quality ESG information.

While the market continues to demand transparency, 57% of survey respondents indicated that data availability and data quality remain their greatest challenges with respect to ESG data for disclosure. Despite increased focus on ESG matters from stakeholders and the need to internally mobilize to create a robust ESG strategy and governance structure, only 21% of survey respondents currently have an ESG council or working group in place to drive strategic attention to ESG topics; however, 57% of the Deloitte survey respondents are actively working to establish one. Eighty-two percent of senior executives also believe they will need additional resources to generate ESG disclosures that meet the information needs of critical stakeholders. Three in four executives plan to obtain assurance over ESG disclosures in the next reporting cycle, indicating the importance of applying independence and objectivity to enhance the reliability of this information.

Senior executives know the importance of ESG data management practices across the enterprise. The technology needed to enable complete and accurate ESG disclosures is a key item on the minds for nine in ten senior executives. It is important that there is consistency between key assumptions used in financial reporting and related disclosures and the assumptions used in any ESG commitments and disclosures, which will require close coordination with the finance, tax, internal audit, forecasting and budgeting teams. 

A recent interview with Aleksandra Dobkowski-Joy, Vice President of ESG for The Estée Lauder Companies, shows how understanding the problems surrounding ESG can be beneficial to companies. 

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