ACCOUNTING & SUSTAINABILITY
Sustainability Reporting Across the Globe
KPMG has been tracking sustainability reporting since 1993 when 12 percent of companies published sustainability reports. Today, KPMG’s sustainability reporting research suggests that, globally, 79 percent of large companies (and 96 percent of the 250 largest companies) publish a sustainability report.
One of the most important developments has been the International Sustainability Standards Board (ISSB) to help meet this demand from investors calling for “high quality, transparent, reliable and comparable reporting by companies on climate and other environmental, social and governance (ESG) matters.”
The types of reports, the frameworks used and the associated regulations that affect sustainability reporting differ by region. The European Union, for example, has adopted the Non-Financial Reporting Directive (NFRD) which requires large companies to “disclose information on the way they operate and manage social and environmental challenges.” In the United States, there is no such requirement although the Securities and Exchange Commission (SEC) has been considering how ESG-related information may provide more credible information to investors.
Understanding the global differences and trends in sustainability reporting is essential for today’s accounting professionals. The image below from KPMG’s Survey of Sustainability Reporting 2020 shows the growth in reporting but also the differences based on geography.
Key Global Trends in Sustainability Reporting
According to the KPMG study:
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- Global Reporting Initiative (GRI) is the most common sustainability reporting framework used by companies around the world with two-thirds of the largest companies around the world adhering to its format
- Growth in third-party assurance of sustainability information is seen worldwide with regional differences such as in China where only one-third of Chinese companies invest in assurance (likely due to the fact they are relatively new to sustainability reporting)
- Integrated reporting–where financial and non-financial/ESG data is together in a single report–is increasing with 22 percent of large companies issuing such a report. Uptake is uneven across the global with major increases in integrted reporting in France, Japan, Malaysia and India between 2017 – 2020.
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Sustainability Reporting in South Africa
Short video from GRI features work by the ROSE Foundation is a non-profit that encourages responsible management of used oils and related waste in South Africa. What do you notice about the benefits of sustainbility reporting to their mission?
Learn about more sustainability concepts within this major.
ADVANCE YOUR KNOWLEDGE OF REAL ESTATE AND SUSTAINABILITY
Learn what sustainable accounting is all about and its importance
Learn the important things to know in this field
Learn how sustainability fits into your courses
Learn how sustainability relates to your career