A recent KPMG report reveals that only 29% of companies feel prepared to have their Environmental, Social, and Governance (ESG) data independently assured, a minimal increase from previous surveys. This comes as regulatory deadlines for ESG reporting and assurance approach, particularly in the EU where large companies are expected to begin compliance in 2025.
KPMG’s annual ESG Assurance Maturity Index surveyed 1,000 senior executives across various sectors and regions. It categorises companies into Leaders, Advancers, and Beginners based on their preparedness for ESG data assurance. While there is some progress, with both Leaders and Advancers improving their scores, the gap between these groups and Beginners is widening, highlighting the urgent need for action.
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Larry Bradley, Global Head of Audit at KPMG, emphasised the evolving nature of ESG assurance readiness. “Getting ready for ESG assurance is a journey,” he noted, underscoring that companies often realise the increasing complexity of the task as they advance.
Geographical differences were notable, with France leading the scores, followed closely by Germany and Japan. Companies with higher revenues also demonstrated greater preparedness, with those earning over $100 billion achieving significantly higher maturity scores compared to those with lower revenues.
The survey highlighted the benefits of ESG readiness beyond compliance. Companies noted advantages such as greater market share, reduced costs, and new business models. However, the need for skilled personnel remains a significant challenge, with many companies planning to hire externally to meet their ESG goals.
Supply chain management is another critical area, with leading companies imposing stricter ESG requirements on their suppliers. This includes demanding ESG data integration and assurance, although such practices are still in the early stages.
