Marketing and Comms
ESG Practitioners Both Confident, Confused in Dynamic Reporting Landscape

The recently released third iteration of an annual ESG reporting survey showed that, while it remains a contentious topic in some circles, most companies are planning for a future of widespread and more transparent reporting.

Workiva’s 2024 ESG Practitioner Survey — which compiled the thoughts of more than 2,000 professionals working in ESG reporting at the manager level or above — found that at a very basic level, 81 percent of companies surveyed not subject to the EU’s Corporate Sustainability Reporting Directive (CSRD) were planning to comply with it anyway. What’s more, 92 percent of companies are investing more in reporting to meet these and other upcoming guidelines, including those in the US.

“It’s telling how global regulations are becoming the norm,” Mandi McReynolds, Workiva’s chief sustainability officer and VP of global ESG, told Sustainable Brands® (SB).

The survey was done in March, so it doesn’t necessarily take into account the recent SEC’s rollout of its climate-disclosure rules and the almost-immediate, associated legal challenges. Neither McReynolds nor Ascend2 CEO Todd Lebo, whose company carried out the research, says that that development would have necessarily affected the results because the surveyed companies were already doing some level of reporting.

Where the challenges begin to arise is in the actual reporting process and the confidence these professionals have in getting the data right. While 98 percent of respondents think their ESG data is accurate, 83 percent say collecting accurate data to meet the CSRD requirements is going to be a challenge for their organization.

Image credit: Workiva

Near the top of the list of those challenges are complying with these ever-changing mandates and aligning with stakeholder needs. There are also issues with the sheer volume of requirements: Some organizations are set up to manage it all; others are not.

In this edition of the survey, Lebo told SB they made sure they involved people inside and outside ESG/sustainability functions but had a qualifying question to ensure respondents were involved in reporting in some capacity.

“It gave us a more holistic view,” he said.

This range of the corporate ladder highlighted differences in reporting perception between executives and non-executives. 62 percent of executives thought that their company applied “the same diligence” to ESG reporting as they did financial reporting; however, that number dropped to 32 percent for manager-level employees. The numbers were generally similar when discussing perception of a company’s materiality-assessment and report-drafting processes. Between executives and those lower in organizations, the perception gap is clear.

Overall, the report showed that companies are moving ahead in reporting — whether to meet CSRD or generally to meet consumer expectations. However, the constant change in reporting requirements is causing corporate grief as they try to evolve to meet the standards of the moment and the “stakeholder demands for transparency moving forward,” McReynolds said.

With Workiva being an ESG-reporting platform, it’s important to take the company’s inherent lean towards a pro-reporting approach into account while reviewing the report; but what’s clear is that across this survey group, more investment in efficient reporting is on the horizon. 89 percent of companies are planning to allocate more budget for “ESG initiatives” over the next three years, with technology and data being a big part of that.

Increased investment will be required to meet upcoming requirements for everything from materiality to emissions disclosures, regardless of a company’s private or public standing.

As McReynolds asserted: “Better reporting will drive better business performance, and increase the chances of meeting long-term ESG goals.”