Three-quarters of firms globally are not ready for new ESG rules, KPMG finds
- Media Manager
- Sep 25, 2023
- 1 min read
Microsoft Start - Reuters
Published: September 26th, 2023
Three-quarters of companies globally are not ready to have their environmental, social and governance (ESG) data audited externally months before new regulations kick in, according to a new report from KPMG published on Tuesday.
Stricter European Union, U.S. and global rules are being introduced, mostly in time for the 2024 reporting season, to replace a patchwork of voluntary private sector practices for listed companies to make climate-related disclosures.
Regulators say external auditing of sustainability-related data - while not as extensive as financial auditing - is crucial for giving investors information free of misleading environmental claims, known as greenwashing.
The EU rules will require disclosures be audited while countries adopting the International Sustainability Standards Board's reporting requirements can also demand external checking.
Yet of 750 companies surveyed by KPMG, only 25% feel they are sufficiently prepared.
Just over half of companies surveyed currently get some level of external auditing of their ESG disclosures, but of those only 14% are obtaining reasonable assurance and 16% limited assurance for all of their ESG disclosures as new rules will require, according to KPMG's research.
