Sustainability regulations are fostering innovation in disclosures, making assured integrated reporting the gold standard.
A new Workiva 2024 ESG Practitioner Survey reveals that while respondents have confidence in their data, sustainability regulations pose significant challenges for their teams.
88% of respondents believe robust ESG reporting programs provide a competitive advantage. This indicates that sustainability regulations are fostering changes in corporate reporting.
CSRD:
81% of companies not regulated by the European Union’s Corporate Sustainability Reporting Directive (CSRD), plan to align their sustainability disclosures with its requirements.
The CSRD regulation, the first to mandate integrated financial and sustainability disclosures with third-party assurance, is expected to significantly impact businesses’ preparations for their first required reports in 2025.
“The CSRD has initiated a global shift toward assured integrating reporting, with business leaders recognizing the market demand for contextual, transparent, and credible data that aligns with stakeholder expectations. As companies around the world gear up for their first mandated CSRD reports in 2025, we are seeing CSRD’s impact extend far beyond those subject to the regulation,” said Paul Volpe, Senior Vice President, Growth Solutions, Workiva.
Practitioners Embracing Change Despite Challenges:
Most respondents in all disciplines prioritize compliance with reporting requirements and adhering to new mandates, but 88% believe robust ESG reporting programs provide a competitive advantage for companies.
84% believe integrated financial and sustainability data improves decision-making, and long-term value creation, and increases the likelihood of a company achieving its goals, with 88% of practitioners agreeing.
83% anticipate challenges in collecting accurate data for CSRD requirements, indicating increased complexity and maturation of reporting processes due to new regulatory requirements.
Paul Dickinson, a member of Workiva’s ESG Advisory Council and the Founder Chair of CDP, said, “It’s a testament to practitioners’ adaptability as we navigate a new era in corporate transparency. However, the survey also revealed that while the majority of respondents have confidence in their data, regulation poses significant hurdles for their teams.”
Reporting Processes Are Being transformed:
Practitioners are utilizing generative AI solutions to streamline reporting procedures, with 82% of respondents believing it will make their jobs easier and sustainability reporting more efficient in the next five years.
98% of practitioners plan to increase funding for technology-related sustainability initiatives within three years, while 92% are investing in technology to improve reporting team collaboration.
78% now have three or more internal teams involved in their company’s ESG reporting processes.
85% believe that integrating finance, sustainability, and compliance processes allows individuals to allocate more time to value-added work.
It must be noted that more than 2,000 professionals in corporate reporting, including those in risk, sustainability, internal audit, finance and accounting, and Europe and Asia, participated in the third annual 2024 ESG Practitioner Survey.
The way forward:
Volpe emphasized that assured integrated reporting goes beyond compliance; it is a crucial tool for demonstrating performance and value in a competitive market. Business leaders are committed to a transformational opportunity, investing in integrated, accessible, and innovative reporting across all business lines.