ESG practitioners describe key reporting challenges and opportunities

AMES, Iowa–(BUSINESS WIRE)–Nearly two-thirds of senior decision makers believe their organization is underprepared to meet its environmental, social and governance (ESG) and to meet legal reporting requirements. Additionally, 72% have no confidence in the data currently reported to stakeholders, although 68% of companies have designated an ESG-specific role to oversee reporting.

These and other survey findings examined the current processes, collaboration and confidence of 1,300 organizations in their ESG reporting. Respondents from finance, ESG, sustainability, HR, compliance, operations and legislation involved in their company’s ESG reporting and strategy were surveyed.

“ESG reporting requirements are constantly evolving, and companies face increasing complexity and risk when consolidating disparate financial and non-financial data to provide stakeholders with a coherent report on their ESG performance,” said Julie Iskow, President & COO at Workiva. “The survey results show how ESG professionals across a range of industries across North America, Europe and APAC are addressing the challenges and opportunities surrounding ESG reporting.”

Evolution of ESG reporting

ESG reporting was found to be a relatively new endeavor for most companies, with 58% of respondents confirming that their organization had started formally reporting on ESG, climate/sustainability or Corporate Social Responsibility data has begun, while 14% said the organization has yet to publish a formal report.

According to the results, ESG reporting is handled by a variety of departments within organizations, signaling the need for extensive cross-team collaboration. More than a third of respondents said ESG reporting and strategy is led by the ESG/Chief Sustainability Officer (35%) and Operations & Facilities (35%), followed by Finance (30%) and Human Resources (28%) ). Other departments that respondents said played an important role in ESG reporting were Investor Relations, Marketing/Comms, Procurement and Legal/Compliance.

Formal engagement with ESG stakeholders is an ongoing and important process for their organizations, according to respondents, with nearly half (49%) of respondents confirming they review their materiality issues every 3-6 months and 29% stating that this happens annually. Almost two-thirds (63%) say formal stakeholder engagement has a significant impact on ESG materiality.

Concern about the “E” in ESG

While progress is needed on all facets of ESG, tackling the “E” is a key focus for organizations. Respondents predicted that over the next 12 to 18 months, 43% of their organization’s internal ESG budget would be spent on environmental factors, 29% on social factors, and 28% on areas of governance.

The increased proportion of budget dedicated to environmental factors reflects respondents’ concerns about the reporting challenges they face. Respondents, who hold a range of positions from C-Suite, VP, Director, and Manager to individual employees in these organizations, indicated that two of the biggest challenges when it comes to ESG reporting are calculating greenhouse gas logs to measure Scope 1, 2 and 3 emissions are achievement carbon disclosures for investors.

“Stakeholders are demanding more detailed and consistent data on ESG. With the recent SFDR (Sustainable Finance Disclosure Regulation) directive in Europe, the ESG disclosure rule proposed by the SEC in the US and the 27 key ESG metrics recommended by the Singapore Stock Exchange, the ESG reporting environment for companies is becoming increasingly complex,” said Mandi McReynolds, Head of Global ESG at Workiva. “In particular, we are seeing companies grappling with how to accurately meet these required disclosures around the ‘E’ in ESG to report greenhouse gas emissions with carbon accounting data.”

Technology is needed to drive ESG reporting

With the increasing importance of providing transparent, accurate data to key stakeholders, there is a clear need to simplify ESG reporting through technology. Globally, three in four respondents said technology is important for compiling and collaborating on ESG data, validating data for accuracy (80%) and aligning disclosures with regulations and framework standards (85%). Despite this, half of the respondents believe that individual departments within their organization do not have the necessary systems in place to provide data for ESG reporting. In fact, one in five said their organization is not using technology appropriate for managing the ESG reporting process and program initiatives. Thirty percent of these respondents said their legacy IT systems were incompatible with the new technology required, and 27% said they did not fully understand what technology was available or needed. Only a third of all respondents indicated that their organization makes very good use of technology and data to make decisions about how to evolve ESG strategy, indicating that there is significant scope for improving efficiency and performance in this area.

“To navigate this era of ESG disruption, companies need to plan ahead and be flexible. Regulators, investors, customers and other stakeholders have recognized what is important now, but that is only part of what will be essential for tomorrow’s reporting,” Iskow added. “Technology that enables seamless integration between teams on a central platform will be key to streamlining the reporting process over the long term and providing transparent reports that can meet these evolving needs to further build trust among employees, investors and broader stakeholders to strengthen.”

ESG reports deliver positive business value

The survey found that companies see business value in their current ESG reporting. Seven out of 10 respondents said their company’s ESG reporting has already had a positive impact on customer retention and acquisition (72%), cost savings (71%), insurance/credit bureau exposure (71%) and a reduction in longs – Term risk (71%). The majority of respondents also noted that ESG reporting has improved employee morale (71%), employee recruitment efforts (69%), and relationships with investors and stakeholders (70%).

“While there are still challenges in communicating ESG corporate value to stakeholders, the results show clear positive outcomes for companies that prioritize ESG reporting,” added Iskow. “Organizations must take actions that enable them to keep pace with current and future demands from regulators, investors and other stakeholders for trusted, transparent data and forward-looking ESG business objectives.”

About the poll

Workiva engaged Coleman Parkes, an independent research agency specializing in B2B technology, to conduct primary research on companies in the energy (including oil and gas), financial services, manufacturing, retail and wholesale, food and beverage, construction, technology, telecoms sectors and professionals from the service, real estate and transport industries via an online survey.

Respondents were interviewed between April 14th and May 6th, 2022 and lived in 13 global markets including the US, UK, Germany, France, Spain, Sweden, Netherlands, Denmark, Norway, Italy, Switzerland, Austria and Singapore (with an even split of 100 surveys in each market).

For more information, view an infographic showing key findings or download the full survey results here.

About Workiva

Workiva Inc. (NYSE:WK) is dedicated to driving transparent reporting for a better world. We design and deliver the world’s leading regulatory, financial and ESG reporting solutions to meet stakeholders’ demands for action, transparency and disclosure of financial and non-financial data. Our cloud-based platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency. Learn more at

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