More than 70% of executives surveyed across multiple industries and regions reported that they lack confidence in their organizations’ own ESG reporting, and nearly two thirds feel unprepared to meet ESG goals and disclosure requirements, according to a new study released by business data and reporting solutions provider Workiva.

For the report, “ESG Reporting Global Insights 2022,” Workiva commissioned a survey of 1,300 senior decision makers at businesses with over 250 employees, across a broad range of sectors and 13 global markets. Each respondent to the survey participated in their organizations’ ESG reporting and strategy.

The study comes as companies around the world prepare to meet increasing demands by stakeholders including investors and customers for greater transparency into their sustainability-related risks and impact, and regulators work to implement mandatory ESG disclosure systems.

Mandi McReynolds, Head of Global ESG at Workiva, said:

“Stakeholders are calling for more detailed and uniform data related to ESG. With the recent Sustainable Finance Disclosure Regulation (SFDR) directive in Europe, the ESG disclosure rule proposed by the SEC in the U.S., and the Singapore Exchange’s recommended 27 core ESG metrics, the ESG reporting environment is becoming more complex for organizations.”

The survey indicated that respondents generally see significant benefits from ESG reporting, with most stating that they already see positive impact in areas including customer retention and recruitment (72%), improved investor and stakeholder relations (70%) and improved employee recruitment (69%).

While the benefits of ESG disclosure are well understood, however, many organizations are still in the early staged of ramping up sustainability reporting, and significant investments will be required in order to meet data collection and reporting needs. 58% of respondents reported that their organizations only began formal ESG reporting within the past 3 years, while another 14% have yet to release a formal report.

Technology investments will be needed in order to help improve the organizations’ ESG reporting capabilities, with 85% of respondents agreeing that technology is important for mapping disclosures to regulations and framework standards, but over half (55%) reporting that they currently lack sufficient tools to provide the right ESG data.

Improving reporting on environmental data appears to be top of mind for the decision makers, with the 2 most cited top challenges facing their organizations regarding ESG reporting including calculating greenhouse gas protocols to measure scope 1, 2 and 3 emissions, and achieving investor-grade carbon accounting level of data. Similarly, the respondents reported that the largest chunk of their ESG budget over the next 12 to 18 months will be dedicated to environmental factors (43%), followed by social (29%) and governance (28%) factors.

Julie Iskow, President & COO at Workiva, said:

“ESG reporting requirements are constantly evolving and businesses are faced with increasing complexity and risk when consolidating disparate financial and non-financial data to cohesively report on their ESG performance to stakeholders. The survey results indicate how ESG practitioners from a range of industries across North America, Europe, and APAC are tackling the challenges and opportunities around ESG reporting.”

Click here to access the Workiva study.