With mandatory sustainability reporting nearly upon us in the EU, new research from KPMG reveals the world’s biggest companies are taking a proactive approach, with a significant increase in businesses already publishing ESG data, including carbon reduction targets.
First launched in 1993, the KPMG Survey of Sustainability Reporting is produced every two years, providing analysis of the sustainability and ESG reports from 5,800 companies across 58 countries and jurisdictions, including Romania. The analysis includes data on ‘N100s’ – the world’s top 100 companies and the ‘G250’ – the world’s 250 largest companies by revenue based on the 2023 Fortune 500 rankings.
The data for Romania showed that out of the 100 companies analysed, 78 published sustainability information either in a standalone report, or as part of their management report. Compared to the previous survey conducted in 2022 there was a 4 percentage points increase in the number of reporting companies.
Of the 78 companies, 30 published a local report, an increase of 43 percent compared to the previous survey. Among the 30 companies that publish a local report, 8 are local entities, again an increase of 33 percent in local reporting companies since 2022.
In terms of reporting standards, GRI remains the preferred choice, with 93 percent of the local companies analysed using it, and 47 percent also using SASB standards. Among the companies analysed, one had published its first CSRD report.
In our previous analysis we also presented details of Romanian companies’ climate change concerns. We found then that 18 companies had set greenhouse gas emission targets. In the latest survey, the number has increased to 22, of which 10 are also reporting in line with TCFD recommendations. One of the most significant increases (267 per cent) was seen in relation to the inclusion of sustainability-related KPIs in the remuneration packages of top management.
There has been a significant increase in third party assurance, which will continue to rise for reports published from 2025 onwards. Compared to the previous survey, in which only 8 companies carried out some form of audit, this time 13 out of the 30 companies publishing a local report audited either the whole report or specific chapters and/or KPIs.
One other observation was that not all companies included their Taxonomy chapter in the Sustainability Report. Only 70 percent of local companies published their EU Taxonomy analysis, while 37 percent of companies declared that they had started preparing for CSRD implementation by conducting a Double Materiality Analysis.
Corina Constantin, Associate Partner Advisory – Energy, Sustainability and Climate change, KPMG in Romania, says: “The current landscape of sustainability reporting is evolving towards greater standardization, regulatory compliance, data quality, and stakeholder engagement. Sustainability reporting is increasingly becoming a cornerstone of corporate strategy, driven by rising stakeholder expectations, regulatory mandates, and the global urgency to address environmental and social issues. Key trends so far have included the adoption of standardized reporting frameworks like GRI, SASB, and TCFD. However, for Europe, the focus will have to shift as most local companies will have to start preparing for CSRD implementation.
The trends observed in the market underscore the growing recognition that sustainable business practices are not only essential to address global challenges but also to drive long-term economic success and resilience.”
The findings of KPMG’s Survey of Sustainability Reporting 2024 indicate six major trends:
- Reporting on sustainability and setting carbon targets has become part of business as usual. Both sustainability reporting and carbon targets have been adopted by almost all of the G250 global group of companies and four-fifths of the N100 groups.
- Some companies have already changed practices in advance of the move to mandatory reporting on sustainability under the EU’s Corporate Sustainability Reporting Directive (CSRD) standards. The directive applies to an initial group of companies for reports on financial years ending from 31 December 2024, with some having until 2029 to publish their first compliant reports. However, some companies, mainly European-headquartered or with activities in Europe, are already preparing for CSRD such as by reporting material topics in accordance with the European Sustainability Reporting Standards (ESRS). Nearly half of European companies in the research already make disclosures using the EU Taxonomy.
- Double materiality, required under CSRD, is now used by half of the largest companies. Nearly four-fifths of both the G250 and N100 groups use materiality assessments. The larger G250 companies are more likely to use double materiality processes that assess both impacts on society and the environment and how this affects their financial performance. Double materiality is the most complete form of materiality assessment and is a cornerstone of compliance with the EU’s CSRD, so some of those adopting it are likely to be doing so to prepare for it becoming mandatory.
- Despite moves towards mandatory reporting, voluntary guidelines and standards remain widely-used. GRI remains the most popular standard, with three-quarters of G250 companies using it and nearly as high a proportion of the N100 groups. There have been bigger increases in use for both SASB and stock exchange guidelines over the last two years, although from lower bases. Their adoption varies significantly by country and region, with all surveyed companies in Saudi Arabia using its stock exchange guidelines and two-thirds of those in the Americas using SASB.
- Reporting on biodiversity continues to increase. Around half of both the G250 and N100 groups now report on biodiversity, up from around one-quarter four years ago, although growth has been slower in the last two years.
- Adoption of TCFD recommendations continues to rise. Nearly three-quarters of G250 companies report climate risks in line with TCFD.
